Are you a veteran or active-duty service member looking to refinance your existing VA loan? The VA Interest Rate Reduction Refinance Loan (IRRRL), also known as a VA streamline refinance loan, may be just the solution you need. In this guide, we'll explore the ins and outs of VA IRRRL, its eligibility criteria, costs, and how to maximize its benefits. Let's dive in and discover how the VA IRRRL can help you achieve a more manageable monthly payment and potentially save you thousands of dollars in the long run.

Short Summary

  • VA IRRRL is designed to help VA loan holders refinance for a lower interest rate.

  • Eligibility criteria include active duty service members, at least seven months of current VA loans, and no late payment in the past 12 months.

  • Using a trusted VA Lender, like us, and understanding ARM vs. Fixed Rate Mortgage options are essential to maximizing benefits from the program.

Understanding VA Interest Rate Reduction Refinance Loan (IRRRL)

An image showing the VA Interest Rate Reduction Refinance Loan (IRRRL) logo, which is a symbol of va interest rate reduction program.

The VA IRRRL, also known as the VA Streamline Refinance, is designed to help those with existing VA loans refinance to a lower interest rate with minimal hassle. This refinance loan has a quicker process and is more straightforward than a typical refinance. To be eligible for a VA IRRRL, you must be current on your mortgage payments which have been live for at least seven months or 210 days.

By refinancing through VA IRRRL, you can potentially lower your monthly payments and save money over time. We've been helping people get va backed loans for over 20 years and can help you with the different refinance options to find one that suits you best.

VA IRRRL Eligibility Criteria

google search for va irrrl streamline refinance eligibility, looking for va irrrl cost, va backed home loan refinance current loan for va borrowers

To qualify for a VA IRRRL, you must meet several eligibility criteria. These include possessing a current VA loan that has been open for at least 7 months (210 days), having no late payments in the past 12 months, and using the home as your primary residence.

Sorry, investment property doesn't work for these loans, but you can move out and rent the residence after you get the VA IRRRL refinance completed. Either way, you can save on your current mortgage, so that's a plus.

The new loan must also demonstrate a clear financial advantage, such as a lower interest rate or a more manageable monthly payment. Additionally, you must be an active-duty service member or veteran with a certain length of service and honorable discharge.

Occupancy Requirements

For VA IRRRL, there is no occupancy requirement post-closing, which means you don't have to live in the property after refinancing. However, you must attest that you previously resided in the home as your primary residence.

So, back to the investment property question. You can move out of the property afterward and rent out the home. Airbnb or a property management company could help make this rather profitable, especially around the more desirable parts of the Puget Sound.

VA IRRRL Costs and Fees

A person looking at VA IRRRL costs and fees, wallet showing a tape measure wrapped around it, constraints on wallet due to mortgage payment and mortgage insurance

Like any refinancing option, VA IRRRL comes with some costs and fees. One such cost is the VA funding fee, which amounts to 0.5% of the loan amount. This fee helps cover the cost of the loan and is specified by the Department of Veterans Affairs.

In addition to the funding fee, there are closing costs, which typically include origination fees, discount points (if applicable), and credit report fees. You can pay these costs upfront or include them in your new loan.

If you include the origination fee into the loan amount, it makes it so you can have a new home loan without a down payment or any cash out of your pocket.

Some veterans may be exempt from the funding fee, as we'll discuss in the next subsection. It's also worth noting that in some cases, the lender may absorb the VA loan costs in exchange for a higher interest rate on the loan. This can be an attractive option for those who want to minimize their out-of-pocket expenses during the refinancing process.

Funding Fee Exemptions

Certain veterans are exempt from paying the VA IRRRL funding fee. These include veterans who qualify for disability services through the VA, active-duty members of the military who have been awarded the Purple Heart, and some surviving spouses of veterans who passed away while serving.

If you fall into one of these categories, you can save a significant amount of money by not having to pay the 0.5% funding fee.

Steps to Apply for a VA IRRRL

A person looking at steps to apply for a VA IRRRL to reduce their existing loan, Asking mortgage lenders for a lower monthly payment without va irrrl funding fees and to refinance loans

Applying for a VA IRRRL is a relatively simple process. To get started, you'll need to locate a lender that offers VA Streamline Refinance and contact them. The lender will provide you with the necessary forms to complete the application process. Keep in mind that closing costs may vary depending on the lender and the loan terms, so it's essential to compare different lenders to find the best deal.

One of the advantages of VA IRRRL is the option to include energy-efficient improvements in your refinancing. Let's explore this further in the next subsection.

Energy-Efficient Improvements

When refinancing through VA IRRRL, you have the opportunity to include energy-efficient improvements in your loan, up to a maximum cost of $6,000. These improvements may consist of installing energy-efficient windows, doors, insulation, and HVAC systems.

By incorporating energy-efficient upgrades into your refinancing, you can not only increase the value and comfort of your home, but also lower your energy bills and contribute to a greener environment.

Comparing VA IRRRL Lenders

handshake after refinancing existing mortgage with our mortgage company, getting a new va loan with the same loan balance but a lower monthly mortgage payment

It's crucial to compare VA IRRRL lenders to ensure you get the best rates and fees. Interest rates, rules, and requirements may differ from one lender to another, and some lenders may require credit and income approval even though the VA does not. Choosing the right lender can make all the difference when it comes to availing the full set of VA IRRRL benefits. We've been helping veterans with VA loans for over 20 years in the JBLM area and can help anyone in Washington state with their VA loans or IRRRL.

The Department of Veterans Affairs offers a list of the most prominent VA loan lenders based on volume, which can be a helpful starting point in your search. For the most competitive VA refinance rates, it's recommended to compare personalized offers from at least 3-5 lenders. This will ensure you find the most advantageous deal for your situation.

