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VA Streamline Refinancing Rules: A Reader Question

087-logoA reader asks, “What is required to refinance a VA IRRRL if the veteran is self employed but your spouse (non veteran) is employed?”

This is an interesting question. VA Interest Rate Reduction Refinancing Loans, also known as VA IRRRLs, feature no VA-required appraisal or credit check. In cases where the lender does not require a credit check, the same underwriting information used to process the original loan would apply for the VA IRRRL. Therefore, the self-employment issue wouldn’t be a factor–unless the lender requires the credit check.

In such cases, the self-employed borrower may be required to furnish additional paperwork to show that being self-employed is a viable source of steady, reliable income.

What kind of documentation might the lender need? Profit and loss statements, tax documentation, business plans, any paperwork that can show the ebb and flow of the borrower’s business and what kind of sustainable income is derived from that business.

Self-employed borrowers do have a tougher time with this paperwork in circumstances where the business is young and there isn’t much data for the lender to examine. A borrower who has been self-employed for some time would have an easier time showing verifiable income if the business income is sustainable.

Borrowers who have fallen on hard times in the business world may need to give themselves more time to show dependable income once their business is back on its feet, so to speak.

At the end of the day, it’s the lender’s job to make sure the borrower can afford the loan being committed to on the VA loan application. Those who can show, with the right paperwork, that being self-employed permits them to do just that will find an easier time with the VA loan process.

Do you have questions about VA home loans? Ask us in the comments section.

Bruce Reichstein

About Bruce Reichstein

Bruce Reichstein is an Expert on (VA) Military/Veteran Home Loan Guidelines for over 26 years. He is an experienced VA Loan Mortgage Banker who is passionate about assisting US Military Veterans utilize their Veteran Eligibility to purchase a home.

2 Responses to VA Streamline Refinancing Rules: A Reader Question

  1. daniel says:

    If my mortgage loan does not have the 12 month payment history , can i apply for a VA/streamline?

    • Joe Wallace says:

      The amount of minimum payments required may depend on the lender-you would need to discuss your specific circumstances with the lender to determine how many payments must be made.

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