What is a VA Streamlined Refinance (IRRRL)?
Benefits for an IRRRL
- Generally, no appraisal, credit documentation or underwriting is required on an IRRRL (minimal documentation required)
- Lower VA Funding Fee (0.500% of loan amount) compared to regular VA refinance loan (no funding fee when veteran has a service connected disability)
- Loans typically close much faster based on limited documentation required
Requirements for an IRRRL
- An IRRRL must bear a lower interest rate than the loan it is refinancing (unless the loan it is refinancing is an ARM),
- The principal and interest payment on an IRRRL must be less than the principal and interest payment on the loan being refinanced unless one of the following exceptions applies:
- the IRRRL is refinancing an ARM, or
- term of the IRRRL is shorter than the term of the loan being refinanced.
- The maximum loan term is the original term of the VA loan being refinanced plus 10 years (but not to exceed 30 years and 32 days). For example, if the old loan was made with a 15-year term, the term of the new loan cannot exceed 25 years.
- The subject property must be the veteran’s (whose entitlement was used on the loan being refinanced) primary residence, and
- The loan being refinanced must be seasoned for at least 6 months prior the funding date of the new loan.
No credit information or underwriting is required unless:
- The monthly payment (PITI) will increase 20 percent or more.
If the monthly payment (principal and interest) increases by 20 percent or more, the applicant(s) must be credit qualified for the new proposed monthly payment.
|Property Type||Max Loan Amount1||Max LTV||Max CLTV||Min FICO|
VA Streamline Refinance Transactions
|Veteran/Military Status||Percentage for
First Time Use
|Disabled Veteran (Service Connected Disability)||0.00%||0.00%|
(1) Maximum loan amount is lower of amount listed or max county loan limit. Includes VA funding fee if financed.