VA HELOC and VA home equity loans: what exists and what veterans can use instead
There is no VA HELOC or VA home equity loan. The Department of Veterans Affairs doesn’t offer or guarantee home equity lines of credit or home equity loans: VA.gov lists four home loan types, and none of them is a HELOC. What a veteran can use is a regular HELOC or home equity loan from a private lender on a home that has a VA mortgage, or a VA cash-out refinance, which is VA-backed but replaces your whole mortgage.
Below: each real option and what it requires, why the VA streamline refinance (IRRRL) is not a way to get cash, and an example of how much a veteran with a recent no-down-payment VA loan could borrow each way. Rates and limits vary by lender, so it helps to compare offers on both routes: HELOC and VA cash-out.
Is there a VA HELOC?
No. VA.gov lists the VA home loan types as the purchase loan, the Native American Direct Loan, the interest rate reduction refinance loan (IRRRL) and the cash-out refinance loan. A HELOC or home equity loan is not among them. Searches for a “VA HELOC,” “VA home equity loan” or “VA equity loan” all land on the same answer: if you want a line of credit or a second loan, it comes from a private lender, with no VA backing.
That has two practical effects. There is no VA funding fee on a HELOC or home equity loan, and VA’s rules on fees and loan limits don’t apply to it either. The lender’s own rules decide how much you can borrow and at what rate.
Your options for using home equity as a veteran
1. A HELOC or home equity loan on a home with a VA loan
A private lender can open a HELOC or home equity loan behind your VA mortgage, in second position. Your VA loan and its rate stay as they are. A HELOC is a line you draw on as needed, usually at a variable rate; a home equity loan pays one lump sum, generally at a fixed rate. The lender looks at your equity, credit and income. Our guides to how a HELOC works and what a home equity loan is cover both.
2. A VA cash-out refinance
This is the VA-backed way to borrow against your equity. It replaces your current mortgage, VA or not, with a new, larger VA loan, and you receive the difference. The VA Lenders Handbook (M26-7) and 38 CFR 36.4306 allow the new loan to reach 100% of the home’s reasonable value, with the funding fee included. It can also pay off other liens, such as a second mortgage. The funding fee is 2.15% on first use and 3.3% after, unless you are exempt. The rules, from seasoning to the net tangible benefit test, are in our guide to VA cash-out refinance requirements.
3. The VA IRRRL: a lower rate, but no cash
The interest rate reduction refinance loan, often called a VA streamline, only refinances an existing VA loan. The VA Lenders Handbook says an IRRRL cannot be used to take equity out of the property or pay off debts other than the VA loan being refinanced, and that the borrower generally cannot receive cash from it. Under 38 CFR 36.4307, the new loan is limited to the old loan’s balance plus allowed closing costs and up to 2% in discount points. If cash is the goal, an IRRRL is the wrong tool.
4. A paid-off home: HELOC or home equity loan only
The VA Lenders Handbook says refinancing loans on properties without an existing mortgage or lien of record are not eligible for VA guaranty. So if your home is paid off, a VA cash-out is not available, and a HELOC or home equity loan is the route. See how to borrow against a paid-off house.
How a HELOC fits with your VA loan, now and later
- Equity comes first. HELOC lenders limit all loans on the home to a share of its value, and each lender sets its own limit. A VA loan made with no down payment, with the funding fee added in, can leave little room at first. Our guide on how much equity you can borrow has the formula.
- A later IRRRL needs the HELOC lender’s agreement. The handbook says the IRRRL must replace the existing VA loan as the first lien, and any second lienholder would have to agree to subordinate.
- A later VA cash-out can absorb the HELOC. The new VA loan must be in first position, so other lienholders must subordinate, or the cash-out pays the HELOC off as part of the new loan.
