VA Interest Rate Reduction Refinance Loans (IRRRL)
VA IRRRL helps veterans and service members lower their mortgage rate and save on monthly payments.
What is a VA IRRRL?
A VA Interest Rate Reduction Refinance Loan (IRRRL), also known as the VA Streamline Refinance, allows homeowners who already have a VA loan to refinance in order to take advantage of lower interest rates, which can reduce monthly loan payments.
How does a VA IRRRL help?
- No Appraisal or Credit Underwriting: Generally, no appraisal, credit information, or underwriting is required on an IRRRL, simplifying and speeding up the refinance process. However, there are exceptions where credit underwriting may be required, such as when the loan is 30 days or more past due at closing or when the monthly payment increases by 20 percent or more.
- Closing Costs Can Be Included: Closing costs may be financed in the loan, meaning you don't need to pay them upfront.
- Adjustable to Fixed Rate: If you currently have a VA adjustable-rate mortgage (ARM), you can refinance into a fixed-rate VA loan for greater stability. A fixed-rate loan to refinance a VA ARM may be at a higher interest rate.
- Shorten the Loan Term: A 30-year mortgage can be reduced to a 15-year term, enabling quicker payoff and potentially saving on interest.
What are the eligibility requirements?
- Second Loans: If you have a second mortgage, it must be subordinated, meaning the VA loan becomes your primary mortgage.
- Certificate of Eligibility (COE): A COE is not required for IRRRLs because the Veteran has previously been approved for a VA Loan. However, the VA funding fee exemption status will be provided on the IRRRL Appraisal Case Initiated screen of the loan record in WebLGY.
- Existing VA Loan: The loan must be refinancing an existing VA loan, and the refinance cannot be used to pay off non-VA loans.