VA Refinance Guidelines For IRRRL and Cash-Out Refinance

VA Refinance Guidelines encompass two distinct mortgage processes: the VA streamline refinance (IRRRL), and the VA cash-out refinance. Gustan Cho Associates specializes in assisting homeowners with rate and term VA streamline refinances and cash-out VA refinance mortgages. Dale Elenteny, a senior mortgage loan originator at Gustan Cho Associates says the following about VA refinance guidelines for IRRL and cash-out refinance loans:

Discover the latest VA refinance guidelines for IRRRL and cash-out refinance loans in 2025. Learn eligibility, benefits, and steps to lower your rate or access home equity with expert insights.

This article will cover the VA refinance guidelines for both VA streamlines and cash-out refinance loans, providing essential information for those interested in VA home loans. In the following paragraphs, we will cover VA refinance guidelines for streamlines, and cash-out refinance loans.

Who Qualifies For A VA Refinance Mortgage Loan?

The United States Department of Veterans Affairs (VA) guarantees VA Loans, and qualified lenders may issue them. The main purpose of VA home loans is to provide long-term financing to long-term financing to eligible American veterans or their surviving spouses as long as they do not remarry.

The fundamental goal of the VA direct home loan program is to allow eligible veterans to obtain home financing, enabling them to buy primary homes to live in with no down payment required.

To qualify for a VA home loan for buying or refinancing, you must be a current active-duty service member or a retired veteran with an honorable discharge who meets the minimum military service requirements to obtain a VA certificate of eligibility. This includes serving in a branch of the U.S. Armed Services for at least 90 consecutive active days during wartime or at least 181 consecutive days of active military service during peacetime. This article will cover and discuss VA Refinance Guidelines with no lender overlays.

VA Refinance Guidelines For IRRRL and Cash-Out Refinance

Explore VA refinance guidelines for 2025, including IRRRL and Cash-Out Refinance loans. Find eligibility, benefits, and easy steps to lock in a lower rate or tap your home’s equity. Veterans and active-duty military personnel have a solid mortgage toolset thanks to the VA mortgage guarantee program.

Among the niftiest benefits are the streamlined refinancing loans designed to bring costs down or unlock a piece of your home’s equity—without the hassle found in conventional loans.

The two main mortgage routes are the Interest Rate Reduction Refinance Loan (IRRRL) and the Cash-Out Refinance. This guide walks you through the latest guidelines, perks, and eligibility rules for both loans, so you can decide what gets you closer to your goals.

Quick Look at VA Refinance Loans

VA refinance loans help eligible veterans, active-duty service members, and their surviving spouses change existing VA or non-VA mortgages for better terms or to withdraw some cash for important purchases. Whether you want a lower monthly payment, savings on your interest costs, or cash for a home project, the VA’s program is designed to have lower costs, fewer credit hurdles, and no monthly mortgage insurance, making it a smart way to refinance your mortgage.

Why Choose a VA Refinance?

Taking a VA refinance loan is a smart choice if you want to save money and keep flexible terms. Here’s what makes them special:

• Lower Interest Rates: These loans usually have better rates since the Department of Veterans Affairs backs them.
• No PMI: VA refinancing skips the private mortgage insurance that can add to your monthly bill, even if your home has little or no equity.
• Flexible Credit Rules: Lenders care more about your complete payment history than a single credit score, making it easier to get approved if your credit is not perfect.
• Minimal Closing Costs: Upfront fees are typically lower, and in some cases, certain costs can be included in the total loan amount, making them easier to cover at closing.

Who Qualifies for VA Refinance Loans?

Whether you are looking at the Interest Rate Reduction Refinance Loan (IRRRL) or the VA Cash-Out Refinance, certain standards have to be met for VA loans:

• You must be an on-duty service member, a veteran with an honorable discharge, or a surviving spouse who has not remarried.
• You need at least 90 consecutive days of service during wartime or 181 days during peace time.
• You will also need a VA Certificate of Eligibility (COE) to prove your service.

Finally, you must meet any lender’s standards, which usually include examining your credit score and debt-to-income (DTI) ratio.

VA IRRRL (Streamline Refinance) Guidelines

The VA Interest Rate Reduction Refinance Loan, usually called the Streamline Refinance, helps veterans with a VA mortgage cut their interest rate or modify their loan terms without much paperwork.

What Is a VA IRRRL?

An IRRRL lets borrowers replace their existing VA loan with a new one, usually at a lower rate, or switch from an adjustable-rate mortgage (ARM) to a fixed rate. Its “streamline” name means it uses less paperwork and has fewer steps than other refinancing options.

Key Guidelines for VA IRRRL

• Existing VA Loan Required: The mortgage you want to refinance must already be a VA loan.
• No Appraisal or Income Verification: Most borrowers do not need new appraisals or income documents, so you save time and money.
• Payment History: You must show 12 months of on-time payments on the current VA loan.
• Credit Score: The VA does not set a minimum score, but most lenders prefer 620–640.
• Some will accept scores as low as 580 if you have a solid payment record.
• Net Tangible Benefit: The new loan has to save you money, whether through a lower interest rate or lower monthly payment.
• Funding Fee: An initial 0.5% VA funding fee is part of the deal, but the good news is it can be rolled into the loan.
• Veterans with service-connected disabilities, surviving spouses, and active-duty Purple Heart recipients can skip this fee.
• Occupancy: You must live in the home as your main residence.
• If you previously lived there, exceptions may apply.

Benefits of a VA IRRRL

• Lower Monthly Payments: A lower interest rate can mean savings of several hundred dollars each year.
• Fast Processing: The loan gets approved quickly because the paperwork is easier.
• No Out-of-Pocket Costs: Closing costs can typically be added to your loan balance, so you don’t have to pay anything at signing.
• Switch to Fixed Rate: If you have an adjustable-rate mortgage, you can switch to a fixed-rate loan for steady, predictable payments.

