If you already have a VA loan and rates have moved since you closed, the IRRRL is usually the cheapest way to lower your payment. In this post, I’ll explain what the IRRRL is and how to qualify for it.
Short version. An IRRRL is a VA to VA refinance that lowers your rate with no appraisal and no credit underwriting in most cases. Federal law requires the costs to be recouped inside 36 months out of your lower payment, requires at least a 50 basis point rate improvement going fixed to fixed, and stops you closing until the later of six consecutive payments made and 210 days after your first payment due date. The funding fee is 0.50 percent unless you are exempt. Run your own numbers on the VA IRRRL recoupment calculator, then read on for the details.
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The IRRRL, pronounced “Earl”, short for Interest Rate Reduction Refinance Loan is a streamlined VA refinance program for you to get a rate and term refinance of your VA loan.
The pros are easy underwriting standards, quicker closing times and lower costs. On the con side, the IRRRL is not appropriate in every situation.
The IRRRL program is a VA to VA refinance for a rate and term VA loan refinance. If refinancing a FHA or conventional mortgage to VA, even if no cash out is taken, then a VA Cashout would need to be done instead of IRRRL.
Take the 30 second mortgage quiz to see if you qualify
It depends on the case. If the lender is charging one discount point or more, then the appraisal is required. If less than one point is being charged, the lender may, at its discretion, waive appraisal requirements.
VA HANDBOOK EXCERPT
“Generally, no appraisal, credit information or underwriting is required on an IRRRL, and any lender may close an IRRRL automatically.”
That is VA’s rule, not a lender’s marketing line. Your lender can still ask for an appraisal or credit documents to satisfy its own requirements, and it can charge you for them, but VA itself does not require either one on a standard IRRRL.
Source:
VA Lender’s Handbook (Pamphlet 26-7) – Chapter 6: Refinancing Loans, Topic 1a
The VA typically does not set any credit or income requirements for IRRRL loans. The exceptions to this are when the current VA loan is delinquent or if payments for the new VA loan are going up by 20% or more due to a term reduction. The lender, may at its discretion, institute their own credit and income requirements for borrowers applying for an IRRRL mortgage loan.
If you are delinquent on your VA loan, you may still qualify for the IRRRL to get caught up if the situation that caused the delinquency has been resolved. However, the IRRRL would require special approval from the VA.
No, you may use any approved VA mortgage lender for your IRRRL
Typically, you cannot get cash out on the IRRRL loan. The VA does provide exceptions to this to reimburse for up front costs, like an appraisal, or correcting any clerical errors. Additionally, up to $6000 may be taken as a cash out for home improvements that increase the energy efficiency of the property.
“Carlos did a great job closing our mortgage. He kept everything going on time and maintained open lines of communication throughout the process. Thanks, Carlos.”
No, you cannot. You would need to do a VA Cashout Refinance in this situation. But, you could keep the second mortgage open and just refi the VA loan as an IRRRL. This is called a subordination and you would need permission from the lender on the second mortgage in order to do this.
Story time: path found
The problem. A veteran wanted to drop his rate with a VA IRRRL, but he was not past the 210-day seasoning requirement yet and he did not want to bring money to the table.
What I did. I structured it around the calendar. Lender credit covered the closing costs, and because VA does not let me apply lender credit to the broker fee on an IRRRL, that piece got financed instead. I timed the closing for the first date the seasoning rule allowed, which also lined up his payment schedule in his favor, and his existing escrow balance refunds after closing.
How it ended. He reviewed the loan estimate and told me to set it up.
On an IRRRL, the closing date is part of the structure, not an afterthought.
See If You Qualify Or call or text me at 937-572-3713.
You cannot close until the later of two dates: the date you have made six consecutive monthly payments on the loan being refinanced, and the date 210 days after that loan’s first payment due date. Note that the 210 days runs from the first payment due date, not from the day the loan funded, and both tests have to be met, so whichever comes later is the one that governs. Six payments in six consecutive months is the standard, so catching two payments up in the same month does not satisfy it. You can start the application before that date, you just cannot close. This is set by federal law, 38 U.S.C. § 3709(c).
