VA Interest Rate Reduction Refinance Loans

A VA Interest Reduction Refinance Loan (also know as a VA IRRRL) is a streamline refinance which that requires little documentation, no appraisal, and a reduction in the interest rate on the VA home loan. 

VA interest rate reduction refinances do not require credit underwriting and the mortgage loan must be current. 

The following are basic requirements of a VA interest rate reduction refinance:

• The mortgage to be refinanced must already be a VA home loan

• The borrower must have been making the mortgage payments on time

• The refinance must lower the interest rate as compared to the previous VA home loan

• The borrower may not receive cash from loan proceeds

• Any subordinate financing may remain in place as long as it is subordinated on title.

• The borrower must have owned the property and had the VA mortgage for at least six months to be eligible (does not need to be owner occupied).

• The term of the new mortgage cannot be any greater than the term of the existing VA home loan plus 10 years and not to exceed 30 years plus 32 days.

• An appraisal is not required unless the closing costs are wrapped into the loan.  IRRRL refinances are limited to the balance owing on the current VA home loan, closing costs and funding fee (0.5%).

• No termite report is required

• The borrower cannot be late, delinquent, or in default of any federal debt.

• The borrower cannot receive any cash back from the transaction.

• If the veteran whose entitlement was used to obtain the existing VA loan has died, regardless of the cause of death, and the veteran's surviving spouse was a co-obligor, the  surviving spouse is considered a veteran for the purpose of refinancing under this program.  The surviving spouse must own the property to be refinanced.

• All parties on the original loan must be on the new VA home loan.