When to Consider an IRRRL

Think about an IRRRL if:

• – Mortgage rates have fallen by at least 0.5%.
• You want smaller monthly payments and don’t need to take out equity.
• You’d rather have a fixed rate to avoid unexpected hikes.
• Your credit score has increased, possibly allowing you to score a lower rate.

VA Cash-Out Refinance Guidelines

Through the VA Cash-Out Refinance, veterans can access their home’s equity. The existing mortgage is paid off with a larger loan, and the borrower gets the difference in cash. This product works for existing VA, FHA, USDA, or conventional loans.

What Is a VA Cash-Out Refinance?

A VA Cash-Out Refinance replaces your existing VA mortgage and lets you tap into your home’s equity, even covering closing costs and the VA funding fee. Whatever you take out as cash can be used for anything from paying off high-interest debt to renovating your home.

Key Guidelines for VA Cash-Out Refinance

• Loan-to-Value (LTV) Ratio: You can cash out up to 100% of the home’s appraised value.
• That amount can also include the closing costs and funding fee.
• Appraisal Required: A VA-approved appraisal is required to determine your equity.
• Credit Score: The VA doesn’t set a minimum score, but most lenders want you to have at least 620.
• If your score is lower, some lenders might still approve you if you have other strong financials.
• Debt-to-Income Ratio: VA lenders usually want a debt-to-income ratio (DTI) of 41% or lower.
• However, they can be flexible if you have a strong profile.
• Funding Fee: The funding fee will be between 2.15% and 3.3% of the loan amount, based on whether this is your first VA loan or a subsequent one.
• Some veterans—such as those with a disability, surviving spouses, and Purple Heart recipients—are exempt from this fee.
• Occupancy: The home should usually be your primary residence, but there may be options if the house is not owner-occupied.
• Payment History: Lenders will check your mortgage payment history, but the criteria aren’t as strict as those for conventional loans.

Benefits of VA Cash-Out Refinance  

• Access to Equity: Cash-Out Refinance lets you tap home equity to pay for renovations, settle debt, or cover bills like medical expenses or school tuition.
• No PMI: Even when you draw cash to reach a 100% loan-to-value (LTV) ratio, there’s no private mortgage insurance to pay each month.

Flexible Use of Funds

• The cash received can be spent on anything you choose—there are no rules about how to use it.
• Competitive Rates: VA loans usually have lower interest rates than private-sector cash-out refinance loans, making them an attractive choice.

When to Consider a Cash-Out Refinance  

Tap a Cash-Out Refinance When:  

• You face major costs—like paying off high-interest debt or updating key areas of your home—and need the money upfront.
• The home’s worth has risen, giving you equity to use, or you’ve paid down the mortgage enough to generate equity.
• You have an existing mortgage that is not VA and want to switch to VA terms that save you money or improve protections.
• You’re okay completing a normal refinance process, which includes providing updated income, asset documents, and an appraisal.

Comparing IRRRL and Cash-Out Refinance  

Both VA Refinance Programs Help Veterans, But They Meet Different Goals:  

• Purpose: Interest Rate Reduction Refinancing Loan (IRRRL) lowers your rate or changes the loan term.
• The Cash-Out option lets you take equity in cash.
• Documentation: The IRRRL is “streamline,” so it needs fewer documents.
• The Cash-Out requires a complete underwriting, including credit and pay history.
• Funding Fee: IRRRL’s fee is relatively low—0.5%.
• The Cash-Out feerangesg from 2.15% to 3.3%, depending on your down payment and circumstances.
• Appraisal: The IRRRL may not require an appraisal if your loan balance is the same or lower.
• The Cash-Out loan always needs an appraisal to establishthe  current home value.

How to Refinance With a VA Loan

VA Refinance Program Options

First, know that each VA refinance program has its own rules. The Interest Rate Reduction Refinance Loan (IRRRL) is for homeowners with a VA loan. The VA Cash-Out Refinance, however, is available to anyonewiths a VA loan and to some borrowerswithe other types of loans.

The Application Process

• Define Your Purpose: Decide if your goal is to lower your monthly mortgage payment (choose IRRRL) or to pull cash out for home improvements or other expenses (choose Cash-Out).
• Confirm VA Eligibility: Ensure you’re still eligible for a VA loan.
• This is easily done by obtaining your Certificate of Eligibility (COE) from the VA.
• Gather Loan Estimates: Go to several VA-approved lenders and request loan estimates.
• This will help you compare interest rates, closing costs, and loan termston make an informed choice.
• Run the Numbers: Use a VA refinance calculator to see how much you’ll save each month.
• Look for the break-even point—when your savings cover the costs you had to pay up-front.
• Complete the Application: Complete the application form and submit your supporting documents.
• You’ll need pay stubs, bank statements, and possibly other proof of income for a Cash-Out loan.
• For an IRRRL, a recent mortgage statement is usually enough.
• Close the Loan: At the closing, you’ll review the final loan terms, sign the paperwork, and pay any closing costs or add them to your loan amount.

Smart Refinancing Strategies

• Boost Your Credit: Paying down debts can raise your credit score, which might result in a lower interest rate.
• Compare Multiple Offers: Interest rates and loan fees vary widely, so get estimates from at least three VA-approved lenders.
• Time the Market: Look to refinance when mortgage interest rates have dropped by at least half a percentage point or when your home has appreciated a lot in value.
• Calculate Costs vs. Savings: Make sure that the monthly savings you’re getting outweigh the costs you pay at closing.
• Work With a Specialist: A loan officer specializing in VA loans can explain your options and help you secure the best deal.

