VA IRRRL: Who Can Apply?
In recent weeks we’ve fielded several questions from readers about VA loan refinancing with the VA Interest Rate Reduction Refinancing Loan, also known as a VA Streamline Refinance or IRRRL.
There are many situations where a borrower might need to apply for a VA IRRRL and initiate a change from the original loan at the same time. For example, in cases where a veteran is going through a divorce and needs to get a loan in his or her name only, or in situations where the veteran borrower wants to transfer the loan into the name of the spouse.
VA loan rules are quite specific on when you can and cannot make changes on the VA loan in such a way. VA Pamphlet 26-7, Chapter Six has a section titled, “Who Can A VA IRRRL Be Made To?”. This section addresses a variety of situations where a VA IRRRL is and is not possible. It features a table listing scenarios where parties financially obligated on the VA loan changes, and whether a VA IRRRL is possible under those circumstances.
Here is that table reproduced in its entirety from Chapter Six–it addresses situations where an unmarried veteran wants to refinance with a new spouse, circumstances where a veteran and spouse get a divorce and the veteran wants to refinance alone, and many other situations. Check the table to see if your needs are addressed below:
VA Streamline Refinancing Loans that involve conditions as described above may require additional consideration by the lender. According to Chapter Six, “Although VA does not require any credit/income documentation or re-underwriting of IRRRLs when there has been a change in obligors, lenders may want to consider the following:
- Check mortgage payment record in lieu of obtaining a full credit report, unless required by investor.
- For death or divorce cases, obtain a statement from the obligor(s) on the ability to make payments on the new loan without the co-obligor’s income.
Obtain a statement about the addition of a different spouse, change in number of dependents, as applicable.”
If you have questions on a situation not covered by this table, contact the Department of Veterans Affairs directly by calling 1-800-827-1000.
Do you have questions about VA refinancing loans? Ask us in the comments section.