Yes, and the number depends on what you are refinancing into. Congress set this in 2018 to stop veterans being churned from loan to loan, and it now sits in federal law at 38 U.S.C. § 3709(b). Fixed rate into a new fixed rate has to improve by at least 50 basis points, which is half a percent. Fixed rate into an adjustable rate has to improve by at least 200 basis points, a full two points. The law also says the lower rate cannot come solely from discount points unless the resulting loan stays inside the loan-to-value limits it sets out. Separately, the VA Lender’s Handbook requires the new rate to be lower than the old one unless the loan being refinanced is an ARM, and requires the principal and interest payment to come down unless you are refinancing an ARM, shortening the term, or adding energy efficiency improvements.
All of the fees, closing costs and expenses of the refinance have to be scheduled to be recouped within 36 months of loan issuance, out of your lower monthly payment, and your lender has to certify it to VA. Divide the recoupable costs by the monthly saving and you have the recoupment period. Taxes, amounts held in escrow and the VA funding fee are excluded from that calculation by law (38 U.S.C. § 3709(a)). The handbook notes the recoupment statement is not required in the limited cases where your payment is not decreasing, such as a reduced loan term. You can run your own numbers on my VA IRRRL recoupment calculator, which shows the break-even month and whether 36 months is met.
Yes, you can. You will need to certify that you lived there when you took out the first VA loan but you do not need to currently live in the property to get the IRRRL.
Your remaining entitlement stays at exactly the same amount when doing a IRRRL, even if the IRRRL for a different loan amount than the original VA loan.
Entitlement works very differently if someone assumes your VA loan. If you are on the selling side, read how to protect your entitlement in a VA loan assumption.
The VA limits how far you can stretch the term. The maximum is the original term of the loan being refinanced plus 10 years, not to exceed 30 years and 32 days. The handbook’s own example: if the old loan was made with a 15 year term, the new loan cannot exceed 25 years. Note that it is measured from the original term, not from the years you have left, which is a detail a lot of write-ups get wrong.
VA HANDBOOK EXCERPT
“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 limit runs off the original term, not the years you have left, which is the detail most write-ups get wrong.
Source:
VA Lender’s Handbook (Pamphlet 26-7) – Chapter 6: Refinancing Loans, Topic 1
Yes, all veterans who are not exempt, pay a 1/2% funding fee when getting a IRRRL. Veterans who have exempt status due to a service related disability do not need to pay the funding fee.
That half percent is exactly what Congress is looking at right now. Here is why nearly tripling the IRRRL funding fee is a bad idea.
Yes, you can get closing costs financed with the IRRRL or the lender can use lender credits to offset the closing costs. However, the total loan amount including financed closing costs cannot exceed 100% of the property value.
For who pays the funding fee, who is exempt, and how to get one refunded, see the full funding fee guide.
Take the 30 second mortgage quiz to see if you qualify
You have a lot of choices when deciding which loan officer to use for your IRRRL mortgage loan. Edge Home Finance, LLC is licensed in 49 states and the District of Columbia, everywhere except New York, so wherever your VA loan is, here are a few reasons you should consider me to be your IRRRL mortgage loan officer for your VA Streamline Refinance.
I hope this post answers your questions about the IRRRL program. Thank you for your service to our country and I hope to hear from you soon.
You can check the recoupment test on your own numbers with my VA IRRRL recoup calculator. If the fees do not pay for themselves inside 36 months, the loan is not allowed, no matter how good the rate looks.
While you are looking at the payment, check the tax side too. A service-connected rating may qualify you for a state property tax exemption on the home; my Disabled Veteran Property Tax Exemption Guide has the amount, form and deadline for every state.
A condition by condition comparison of VA minimum property requirements and Fannie Mae’s conventional property condition rules, with the Selling Guide sections cited.
VA revised Chapter 12 effective May 1, 2026. Here is what changed on paint, radon, sheds and heaters, what did not change, and how I handle each on a live file.
A walkthrough of VA Loans Made Easy, my free VA loan community: the classroom lessons, the calculator section, a free copy of my book, and a chat area where you can ask me a question and get an answer.
Take the 30 second mortgage quiz to see if you qualify
