Does VA have a title seasoning requirement on a cash out refi?

I did a short sale 2 years ago. At the time I was able to get into another property via my Mother.The mortgage is in her name only. I went onto title in August of 2013. I would like to get the loan in my name only and pull a little cash out to do some improvements. My LTV is about 65% all other compensating factors are solid as well. My question is will VA allow me to do a cash out refi being on title for only 8 months?
  • April 30 2014 - Las Vegas
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Answers (8)

George's response is accurate based on VA guidelines, however, lender overlays could stand as a problem depending the lender you choose to work with.  
  • May 08 2014
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My understanding is that VA does not allow cash out, yet other lenders are saying it can be done?  Please clarify.
  • May 07 2014
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Hello John,

I have read the answers below and want to give you my 2 cents. First, I am a Veteran and have been doing VA loans for over 25 years. Second, to clear up the incorrect answers below here is VA Guidelines (not Lender overlays).

1.) VA- The VA doesNOT have a restriction or minimum waiting period after a short sale and that mean whether the Veteran was late on their mortgage or not. PERIOD! There is a caveat. Since most likely when we run the loan application through the AUS (Automated Underwriting System) we will get a Refer/Eligible. Meaning the computer can't approve it, and they Refer the final decision back to the Underwriter on a Manual Underwrite and here's is the caveat. We will be required to have a 12 month VOR (verification of rent) in order to approve the loan. Other than that the Veteran should be good to go.

2.) The VA does not have a "Continuity of Obligation Clause". Meaning you doNOT have to be on Title a minimum amount of time (like was answered below) in order to refinance. And goes for cash out of not! The VA loan is a beautiful thing. It has many shining advantages which are afforded to you Heroes.  I hope this has been informative to both you and the LOs below.


Let me know if you have any additional questions by clicking on my profile and shooting me an email with your phone and email address.


Best of Luck!
  • May 01 2014
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You are welcome and good luck with the refinance.
  • April 30 2014
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Thank you Tyson,

I have only been on title with my mother for 8 months but I can prove that I have made the payments since the beginning of the mortgage (25 months) via my bank statements. So it looks like I should be ok.

Thanks again!
  • April 30 2014
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John,

Thank you for serving our country!

I want to let you know the CORRECT ANSWER. It is true VA does not have seasoning requirements, however, if you were to treat this as a refinance you would have to meet 1 of the 2 requirements:

1. You will need to be on title a minimum of 12 months or
2. You have to show proof the mortgage payment was made by you directly to the mortgage company. To prove this you would need to show 12 months of cancelled checks or 12 bank statements showing being withdrawn from your personal account.

The ONLY way to pull money out is to treat the property as a purchase from your mother, which can be fairly easy and completed by having an escrow company prepare escrow instructions. You do not need a purchase contract or involve realtors as they would just try to get a commission for basically doing nothing.

In addition, VA has a guideline that requires you can't purchase a home until 2 years from Short Sale or foreclosure. You meet this guideline so you should not have a problem getting this done.

We have special benefits for our Veteran families and we finance down to a 550 credit score. Most lenders are capped at 580 due to there overlays as VA guidelines don't have a credit score requirement. Please reach out to me through Zillow or post on here so others can learn from your experience.
  • April 30 2014
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Thank you Andrew, I have re established credit and my fico is up to 682. I was hoovering around 800 prior to the short sale and it dipped to 590 after.
  • April 30 2014
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Hey John,

Good news! There is no seasoning requirement for cash out VA and your LTV will be based on a current appraisal.  What is your current credit score?   I just wonder what the impact of the short sale has been.  Have you restablished credit? 

  • April 30 2014
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