Example: a veteran with a recent VA loan and no down payment
Say you bought a $320,000 home in spring 2023 with no down payment, financing the 2.15% first-use funding fee, so your VA loan was $326,880 at an example 6.50% rate. After 42 payments you owe about $312,986. Your home is now worth $360,000 (an assumption). Here is roughly how much each route could provide:
| Route | All loans can total | Room to borrow |
|---|---|---|
| HELOC at an 80% limit | $288,000 | None |
| HELOC at an 85% limit | $306,000 | None |
| HELOC at a 90% limit | $324,000 | About $11,000 |
| VA cash-out, 3.3% funding fee | $360,000 incl. $11,500 fee | About $35,500 before closing costs |
| VA cash-out, exempt from the fee | $360,000 | About $47,000 before closing costs |
VA ceiling of 100% of reasonable value, with the funding fee inside it (M26-7 Ch. 6). The 3.3% fee applies because the purchase used the benefit. Lenders may lend less. Calculated by LenderMatch. Illustrations, not quotes.
In this case, a recent no-down-payment buyer has little or no HELOC room at common limits, while a VA cash-out can reach further. The trade-off is that a cash-out puts your whole balance at today’s rate. If you bought years ago and owe, say, half of what the home is worth, the picture flips: an 80% limit leaves room for up to 30% of the home’s value, and you keep your VA rate. Our guide to VA cash-out refinance vs HELOC compares the monthly payments side by side, and the VA cash-out calculator and home equity calculator run your own numbers.
VA home equity loan rates
Because VA doesn’t back them, there is no VA rate for a HELOC or home equity loan. You get the lender’s rate, like any homeowner. For a benchmark, Bankrate’s national averages on October 21, 2026 were 7.36% for a HELOC and 8.67% to 8.77% for 5- to 15-year home equity loans; the prime rate that most HELOCs follow was 7.00% (Federal Reserve H.15, as of October 21, 2026). Our second mortgage rates guide explains what moves them.
Frequently asked questions
Does the VA offer home equity loans or HELOCs?
No. VA.gov lists four home loan types: the purchase loan, the Native American Direct Loan, the interest rate reduction refinance loan (IRRRL) and the cash-out refinance. None is a HELOC or a home equity loan. The VA-backed way to borrow against your equity is the cash-out refinance.
Can I get a HELOC if I have a VA loan?
Yes. A bank, credit union or other private lender can open a HELOC or home equity loan behind your VA mortgage. Your VA loan and its rate stay in place, and the HELOC lender sets its own equity, credit and income rules.
Can a VA IRRRL give me cash out?
No. The VA Lenders Handbook says an IRRRL cannot be used to take equity out of the property or pay off debts other than the VA loan being refinanced, and as a general rule the borrower cannot receive cash from it.
If I have a HELOC, can I still refinance my VA loan later?
Yes. For an IRRRL, the HELOC lender has to agree to subordinate, meaning stay in second place behind the new VA loan. A VA cash-out refinance can pay off the HELOC, or the HELOC lender must subordinate to the new VA loan.
Is there a VA home equity program for disabled veterans?
VA has no home equity loan or HELOC program. Disability compensation does lower the cost of the VA cash-out refinance: veterans receiving compensation for a service-connected disability are exempt from the VA funding fee.
Compare VA cash-out offers on your home →
Sources
- VA.gov, “VA home loan types” (last updated March 19, 2025); “Cash-out refinance loan” and “Interest rate reduction refinance loan” (both last updated January 7, 2026); “VA funding fee and loan closing costs” (rates effective April 7, 2023; page last updated October 5, 2026).
- VA Lenders Handbook (M26-7), Chapter 6: Topic 1, IRRRLs (change date April 10, 2009) and Topic 3, Cash-Out Refinancing Loans (change date October 30, 2024).
- 38 CFR 36.4306 (refinancing loans) and 36.4307 (interest rate reduction refinancing loans), accessed October 27, 2026.
- Bankrate, HELOC and home equity loan rate surveys (averages as of October 21, 2026); Federal Reserve, H.15 Selected Interest Rates, prime rate 7.00% (as of October 21, 2026).
- Worked example calculated by LenderMatch: 360-month amortization at 6.50%, 42 payments.
Last reviewed October 27, 2026.