February 18th, 2019 1:44 PM by Bilal Green
All Cash-Out Refinance Transactions
Topic
Summary of VA Change
Loan-to-Value (LTV) Restriction
VA will no longer guaranty cash-out refinancing loans when the LTV exceeds 100 percent.
Net Tangible Benefit Test and Disclosure
Seven-Point Comparison Disclosure
Loan Seasoning
Construction-to- Permanent Refinancing
Refinancing of construction loans (construction-to-permanent) are considered Cash-Out Refinance transactions, irrespective of whether there is any change to the principal loan amount.
Type I Cash-Out Refinance Transactions – Additional Requirements
Definition
Loan amount (including VAFF) does not exceed the payoff amount of the loan being refinanced.
Fee Recoupment (Refinance of an Existing VA-Guaranteed Loan)
Interest Rate Basis Requirements (Refinance of a Fixed-Rate, VA-Guaranteed Loan)
Type II Cash-Out Refinance Transactions
Loan amount (including VAFF) exceeds the payoff amount of the loan being refinanced.
VA IRRRL
Requirements and definition are unchanged: A refinancing loan made to refinance an existing VA-guaranteed home loan at a lower interest rate. See Circular 26-18-13.
All other refinancing, and all construction-to-permanent refinancing, fall into the category of Type I or Type II Cash-Out Refinance.