FAQs About VA Refinance Loans

What’s The Difference Between a VA IRRRL And a Cash-Out Refinance?

• The IRRRL, or Interest Rate Reduction Refinance Loan, helps current VA borrowers lower their interest rate or change their loan term with little paperwork.
• In contrast, the Cash-Out Refinance lets you pull cash from your home’s equity.
• It needs a full appraisal and the usual underwriting paperwork.

Do I Need an Appraisal For a VA IRRRL?

• Usually, no.
• An IRRRL doesn’t need an appraisal, so the process is sped up and costs are cut.
• Still, the lender may ask for one if your situation calls for extra proof.

Can I Use a Cash-Out Refinance for Anything I Want?

• Yes, the cash you get from a VA Cash-Out Refinance is flexible.
• You can use it to pay off debts, renovate your home, or handle a surprise medical bill, among other uses.

What is The VA Funding Fee, and Can I Get Out of Paying It?

• The VA funding fee is 0.5% for an IRRRL and between 2.15% and 3.3% for a Cash-Out Refinance, depending on whether you’ve used your benefit before.
• Veterans with service-related disabilities, surviving spouses, and active-duty members who earned a Purple Heart can skip the fee.

Can I Refinance a Non-VA Loan With a VA Cash-Out Refinance?

• You can change an FHA, USDA, or conventional loan to a VA Cash-Out Refinanc ifs you meet the VA’s service and eligibility rules.

How Long Does The VA Refinance Process Take?

• If you’re considering refinancing your VA loan, you probably want to know how long it will take.
• The good news is that the VA has streamlined some options to speed things up.

Interest Rate Reduction Refinance Loan (IRRRL)

An Interest Rate Reduction Refinance Loan, or IRRRL, can close in as little as 2 to 4 weeks. Because the IRRRL process doesn’t require much paperwork or a new credit check, it’s one of the quickest options for veterans.

Cash-Out Refinance

The Cash-Out Refinance will take longer if you need to take cash out of your home for debt, home improvements, or other expenses. With this option, you can expect a typical timeline of 4 to 8 weeks. The final time will depend on how long the appraisal and underwriting approvals take.

Overall, the refinance process can be slower or faster based onyour loan typee. A good lender will keep you updated to ensure everything moves smoothly so you can enjoy your lower rate or the extra cash as soon as possible.

VA Loan Requirements

The significant benefits of VA home loans include offering 100% financing, meaning no down payment is required. Additionally, closing costs can be covered with the seller concessions or lender credit.

VA loans is the only mortgage loan program that does not require Private Mortgage Insurance (PMI) with less than a 20% down payment.

Under VA refinance guidelines, veterans can access 103.3% financing (with no PMI) or a 20% second mortgage up to $6,000 for energy-efficient improvements. The “funding fee” is also known as the “catch.” It can vary from 0 to 3.3% of the total loan amount and is payable to the VA. Nonetheless, it is possible to finance this funding fee, usually added to the VA loan amount.

When Can You Refinance Your VA loan?

Veteran homebuyers who purchased a home at a high mortgage rate due to having lower credit scores and have rebuilt their scores after closing on their home should consider refinancing at a lower rate.

VA mortgage rates are based on the borrower’s credit scores. The higher the credit scores of the borrower, the lower the mortgage rates.

To refinance into a VA loan — a mortgage backed by the Department of Veterans Affairs — you’re required to wait at least 210 days or long enough to have made six payments, whichever is longer.

Comparing VA Purchase Loan Requirements versus VA Refinance Guidelines

In a home purchase, veterans can borrow up to 103.3% of the sales price or appraised value, whichever is less. Due to the absence of monthly PMI, more mortgage payments go directly toward qualifying for the loan amount, enabling larger loans with the same payment. According to VA Refinance Guidelines, veterans may borrow up to 100% of the home’s reasonable value when a new VA loan is created, subject to state laws. VA Home Loans offer these flexible borrowing options to eligible veterans.

Refinancing a Current VA Loan To a New VA Streamline

When refinancing with a VA loan to another VA loan (IRRRL Refinance), the borrower may obtain up to 100.5% of the total loan amount. The extra 0.5% funding fee is associated with a VA Interest Rate Reduction Refinance. This blog focuses on VA refinancing. VA home loans allow veterans to qualify for larger loan amounts than traditional Fannie Mae/conforming loans, offering a valuable benefit to our brave men and women serving in the armed forces, which aligns with VA refinance guidelines.

VA Lender Overlays versus Agency VA Refinance Guidelines

The benefits of VA oans are the following:

• VA does not have any credit score requirements
• However, to get approve/eligible per Automated Underwriting System, the veteran borrower should have at least a 580 credit score
• VA does not have a maximum debt-to-income ratio requirement
• I have gotten approve/eligible on veteran borrowers with 580 credit scores and 60% DTI countless times and closed on their VA Loans
• The VA will insure a mortgage where the monthly payment of the loan is up to 60% of the gross monthly income versus 50% for a conforming loan
• The maximum VA loan guarantee varies by county
• As of 1 January 2020, there is no maximum loan limit on VA loans

This holds true although this amount may rise over $970,800 in certain specified “high-cost counties.

Types of VA Refinances

Eligible borrowers can refinance their homes with a VA loan. VA loans offer to refinance mortgages up to 100% LTV with no annual mortgage insurance at competitive mortgage rates. The main loan level pricing adjustments on VA loans are mortgage rates. The higher the credit scores, the lower the mortgage rates.

Can I Refinance With VA Loans?

Homeowners with a mortgage loan other than a VA loan can refinance to a VA loan. This includes homeowners with current conventional, FHA, USDA, Jumbo, or non-QM loans.

