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B. The Structure of Section 3709(b) and (d) and How It Affects Type I and Type II Cash-Outs Subsection (b) requires that a refinance loan provide a net tangible benefit to a veteran As explained, section 3709 bifurcates cash-out refinance loans into two types. Type I Cash-Outs are subject to 38 U.S.C. 3709(a) through (c).
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I. VA’s Refinance Program and New Section 3709 A. Two Types of Cash-Out Refinance Loans Under Section 3709 Refinancing loans guaranteed or insured by VA have historically fallen into two broad categories: (i) Cash-out refinance loans (cash-outs) offered under 38 U.S.C. 3710(a)(5) and (a)(9) and (ii) interest rate reduction refinancing loans (IRRRLs) authorized under 38
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