Purchase Transactions:

The United States Department of Veterans Affairs does allow a limited amount of cash back for a VA purchase loan. The amount of money received may not be more than the capital contribution that the borrower has invested in the transaction. For example, a borrower may receive a refund for their earnest money deposit, appraisal fee and home inspection fee (as long as they have paid for these and the seller has agreed to refund their payment).  Repairs made by the seller, credits for repairs and closing cost credits are not considered cash back.

In the event that a property is in need of extraordinary repair, a type of rehabilitation / construction loan is now available. The government insured FHA 203k loan will allow a home buyer to borrow up to 97.5% of a properties future (after rehab) market value. The funds must remain in an escrow account and will be paid out as the work is completed. Call 888-573-4496 for more information.

Refinance Transactions:

If the transaction is a refinance, cash out is allowed. The maximum an eligible borrower may take out is 90% of the appraised value. The exclusion is if the transaction is a VA to VA loan where the purpose of the refinance is for a lower interest rate and lower payment.