If for one reason or another you have a home financed with a different type of mortgage loan program other than a VA loan but have a VA certificate of eligibility (COE) and want to refinance it to a VA loan, you are allowed.

VA streamline refinance mortgages only allows homeowners with a VA loan to refinance into a new VA loan. It is only for a VA-to-VA refinance transaction. VA refinance loan guidelines allow rate and term refinance with loan to value up to 100% LTV.

How Can I Qualify For VA Streamline Refinance?

If you have a current VA loan and has been at least six months since you closed on your home purchase with the VA loan and have been timely with no late payments, you are eligible for a VA streamline refinance mortgage.

The second option is if you had your current VA loan for a longer term, you are allowed on 30-day late payments in the past 12 months.

The VA streamline refinance mortgage is commonly referred to as the VA IRRRL. IRRRL stands for Interest Rate Reduction Refinance Loan.

What Documents and Paperwork are Required For a VA Streamline Refinance?

The VA IRRRL is a VA refinance loan with a fast-track streamlined mortgage process with much less paperwork, no income verification, no appraisal, and much less paperwork than a standard VA rate and term mortgage. Borrowers can get a net tangible benefit with a streamline refinance with a lower rate with a fraction of the paperwork and closing in three weeks or less. There are no out-of-pocket closing costs on VA streamline refinance with the exception of the VA funding fee.

Why VA IRRRL Streamline Is Different And Faster Than Rate and Term VA Refinance Loans

VA streamline requires no income documentation. This means the borrower doesn’t need to produce copies of their W2 forms, tax returns, or even pay stubs. Moreover, no verification of employment is needed whatsoever. However, specific lenders may include an appraisal or credit check as part of their internal risk assessment.

Closing costs are usually charged by mortgage companies, but the categories and amounts can range from among companies.

VA guidelines allow their funding fee and any closing costs to be rolled into the loan so that homeowners can refinance without out-of-pocket expenses. There is also a possibility of rolling in the expense of energy improvements on the home loan.

VA Streamline Loan Requirements

For IRRRL with the program, the current loan must be a VA loan. The interest rate on the new mortgage must also be lower than that of the current loan (the exception to this restriction is when refinancing from an adjustable-rate mortgage to a fixed-rate mortgage).

Veterans may not receive any cash from the loan proceeds and no other debt, other than the original VA loan, may be paid off with the new loan Veterans must also verify that they previously occupied the home as a primary residence. Additional qualification criteria can apply based on individual lenders.

VA Cash-Out Refinance Mortgage Guidelines

A VA cash-out refinance is a loan that replaces an existing loan with a VA loan and pulls cash equity out of the property and into the pocket of the borrower. This is a fully documented loan, unlike the IRRRL, and requires the borrower to furnish their most recent paycheck stubs, W2 forms, and two years of federal tax returns to the VA lender.

The amount of cash available to the borrower is calculated by determining the appraised value of the property. Most lenders will allow a cash-out loan amount of up to 90% percent of the appraised value.

For example, a borrower has a loan amount of $100,000 and wants to refinance to a lower rate. The appraised value is reported at $130,000, allowing for a maximum cash-out loan of 90% percent of the appraised value. Gustan Cho Associates will lend up to 90% LTV on VA cash-out refinance with an approve/eligible per Automated Underwriting System.

Refinancing Conventional To VA Loan

While a VA IRRRL refinance only allows a VA-to-VA transaction, VA loans can refinance other existing loan types including FHA and conventional mortgages. These types of loans are less common but can be advantageous to the borrower. Conventional loans allow for a refinance of up to 90 percent of the current value of the property.

If an existing mortgage balance is $100,000 then the appraisal must be at least $111,111 before a conventional refinance can take place. If the home value comes in closer to $100,000, then the borrower can’t refinance their conventional loan with another conventional loan (the 90% threshold isn’t met).

But refinancing into a VA loan can be an option in this case. A standard VA refinance (no cash-out) allows the loan amount to be up to 100 percent of the value of the home. In the above-mentioned example, let’s say the property is appraised at $105,000 the loan can be refinanced from a conventional mortgage to a VA loan. If the interest rate is low enough for the VA loan compared to an existing conventional or FHA loan, then it can make sense to refinance into a new VA mortgage.

FHA And VA Cash-Out Refinance During Chapter 13 Bankruptcy

Many homeowners who file bankruptcy often want to keep their homes and reaffirm their mortgages. By reaffirming the mortgage, it means that the bankruptcy petitioner is willing to keep their home and keep their mortgage payment current. Going forward, reaffirmed mortgages need to be paid timely.

Bottom line is that bankruptcy petitioners are asking the U.S. Bankruptcy Courts for permission in excluding their home loans outside bankruptcy.

If the Bankruptcy Trustee is convinced the petitioner is able to afford their mortgage payments, then the reaffirmation of the mortgage gets confirmed. There are no loan-level pricing adjustments on bankruptcy and/or foreclosure. What this means is borrowers will not get penalized by paying a higher rate due to a prior bankruptcy and/or a housing event such as a foreclosure, deed in lieu of foreclosure, or short sale.

Ending Chapter 13 Repayment Early With An FHA And VA Cash-Out Refinance During Chapter 13 Bankruptcy

Homeowners can qualify for an FHA and VA cash-out refinance during the Chapter 13 Bankruptcy repayment plan. Home values have been skyrocketing for the past several years. Many homeowners have substantial equity in their homes due to the booming housing market. Many of our borrowers who are in a Chapter 13 bankruptcy repayment plan are doing a cash-out refinance with an FHA and/or VA loans and ending the Chapter 13 repayment early.

