HELOC for Veterans: What You Need to Know

If you've been searching for a "VA HELOC," we need to clear something up first: the VA doesn't offer HELOCs.

This confuses a lot of veterans. The VA offers purchase loans, refinances, and cash-out refinances—but not home equity lines of credit.

The good news? You can still get a HELOC. You'll just get it from a regular lender, not through a VA program.

Does the VA Offer HELOCs?

No. The Department of Veterans Affairs backs these home loans:

• VA Purchase Loans - Buy a home with $0 down
• VA IRRRL - Interest Rate Reduction Refinance Loan
• VA Cash-Out Refinance - Pull equity as lump sum

That's the complete list. No HELOC program exists.

Why not? HELOCs are second liens (your mortgage is first). The VA focuses on helping veterans buy and refinance primary mortgages, not secondary credit lines.

How Veterans Can Still Get a HELOC

Here's the reality: when you apply for a HELOC, your veteran status is mostly irrelevant. Lenders care about:

• Credit score (typically 620-680 minimum)
• Home equity (usually 15-20% minimum after HELOC)
• Debt-to-income ratio (under 43% typically)
• Income stability

Your DD-214 won't help your application. But it might help your rate.

Lenders with Veteran Benefits

Some lenders offer military/veteran perks:

Navy Federal Credit Union

• Must be military member or family
• Often lowest rates available
• Excellent service reputation
• No annual fees

USAA

• Military and family only
• Competitive rates
• Full-service banking relationship

PenFed Credit Union

• Open to military (and others)
• Low rates on HELOCs
• $0 closing costs on some products

Local Credit Unions

• Many offer veteran discounts
• Ask about rate drops or fee waivers

Regular Lenders

• Won't care about veteran status
• Shop anyway—rate matters more than veteran perks

HELOC After a VA Loan

Can you get a HELOC if you used a VA loan to buy your house?

Yes. Absolutely.

Your HELOC would be a second lien behind your VA loan. The HELOC lender doesn't care that your first mortgage is VA-backed. They care about:

1. Your total loan-to-value (first mortgage + HELOC)
2. Your credit and income
3. Your home's current value

Example:

• Home value: $400,000
• VA loan balance: $280,000
• Available equity at 80% CLTV: $40,000

You'd qualify for up to $40,000 HELOC while keeping your VA loan in place.

HELOC vs VA Cash-Out Refinance

Both let you access equity. Here's when each makes sense:

Choose HELOC When:

• You want to keep your existing mortgage rate
• You need flexibility (draw and repay as needed)
• You're accessing smaller amounts ($25K-$100K)
• You're not sure how much you'll need

Choose VA Cash-Out When:

• You need a large lump sum
• Current mortgage rates are similar to your rate
• You want everything in one fixed payment
• You can afford the VA funding fee

Important: If you have a low-rate VA mortgage (under 4%), a HELOC usually makes more sense. A cash-out refi would replace your entire mortgage at a higher rate.

What About VA Loan Entitlement?

Getting a HELOC doesn't affect your VA loan entitlement at all. The HELOC is a completely separate product from a separate lender.

Your VA entitlement only matters for:

• VA purchase loans
• VA refinances (IRRRL and cash-out)

So if you're worried about "using up" your VA benefits—don't be. HELOCs don't touch them.

Best HELOC Strategy for Veterans

1. Check Navy Federal or USAA first - If you qualify, their rates are often unbeatable

2. Compare with 2-3 other lenders - Credit unions, Figure, Achieve—see who offers the best deal

3. Ask about veteran discounts - Many lenders offer 0.125-0.25% rate drops or fee waivers for veterans

4. Keep your VA loan intact - Unless rates have dropped significantly, don't replace it with a cash-out refi

5. Use the 14-day shopping window - Multiple credit checks for the same loan type within 14 days count as one inquiry

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FAQ

Does the VA guarantee HELOCs?

No. The VA only backs purchase loans and refinances. HELOCs come from regular lenders without VA involvement.

Can I get a HELOC with a VA loan on my house?

Yes. The HELOC becomes a second lien behind your VA loan. Most lenders allow this as long as your combined loan-to-value stays under 80-85%.

Is a VA cash-out refinance better than a HELOC?

Depends on your situation. Cash-out is better for large lump sums and locking in a fixed rate. HELOC is better for flexibility and keeping your current mortgage rate.

Do I need to show my DD-214 to get a HELOC?

No. HELOC applications don't require proof of military service. You only need the standard documentation (income, assets, property info).

Which lender is best for veteran HELOCs?

Navy Federal consistently offers the lowest rates for eligible members. If you don't qualify, compare PenFed, USAA, and online lenders like Figure or Achieve.

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Ready to Access Your Equity?

Whether you choose a HELOC or cash-out refi, the first step is knowing your options. HonestCasa shows you real offers from multiple lenders in minutes—no VA red tape required.

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