VA's two cash-out refinance types and the protections each one carries
Which protections apply
Classification
VA applies the statutory protections differently by type. Seasoning applies to Type I loans that refinance a VA loan and to all Type II loans. The fee recoupment test applies only to Type I loans that refinance a VA loan. Net tangible benefit standards and loan comparison disclosures apply across cash-out refinances, with the home equity statement added for Type II.
Last reviewed against the primary sources listed below.
At a glance
| Protection | Type I, VA to VA | Type I, non-VA to VA | Type II |
|---|---|---|---|
| Seasoning | Yes | No | Yes |
| Fee recoupment | Yes | No | No |
| Net tangible benefit | Yes | Yes | Yes |
| Home equity statement | No | No | Yes |
Type questions
Does the recoupment rule apply to Type II cash-out?
No. VA applies recoupment only to Type I loans refinancing a VA loan.