When interest rates are low, many Veterans who have VA loans in Arizona are interested in possibly doing a VA IRRRL streamline refinance.

But when is the VA IRRRL allowed?

The VA IRRRL Streamline Refinance program allows 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 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.

If you are a Veteran who currently has a VA loan, it may make sense to speak with a loan officer about whether or not the VA IRRRL streamline refinance will help you lower your monthly mortgage payment – and now you have a good idea about when the VA IRRRL program is allowed.

Related Posts

• VA Streamline: Appraisal May Now Be Needed
• VA Streamline Refinance Program: AKA The VA IRRRL Program
• The VA IRRL Streamline Refinance Program: No Appraisal Required

Another day, another change that some investors are now requiring — this one for people who are currently in a VA loan and want to do a VA streamline refinance.

For as long as I can remember, the VA streamline refinance (aka the VA IRRRL program) did not require an appraisal for the borrower to participate in the VA streamline program and get a lower interest rate.

But that may be changing. Or, maybe a better way to say it is that it for sure is changing for some lenders.

As of recently, some lenders who lend money on these loans to require some form of an appraisal. Some lenders are now requiring a full blown appraisal, some are only requiring a drive-by appraisal — but the point is that many are now requiring it where before they did not.

Note: I haven’t heard anything about FHA/VA changing their criteria for what they will insure — so to my knowledge, an appraisal is currently not required in order for a VA streamline to be insured.

As an example, an announcement by Wells Fargo to all correspondent lenders said:

“in an effort to mitigate the risk of declining home values on VA IRRRL transactions on May 18th will require the seller to obtain and deliver a conventional appraisal to Wells Fargo. Please Note: VA has indicated this appraisal should not be submitted to the VA with the guaranty package.”

Does this really make any sense?

Not really.

But it isn’t the first time that things haven’t made sense to me in the mortgage market recently.

If you are in the market for a VA streamline and your loan officer is telling you that an appraisal is now required, be sure to ask him if he has access to any other VA lenders – many lenders are still not requiring VA streamlines to have an appraisal.

Related Posts

• VA IRRRL Streamline Refinance: When Is An IRRRL Allowed?
• VA Streamline Refinance Program: AKA The VA IRRRL Program
• The VA IRRL Streamline Refinance Program: No Appraisal Required

VA Streamline Refinance Program (aka The VA IRRRL Program)

The VA Streamline Refinance is designed to help veterans secure the lowest fixed interest rate available and is also known as the VA Interest Rate Reduction Loan program (IRRRL). This loan option is a way for current VA homeowners to lower their interest rate with very little or no out-of-pocket costs. The VA IRRRL Streamline is supposed to be “fast and easy” with minimum documentation requirements, it can help veterans start saving money on their monthly mortgage immediately.

VA Streamline Program highlights include:

• No appraisal is required
• Will not need to provide bank statements, W2s, job verification or paycheck stubs
• You cannot receive any cash at closing
• It is possible to roll all closing costs and prepaid items into the loan amount – so no out-of-pocket costs
• You must be current on your existing VA mortgage and not have had more than one 30-day late mortgage payment within the last 12 months.
• Upon closing, it is possible to defer a monthly mortgage payment
• Within 30 days of closing, you will receive the money that was held in your old escrow account because a new escrow account will be set up with your new loan

VA Streamline Refinance Information from VA.gov

“Veterans are strongly urged to contact several lenders.  There may be big differences in the terms offered by the various lenders you contact.

Some lenders may contact you suggesting that they are the only lender with authority to make IRRRLs.  Remember – Any lender may make you an IRRRL.

Some lenders may say that VA requires certain closing costs to be charged and included in the loan.  Remember – The only cost required by VA is a funding fee of one-half of one percent of the loan amount which may be paid in cash or included in the loan.

The occupancy requirement for an IRRRL is different from other VA loans.  When you originally got your VA loan, you certified that you occupied or intended to occupy the home.  For an IRRRL you need only certify that you previously occupied it.”

If you are veteran, now is a great time to see if the VA Streamline program can help you lower your monthly payments.

Related Posts

• VA IRRRL Streamline Refinance: When Is An IRRRL Allowed?
• VA Streamline: Appraisal May Now Be Needed
• Top 10 Ways To Speed Up The VA Loan Approval Process
• The VA IRRL Streamline Refinance Program: No Appraisal Required