Many Veterans are interested in the VA IRRRL streamline program when interest rates are low and now that the Internet is a wealth of information, they are looking for the guidelines for the IRRRL program to see if they qualify. VA IRRRL Streamline Refinances allow a veteran to refinance their existing VA loan to a new VA loan to a lower interest rate with a reduced amount of documentation.
VA IRRRL Guidelines (At ONE Lender)
With the VA IRRRL program, it is possible that Wells Fargo IRRRL guidelines may be different than Bank of America VA IRRRL guidelines. Be sure to ask your loan officer! That said, here are one lender’s VA IRRRL guidelines:
VA Streamline IRRRLs are allowed under the following circumstances:
- Pay off veteran‘s existing VA loan with current entitlement being transferred to the new loan. No additional entitlement will be used. Regardless of the amount of entitlement being transferred to the new refinance loan, the guaranty coverage will be 25%.
- New interest rate must be lower than the existing interest rate (unless refinancing from an ARM to a fixed rate).
- Veteran must sign statement acknowledging the interest rate and the payments of the new loan versus the old loan and how long it will take to recoup all closing costs paid (both those closing costs included in the loan and those paid outside of closing.
- May include existing VA loan balance, allowable closing costs, prepaids, energy efficient improvements up to $6,000 completed within 90 days immediately preceding loan closing and up to a maximum of 2% discount points.
- Pay off of second liens is not allowed. Second liens are to be subordinated with no consideration to the CLTV.
- Total loan amount may not exceed the appraised value or original loan amount, which may include the funding fee.
- Cash-out is not allowed. However, a maximum of $500 may be allowed due to computational error, changes in the final payoff, up-front paid outside of closing (POC) items being reimbursed or refund of an escrow account on the old loan if different lender other than the current holder originates loan. Loan amount calculated when submitting to underwriting should reflect no funds going back to the borrower. Any cash-out (other than POC items) on loans in Texas is not allowed.
- High balance VA Streamline IRRRLs are not allowed.
- The required 25% guaranty is considered satisfied on an IRRRL regardless of the dollar amount of guaranty being transferred from the previous loan.
IRRRL Lenders: More Information
- GMAC VA IRRRL Program
- Citibank VA IRRRL Program
- Chase VA IRRRL Program
- Wells Fargo VA IRRRL Program
- Bank of America VA IRRRL Program
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