FHA and/or VA Cash-Out Refinance During Chapter 13 Bankruptcy Payment Plan To Buy Out Chapter 13 Bankruptcy Debt Early

Many of our clients have more than enough money from the proceeds of the cash-out refinance. You need to be in the Chapter 13 bankruptcy repayment plan for at least 12 months to become eligible.

It needs to be a manual underwrite and needs trustee approval. There is no waiting period after the Chapter 13 Bankruptcy discharge date.

If the bankruptcy discharge has not been seasoned for at least 24 months, it needs to be a manual underwrite. The maximum loan-to-value on FHA cash-out refinance loans is 80% LTV. VA loans allow up to a 100% cash-out refinance.

Taking Advantage Of Low Rates With A Rate And Term Refinance During Or After Bankruptcy

Homeowners who want to take advantage of today’s historic rates can do a rate and term refinance and can save tens of thousands of dollars during the life of the loan. Borrowers with higher than 4.0% rates can refinance after bankruptcy with rate and term loans to lower their payments. Or if they have equity in their homes, they can refinance after bankruptcy and do a cash-out refinance. In this blog, we will discuss qualifying for a mortgage after bankruptcy and the waiting period requirements.

Lowering Monthly Payments By Refinance After Bankruptcy

After consumers get their bankruptcy discharged, they have a fresh start in life. Most never want to see credit again. However, many folks with a home mortgage often want to know if they can lower their mortgage payments by refinancing after bankruptcy. With mortgage rates at historic lows and being at a 24-month low, many homeowners with VA and/or FHA Loans can take advantage of VA and/or FHA Streamline Refinance. loans.

Save Tens of Thousands of Dollars By Refinancing with Streamline Refinance Loan

VA and FHA offer a fast-track streamline refinance loan program with limited documentation. There is no appraisal required, no income documentation, and borrowers can close in 21 days or less.

Rate and term refinance are only allowed with streamlines. Credit scores determine mortgage rates. The higher the credit score, the lower the mortgage rates.

There is no waiting period after bankruptcy to qualify for VA and/or FHA Streamline Refinance. Cash-out is not allowed on streamline refinances.

How Can I Qualify For An FHA and/or VA Cash-Out Refinance During Chapter 13 Bankruptcy

To do a full credit and income-qualified refinance after bankruptcy, there are mandatory waiting period requirements. Here is the waiting period to refinance after bankruptcy:

FHA loans require a two-year waiting period after the Chapter 7 Bankruptcy discharge date. VA home loans require a two-year waiting period after the Chapter 7 Bankruptcy discharge date.

USDA loans require a three-year waiting period. Fannie Mae and Freddie Mac require a four-year waiting period to refinance after the bankruptcy discharge date. NON-QM loans have no waiting period requirements.

FHA and VA Manual Underwriting During Chapter 13 Bankruptcy Repayment Plan

VA and FHA allow borrowers to refinance during a Chapter 13 Bankruptcy repayment plan with trustee approval but needs to be a manual underwrite. There is no waiting period after a Chapter 13 Bankruptcy discharge date on VA and FHA loans. Any VA and/or FHA loans with less than 2 years or less after Chapter 13 Bankruptcy discharged date seasoning needs to be manually underwritten.

Loan To Value Cash-Out Refinance Mortgage Guidelines

The following are loan-to-value requirements when it comes to cash-out refinance mortgage:

• HUD allows up to an 80% loan-to-value on cash-out refinance.
• VA allows up to 100% loan-to-value on cash-out refinance.
• Fannie Mae and Freddie Mac allow up to an 80% loan-to-value cash-out refinance mortgage on conventional loans.

If your home has equity, you can put that equity to work for you and start saving money each and every month. You will want to choose the right loan officer who has the knowledge to put you in the best financial situation possible! Our team is educated in helping you use your equity to use for your situation!

FHA and VA Manual Underwriting Cash-Out Refinance Guidelines During Chapter 13 Bankruptcy

Borrowers who need to qualify for a mortgage with a mortgage company licensed in multiple states with no lender overlays on government and conventional loans, please contact us at Gustan Cho Associates at 800-900-8569. Borrowers can email us at alex@gustancho.com or text us for a faster response.

Gustan Cho Associates are experts in helping borrowers qualify for an FHA and/or VA loan during the Chapter 13 Bankruptcy repayment plan.

Gustan Cho Associates are experts in manual underwriting. There is no waiting period after the Chapter 13 Bankruptcy discharge date. We have a national reputation for not having any lender overlays on government and conventional loans. Borrowers can email us at gcho@gustancho.com. Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

VA Refinance Mortgage Options For Homeowners

VA loans are the best loan program in the United States. VA loans have the lowest mortgage rates than any other government and/or conventional loan. However, only eligible veteran borrowers can qualify for VA loans.

VA cash-out refinance mortgage loans are standard VA loan refinance mortgage loans and a VA homeowner can get 100% loan to value cash out on a VA cash-out refinance mortgage loan.

There are countless benefits of VA refinance loans during today’s booming housing market with historically low rates. In this article, we will discuss and cover VA Refinance Loans and using VA loans to refinance in today’s hot housing market.

General Guidelines on VA Refinance Loans

In today’s crazy mortgage market, we are receiving more and more phone calls from our nation’s veterans inquiring about refinancing guidelines. This is a great time for a veteran to complete a refinance transaction.

Most calls we receive are questions regarding the VA interest rate reduction refinancing loan (IRRRL) as well as VA cash-out refinance guideline questions.

Gustan Cho Associates are experts in VA mortgage financing. In this blog, we will detail a few guidelines for VA refinancing and how to apply for a VA refinance with our team.

