Refinancing a Conventional Loan Into a VA Loan

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If you currently have a conventional mortgage and qualify for a VA loan, you may be able to refinance to take advantage of the advantages a VA-backed loan can provide. A VA cash-out refinance allows eligible homeowners to replace their existing loan with a VA-backed one, even if their current loan isn’t VA.

Are you eligible for a VA refinance? Start here to find out (Dec 4th, 2025)

Can You Refinance a Conventional Loan into VA?

Yes, if you currently have a conventional mortgage and qualify for a VA loan, you can refinance into a VA loan using the VA cash-out refinance. Despite its name, you don’t need to take cash out to use this option. It simply allows you to replace your conventional mortgage with a VA-backed loan, giving you access to benefits like no private mortgage insurance (PMI) and potentially lower interest rates.

The VA does also offer the VA Streamline (IRRRL), but this option is only available to borrowers who already have VA-backed mortgages. 

Advantages of Refinancing into a VA Loan

• Avoid PMI: VA loans do not require private mortgage insurance, regardless of how much equity you currently have.
• Lower interest rates: VA loans are government-backed, and often offer more competitive rates than conventional loans.
• Higher LTV limits: You can refinance up to 100% of your home’s value, compared to 80% for most conventional refinances.

Drawbacks to VA Refinances

• VA Funding fee: Most borrowers pay a funding fee of 1.25% to 3.3% of the loan amount. This fee funds the VA loan program. 
• VA appraisal required: A VA appraisal is necessary to secure a VA loan, and can sometimes limit borrowing power.
• Closing costs: Like other refinances, the VA cash-out comes with upfront closing costs.

Requirements for a Conventional-to-VA Refinance

Lenders and the VA require certain conditions before approving a refinance:

• Seasoning period: Most lenders require at least six to seven months of consistent, on-time payments on your current mortgage.
• VA eligibility: You’ll need to meet the VA’s service requirements and obtain a Certificate of Eligibility (COE).
• Primary residence: The property must be your primary home, not a vacation or investment property.
• Loan-to-value (LTV) ratio: While the VA allows refinancing up to 100% of your home’s value, many lenders cap this at 90%.
• Appraisal: A VA appraisal will be required to confirm the home’s value and condition.

Steps to Refinance from a Conventional Loan to a VA Loan

1. Check your finances: Review your credit score, debt-to-income ratio, and overall readiness.
2. Choose a VA lender: Shop for lenders experienced in VA loans, comparing rates and fees.
3. Apply for a VA cash-out refinance: Submit your loan application and required documents, including your COE.
4. Order an appraisal: A VA-approved appraiser will appraise your home’s value and condition.
5. Go through underwriting: Your lender reviews your finances and property details before approving the loan.
6. Close the loan: Pay any upfront costs, sign closing documents, and officially switch from a conventional to a VA loan.

Most refinances take 30 to 45 days from start to finish, depending on appraisal and lender timelines.

Is Refinancing Worth It?

Refinancing to a VA loan could reduce your monthly payments, eliminate PMI, and potentially save you thousands in interest over time. To see if refinancing makes sense for your situation, contact your lender to discuss your options and learn how you could benefit.