Can you get a HELOC if you have an FHA or VA loan?

Yes. The type of first mortgage rarely matters to a HELOC lender. Your equity and credit do.

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When a government cash-out refinance fits

• VA cash-out can reach up to 100% of value for eligible veterans.
• FHA cash-out goes to 80% with more flexible credit.

Example: keeping a low VA rate

A veteran owes $380,000 at 2.75% on a VA loan and needs $70,000 for an addition. A VA cash-out refinance would replace the whole balance at today's rate and add a funding fee of 2.15% or 3.3% on the new loan amount. A HELOC for $70,000 at 7.75% APR leaves the 2.75% loan in place and costs no funding fee. On $380,000, keeping a rate 3+ points lower is worth well over $10,000 a year in interest.

Assumability stays intact

FHA and VA loans can be assumed by a qualified buyer. A HELOC doesn't change that, but it must be paid off when you sell, so the buyer would need cash or other financing to cover the difference between the price and the assumed balance.

FHA mortgage insurance

Adding a HELOC doesn't change your FHA premium. If you want to remove FHA mortgage insurance, the usual route is a conventional refinance once you have about 20% equity, which you'd weigh against keeping a low FHA rate.

How lenders count the first loan

For a VA loan with a funding fee financed into it, or an FHA loan with the upfront premium financed, the HELOC lender uses your current balance, including those amounts, in its combined loan-to-value calculation.

Questions people ask

Will the HELOC affect my FHA mortgage insurance?

No. FHA's mortgage insurance is tied to the first mortgage. Adding a HELOC doesn't change it.

Does the HELOC lender care about my VA funding fee or entitlement?

No. Those apply to the VA loan only. The HELOC lender looks at your equity, credit and income.

Could I refinance the FHA loan and keep the HELOC?

Yes. You can refinance an FHA first mortgage and keep your HELOC if the HELOC lender agrees to subordinate, so its line stays in second position behind the new loan. How subordination works.

Before you apply

• Your current balance, including any financed funding fee or premium.
• Your current rate and remaining term.
• A realistic home value estimate.
• A quote for a cash-out refinance to compare.

Mistakes to avoid

• Refinancing a low-rate VA or FHA loan just to get cash, when a HELOC would leave the rate intact.
• Forgetting that a HELOC must be paid off when you sell, even if the buyer assumes your VA or FHA loan.
• Assuming an FHA streamline refinance can include cash out; it can't.

Also asked

Can I get a HELOC on a home bought with a USDA loan?

Yes. A HELOC can sit behind a USDA first mortgage, subject to the HELOC lender's rules.

Does the VA have to approve my HELOC?

No. VA guarantees the first mortgage; a separate HELOC lender makes its own decision.

Will a HELOC make my VA loan harder to assume?

A buyer can still assume your VA loan, but the HELOC must be paid off when you sell, so the buyer needs cash or other financing to cover the difference between the price and the assumed balance.

Can I get a HELOC right after buying with FHA or VA?

Often not right away. Some HELOC lenders require a few months to a year of ownership, and FHA or VA purchases with small down payments often have little equity early on. With 3.5% down, you'd typically need price growth or principal paydown before an 80%–85% cap leaves room.

More in HELOC guides

• HELOC with bad credit
• HELOC on a paid-off house
• HELOC if you're self-employed
• HELOC on an investment property
• HELOC on a second home
• HELOC after bankruptcy
• Using a HELOC in a divorce
• HELOC for retirees

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