What Are VA Refinance Loans

First, let us understand a few basics. What is a VA refinance? A VA refinance can be many different things. The basic definition is a VA refinance means you pay off your current mortgage and start a new VA mortgage loan. There are a few different transaction types available. You can complete a rate and term refinance, cash-out refinance, or an interest rate reduction refinancing loan.

Rate And Term VA Refinance Loans

A rate and term refinance will simply re-cast your current mortgage into new terms. Meaning you may move up from a 30-year fixed mortgage to a 15-year fixed mortgage. You may also move back in term and restart a 30-year mortgage to lower your overall monthly payment. A VA rate and term refinance is not a very common type of transaction. But it is a great opportunity to save money with today’s historically low-interest rates.

VA Cash-Out Refinance Mortgages

VA cash-out refinancing is a very popular mortgage program. This allows a veteran to utilize the equity in their home for other purposes such as paying off debt, home improvements, or investment opportunities. A veteran is entitled to all the equity in their home and can cash out up to 100% of the value of their property.

Many lending institutions will only allow a veteran to utilize a cash-out transaction up to 90% loan to value. However, that is an overlay and not a guideline.

Please keep in mind if you are going to go above 90% loan to value, there is a hit in the interest rate. Meaning your interest rate will be lower if you stay at 90% loan to value or below. A cash-out refinance will pay off your current mortgage and then add to your loan amount and use that extra amount to give you cash or pay off other bills.

Shopping For The Best Mortgage Rates On VA IRRRL Refinance

Not all VA lenders have the same mortgage rates on VA streamline refinance loans. Make sure you shop around for the best rates. The higher the credit scores, the lower your mortgage rates.

The lower your mortgage rates on a VA IRRRL refinance, the more money you will be saving. VA interest rate reduction refinancing loan.

This is commonly referred to as an IRRRL transaction. This is a great opportunity to lower your overall monthly obligation and save thousands of dollars over the life of the loan on interest payments.

Net Tangible Benefit Requirements on VA IRRRL Refinance

There are very specific requirements set forth by the VA but at its most basic qualifications, a lender must lower the veteran’s rate by at least half a percent. These savings cannot come at a long-term cost to the veteran. All closing costs must be recouped within 36 months, or the transaction is not allowed per VA guidelines.

This is a failsafe to ensure lenders are not practicing churning or veterans are not equity stripping their property. VA interest rate reduction refinancing loans are the most common VA refinance.

This is a great time to take advantage of this program as many experts predict interest rates will start to rise especially as inflation continues to rise. While nobody can predict the future, if you have not already completed an interest rate reduction refinancing loan, we encourage you to reach out to our team as fast as possible.

210-Day Rule

210-day rule – VA mortgage lending has very strict seasoning requirements before you are allowed to refinance a current VA loan. All VA refinance transactions require the veteran to be in their current VA home loan a minimum of 210 days AFTER the veteran makes their first payment on the mortgage.

If a veteran just bought a house, they are not eligible for a refinance transaction until 210 days have elapsed from the date, they made their first payment.

This is incredibly important. With historic low rates, many veterans are trying to refinance before this 210-day seasoning requirement is met.

Waiting Period Guidelines To Refinance

Most veterans assume they need to wait 210 days from the date they close the transaction. We need to be very clear, so veterans understand the 210-day clock starts on the day you make your first payment on your VA current mortgage loan. How to start the VA refinancing process? After reading this, if you think you and your family can benefit from refinancing with a VA mortgage loan, below are the steps to take. First, you will contact Mike Gracz and (800) 900-8569 or send an email to alex@gustancho.com. Mike will then go over your financial situation in detail.

Starting The Mortgage Process

It is important to understand that all veteran’s qualifications are different. After your one-on-one consultation, Mike will pair you with a licensed loan officer in which the property is located. After you fill out the application link that will be sent to you, your loan officer will start the origination process. They will pull your credit and review your income and asset documentation.

Depending on the loan program you choose, you may or may not need an appraisal. While waiting for the appraisal or other verifications, your file will be moved to a processing team. Your processing team will then get your file ready for the underwriting team.

The underwriting team will let us know if any other items are needed to close the refinance transaction. Gustan Cho Associates have come across many scenarios surrounding VA mortgage lending. There are very few situations we have not encountered. We are available seven days a week and would love to help you and your family better understand your VA refinance options. Many of our clients have run into issues with their current lender and we are able to help. While rates are still low, we encourage you to reach out to us today at 800-900-8569 or email us at alex@gustancho.com. Text us for a faster response.

VA Refinance Requirements And Guidelines On VA Loans

VA Loans are extremely popular mortgage loans in the United States. VA loans offer no money down on a home purchase and have very lenient mortgage lending guidelines. VA loans do not require monthly mortgage insurance. John Strange, a senior mortgage loan originator at Gustan Cho Associates says the following about VA refinance requirements and guidelines on VA loans:

VA loans offer one of the lowest mortgage rates out of all mortgage loan programs around. However, VA Loans are only available to veterans of the United States Armed Services with a VA Certificate Of Eligibility

The U.S. Department of Veteran Affairs is in charge of setting up rules and regulations on VA loans. The VA does not fund VA mortgage loans. The VA insures VA loans to private lenders in the event the borrower defaults and forecloses on their VA loans. In this article, we will cover and discuss VA Refinance Requirements And Guidelines on VA loans.

Role and Function of The Department of Veterans Affairs

The Department of Veteran Affairs’ function is to insure and guarantee VA Loans that are originated by lenders even if a borrower were to default on their VA loan. Due to the guarantee by the Department of Veteran Affairs, lenders can offer the lowest possible mortgage rates on VA loans. This holds true even though the borrower does not put any money down.

Down payment has a major impact on mortgage rates on Conventional loans. This is because the less down payment a home buyer has to put down, the more risk the lender faces.