Adjustable Rate Mortgage (ARM) vs. Fixed Rate Mortgage

A person comparing an adjustable rate mortgage and a fixed rate mortgage, the balance leans to the fixed rate mortgage side to save on interest payments and improve personal finance

When considering a refinance, it's important to weigh the pros and cons of an adjustable rate mortgage (ARM) versus a fixed rate mortgage. The primary difference between the two is that the interest rate on an ARM can fluctuate, while the interest rate on a fixed rate mortgage remains constant throughout the entire loan period.

Choosing between an ARM and a fixed rate mortgage depends on your financial goals and risk tolerance. An ARM may initially offer a lower interest rate, which can result in lower monthly payments. However, when interest rates rise, your monthly payments may increase as well.

On the other hand, a fixed rate mortgage provides predictable payments over the life of the loan, which can be beneficial for budgeting purposes. It's essential to carefully consider your options and consult with a VA-approved lender to determine the best choice for your unique situation.

Maximizing Your VA IRRRL Benefits

A person maximizing their VA IRRRL benefits, va compensation

To maximize your VA IRRRL benefits, it's important to take advantage of lower interest rates and predictable payments. By refinancing to a lower interest rate, you can reduce your monthly payment and save money over time. Additionally, a fixed-rate mortgage offers stability and peace of mind, as your monthly payments will remain constant throughout the life of the loan.

Another crucial step in maximizing your VA IRRRL benefits is consulting with a VA-approved lender. They can help you navigate the refinancing process, understand the costs and fees involved, and ensure you're getting the best deal possible. By working with a knowledgeable lender, you'll be better equipped to make informed decisions and fully leverage the advantages of the VA IRRRL program.

Alternatives to VA IRRRL Refinancing

A person looking at alternatives to VA IRRRL refinancing and other va loans, looking at cash out refinance options instead of their current mortgage at a local credit union

While VA IRRRL refinancing offers numerous benefits, it's essential to consider alternative options as well. One such alternative is a home equity loan or a home equity line of credit (HELOC) for additional funds. These loans use the equity in your home as collateral and can be used to finance home improvements, pay off debt, or cover other expenses.

When evaluating your refinancing options, it's crucial to weigh the pros and cons of each and determine which best aligns with your financial goals and needs. Consulting with a VA-approved lender can provide valuable insights and guidance in making the right decision for your situation.

VA Streamline Refinance Loans vs. VA Cash Out Refinance Loan

While both the VA Streamline Refinance (IRRRL) and the VA Cash Out Refinance are valuable refinancing tools for homeowners, they serve distinct purposes and have different qualifications.

The VA Streamline Refinance, officially known as the Interest Rate Reduction Refinance Loan (IRRRL), is designed specifically to refinance an existing VA home loan into a new one with a lower interest rate, or from an adjustable-rate to a fixed-rate. It's a streamlined process that requires less paperwork and underwriting than a standard refinance, hence the name "streamline." However, it does not allow you to take cash out of your home's equity, and it can only be used to refinance an existing VA loan.

On the contrary, a VA Cash Out Refinance Loan allows eligible homeowners to refinance their current mortgage, whether it's a VA or non-VA loan, and simultaneously tap into their home's equity to access cash. This is beneficial for homeowners who need extra cash for purposes such as debt consolidation, home improvements, or other significant expenses.

In summary, the choice between a VA IRRRL and a VA Cash Out Refinance Loan largely depends on your individual needs, your current type of mortgage, and how you plan to utilize your home equity.


In conclusion, the VA Interest Rate Reduction Refinance Loan (IRRRL) offers a valuable opportunity for veterans and active-duty service members to refinance their existing VA loans with minimal hassle.

By understanding eligibility criteria, costs, and benefits of VA IRRRL, and considering alternative options, you can make the most informed decision on your refinancing journey. Take advantage of the VA IRRRL program today and start enjoying lower monthly payments and potential savings that can significantly impact your financial future.

Call us for any questions or if you'd like to see what your refinance options are.

Frequently Asked Questions

What is a VA interest rate reduction?

A VA Interest Rate Reduction Refinance Loan (IRRRL) is a mortgage refinance program offered by the U.S. Department of Veterans Affairs that helps veterans who already have a VA home loan reduce their monthly mortgage payments and stabilize their payments with a lower interest rate.

This loan program offers veterans an opportunity to take advantage of the current low-interest rates.

What is VA Streamline interest rate reduction program?

The VA Streamline Refinance, otherwise known as the Interest Rate Reduction Refinance Loan (IRRRL), allows veterans and their families to refinance existing VA loans with lower interest rates. By taking advantage of this program, veterans can reduce their monthly payments and often lock in a lower interest rate.

Can veterans get lower interest rates?

Yes, veterans may be eligible for lower interest rates on mortgages, car loans, student loans, personal loans, and other types of financing. This can be done through negotiation with the lender for, or by paying a VA funding fee unless the veteran is exempt due to disability compensation. While no down payment is required, a VA refinance loan still has to go through the credit underwriting process.

How can I lower my VA interest rate?

To lower your VA interest rate, you can use a Department of Veterans Affairs (VA) Interest Rate Reduction Refinance Loan (IRRRL). A VA IRRRL allows borrowers to refinance an existing VA loan and get a lower interest rate.

This type of loan is available to veterans who have an existing VA loan and want to reduce their interest rate. It can also be used to refinance an adjustable-rate mortgage into a fixed-rate loan. The VA IRR.

Is the VA IRRRL program worth it?

Considering the potential benefits of a VA IRRRL, it may be worth pursuing if you can get a lower interest rate and more manageable monthly payments. Refinancing with this type of loan could save you money in the long run by reducing your total amount of interest paid over time.

Ultimately, only you can determine if a VA IRRRL is the best decision for your financial situation.