This is because it is easy for a homeowner to walk out of their mortgage loan obligations if they have no skin in the game and have no money of their own invested in the home they are buying. However, if a homeowner has his or their hard-earned money invested in a home purchase, they are much less likely to walk away from their mortgage obligations if they were going through some tough financial times.

Benefits of Refinancing on VA Loans

Refinancing a home loan is when a homeowner pays off their current mortgage loan and replaces the existing home loan with another brand new mortgage loan to lower their monthly payment and/or get a cash-out. There are two types of VA Refinancing. A VA streamline refinance mortgage, also known as anIRRRL For Veterans.

Interest rate reduction refinance loan which is a Department of Veteran Affairs mortgage loan program that streamlines a current VA Loan by only requiring minimal documents from the veteran.

There is no home appraisal is not required. There are no credit score requirements. There are no income and employment verification required. The second type of VA refinance is a standard VA loan refinance mortgage. With a VA Loan Refinance Mortgage, it is like getting a brand new VA loan. A new home appraisal is required, and the credit will be pulled. Income and employment verification are required.

Can You Get Cash Back on a VA IRRRL?

Receiving cashback is impossible on a VA interest rate reduction refinance loan (IRRRL), also called a VA streamline refinance. According to VA refinance guidelines, the VA IRRRL is designed to help veterans and active-duty service members lower their interest rates and monthly mortgage payments on their existing VA home loans. It is a streamlined process that involves less documentation and can be completed more quickly than other types of refinancing.

Key Features of a VA IRRRL

• No Cash-Out: VA refinance guidelines specify that the VA IRRRL does not allow cash withdrawals.
• The loan amount can only cover the existing loan balance, eligible closing costs, and up to two discount points to reduce the interest rate.
• Reduced Interest Rate: The primary goal of the VA IRRRL is to secure a lower interest rate and reduce monthly payments.
• It can also switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
• No Appraisal Required: Typically, an appraisal is not required for a VA IRRRL, which simplifies the process and reduces costs.
• No Credit Underwriting Package: A VA IRRRL usually does not require a credit underwriting package. However, some lenders may have their own requirements.
• Funding Fee: The VA IRRRL qualifies for a lower funding fee, which can be included in the loan balance.
• Occupancy Requirements: VA refinance guidelines require certification that the veteran previously occupied the property.
• However, the veteran does not need to occupy the property at the time of the refinance.
  Closing Costs: The closing costs may be rolled into the new loan, enabling the veteran to refinance with limited upfront costs.

Steps to Apply for a VA IRRRL:

• Determine Eligibility: Ensure you are eligible for a VA IRRRL.
• Typically, you must have an existing VA loan.
• Choose a Lender: Select a VA-approved lender to handle the refinance.
  Provide Documentation: Although minimal, you must provide certain documents, such as your current mortgage statement and proof of previous occupancy.
  Complete the Process: Work with your lender to finalize the refinance, including paying any applicable fees and completing the closing.

The IRRRL for VA is a great choice for veterans interested in reducing their interest rate and monthly payments without dealing with the complexity and expenses of a standard refinance. Still, it is not designed to provide cash-out benefits. To access your home equity, consider a VA cash-out refinance instead.

VA Loan Limits

The Department of Veteran Affairs does not have a maximum VA Loan Amount Requirement. The VA no longer has a maximum loan amount that they will guarantee on a VA Loan. The VA Loan Guarantee amount used to be 25% of the VA mortgage loan.

As an example, if a particular Lender will originate and fund a $300,000 VA mortgage loan, the Department of Veteran Affairs guarantees 25% of that VA Loan amount to the lender in the event that the borrower was not to pay their mortgage loan and go into default.

Lenders used to set the maximum VA Loan limit they will fund which used to be $647,200 unless the property is located in a high-cost area like many parts of California. However, the new law removed the maximum VA Loan Limit on VA Home Loans.

How Often Can You Refinance IRRRL?

According to VA refinance guidelines, there is no specific limit on the number of times you can refinance your VA home loan using an Interest Rate Reduction Refinance Loan (IRRRL). However, there are important considerations and requirements to keep in mind:

Key Considerations for Refinancing with an IRRRL:

Net Tangible Benefit

• The refinancing should offer a clear benefit to the borrower, such as a reduced interest rate or a change from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
• According to VA refinance guidelines, lenders will evaluate whether the refinance improves the borrower’s financial situation.

Seasoning Requirements

• VA refinance guidelines typically require a seasoning period before you can refinance with an IRL. T
• he standard requirement is to make at least six successive monthly payments on your existing VA loan.
• The loan should be at least 210 days old from the first payment date to be eligible for refinancing.

Costs and Fees

• While you can refinance multiple times, it’s important to consider the costs and fees associated with each refinance.
• Closing costs, funding fees, and other expenses can add up, so ensure that the benefits of refinancing outweigh these costs.

Lender Requirements

• Different lenders may have policies and requirements regarding how often you can refinance.
• Some lenders may impose additional restrictions or guidelines, so it’s important to check with your lender.

Financial Impact

• Please consider the total financial consequences of refinancing on multiple occasions.
• Although reducing your interest rate and monthly payments can be advantageous, frequent refinancing can prolong the duration of your loan and raise the overall interest paid throughout the loan’s lifespan.

While there is no hard limit on the number of times you can use a VA IRL, it’s important to carefully consider the financial implications and ensure each refinance provides a clear benefit.

Seeking advice from a mortgage expert can assist you in making well-informed choices according to your situation. VA home loans offer flexible and beneficial refinancing options, but understanding VA refinance guidelines is crucial for making the best choice.

VA Cash-Out Refinance Mortgage Guidelines

One great benefit that homeowners have is that VA Refinance Requirements on VA cash-out refinance mortgage loans is that VA allows lenders to lend up to 100% loan to value on cash-out refinance borrowers.

• Let’s take a case scenario of a borrower needing a 100% LTV cash-out refinance mortgage
• If a VA borrower has a home that is appraised at $400,000, the lender can lend up to $400,000 to this borrower
• If this borrower has a current VA loan of $300,000 and the closing costs for this VA Refinance mortgage loan is $10,000, the net proceeds that will go to this borrower would be $90,000
• The $400,000 new loan amount is less the $300,000 current VA Loan payoff, less the $10,000 VA Refinance mortgage loan closing costs

VA Refinance Requirements on Documentation Requirements

VA Refinance Requirements on a VA Streamline Refinance Mortgage, IRRRL, does not require any income or employment verification. However, this does not apply to an IRRRL or VA Streamline Refinance Mortgage Loan.

With a VA Cash-Out Refinance, lenders will require income and employment verification and the borrower needs to make sure that they have the appropriate debt-to-income ratio requirements.

To do a VA cash-out refinance, full documentation, appraisal, and credit evalution is required. Two years of tax returns, two years of W2s, and 30 days of the borrower’s paycheck stubs will be required.

VA Refinance Guidelines on Credit Requirements

On VA Streamline Refinance Mortgages, IRRRL, the lender will not have any credit score requirements. Lenders do not care about any other derogatory credit the borrower has with the exception that the borrower has been timely with their current mortgage payments for the past 12 months. However, credit scores and credit requirements do apply for VA cash-out refinance mortgage loan borrowers.

A home appraisal is required and the borrower can borrow up to 100% loan to value on a VA cash-out refinance mortgage loan.

When a VA cash-out borrower is considering a cash-out refinance mortgage loan, both the loan officer and the borrower should do their due diligence and make sure that there is a net tangible benefit to the borrower. Needs to have benefited the borrower by doing the refinance. VA loans do have a requirement for the VA funding fee. The VA funding fee can be as much as 3.15% of the amount of the VA. This VA funding fee will reduce the net proceeds of the cash that the VA borrower will receive from the cash-out refinance mortgage.

FAQs: VA Refinance Guidelines For IRRRL and Cash-Out Refinance

What are the VA refinance guidelines for streamline and cash-out refinancing?

• VA refinance guidelines outline two different mortgage processes for VA home loans: the VA streamline refinance (IRRRL) and the VA cash-out refinance.
• Gustan Cho Associates can assist homeowners with both types, providing detailed information and support.

Who Qualifies For a VA Refinance Mortgage Loan?

• To qualify for a VA refinance mortgage loan, you must be an eligible American veteran, active-duty service member, or surviving spouse of a veteran.
• You need to meet specific service requirements, such as serving at least 90 consecutive days during wartime or 181 consecutive days during peacetime.

What Are The Requirements For a VA Loan?

• VA loans offer 100% financing with no down payment required.
• They do not require Private Mortgage Insurance (PMI) and include a funding fee that can be financed into the loan.
• The loan allows veterans to borrow up to 103.3% of the home’s value for energy-efficient improvements.

When Can You Refinance Your VA Loan?

• You can refinance your VA loan after a seasoning period of at least 210 days from the date of the first payment and make at least six consecutive monthly payments on the current VA loan.

Can You Get Cash Back on a VA IRRRL?

• You cannot get cash back on a VA IRRRL.
• This type of refinance is designed to lower your interest rate and monthly payments, not to provide cash-out benefits.

How Often Can You Refinance With a VA IRRRL?

• According to VA refinance guidelines, there is no specific limit on how many times you can refinance using a VA IRRRL.
• However, each refinance must provide a net tangible benefit, and you must meet the seasoning requirements.

What Are The Key Features of a VA IRRRL?

• The VA IRRRL offers no cash-out, typically requires no appraisal or credit underwriting package, and comes with a lower funding fee.
• It is designed to streamline the refinancing process for veterans, reducing the interest rate and monthly payments.

What Documents and Paperwork Are Required For a VA Streamline Refinance?

• The VA IRRRL process is streamlined with minimal paperwork.
• Generally, you must provide your current mortgage statement and proof of previous occupancy.
• No income verification or appraisal is typically required.

What Are The Benefits of a VA Cash-Out Refinance?

• A VA cash-out refinance allows you to replace your existing loan with a new VA loan and take cash out based on your home equity.
• You can borrow up to 100% of the appraised value of your home, subject to lender requirements.

Can You Refinance Other Loan Types Into a VA oLan?

• Yes, homeowners with conventional, FHA, USDA, Jumbo, or non-QM loans can refinance into a VA loan if they have a VA certificate of eligibility (COE).
• However, VA streamlines refinance (IRRRL) is only available for VA-to-VA refinances.

What Are The VA Refinance Guidelines on Credit Requirements For Cash-Out Refinances?

• For a VA cash-out refinance, lenders will require income and employment verification to meet the appropriate debt-to-income ratio requirements.
• A credit check and a home appraisal are also required.

What is The Waiting Period For Refinancing a VA Loan After Bankruptcy?

• A two-year waiting period following Chapter 7 bankruptcy discharge is necessary for VA loans.
• VA loans do not have a waiting period after Chapter 13 bankruptcy discharge.
• Still, if under two years have passed, they must undergo manual underwriting.

If you are interested in doing a VA mortgage refinance and are looking for a VA lender with no lender overlays, please contact us at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Our staff and I are available 7 days a week, evenings, weekends, and holidays to take your phone calls or answer your email inquiries.

This blog about VA Refinance Guidelines For IRRRL and Cash-Out Refinance was updated on September 8, 2025.