VA refinance

VA Streamline Refinancing Loan Amounts

March 1, 2013

VA Streamline Refinancing Loan Amounts

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It’s normal for a borrower to ask, “How much can I borrow with a VA Streamline Refinance loan?” The answer, according to the VA official site, is that there is no set dollar amount maximum.

Instead, the VA Streamline Refinance program calculates the maximum mortgage amount as described by VA Pamphlet 26-7:”VA guarantees at least 25 percent of the loan amount (without regard to the veteran’s entitlement)”.

VA Pamphlet 26-7 adds, “…the new loan amount may be more than the limits established by the secondary market. It is the lender’s responsibility to ensure it has a marketable loan.”

Borrowers should know the VA Streamline Refinance loan, also known as a VA IRRRL, does not affect the borrower’s amount of VA loan entitlement, much unlike the original VA mortgage loan being refinanced. “No additional charge is made to the veteran’s entitlement for an IRRRL; such as, the amount of the veteran’s previously used and available entitlement remains the same before and after obtaining the IRRRL.”

When it comes to loan amounts, the VA official site says the IRRRL or VA Streamline Loan may be the same as, greater or less than the original amount of the VA mortgage. “This may impact the amount of guaranty on the new loan,” according to the VA, “but not the veteran’s use of entitlement.”To better explain this, the Department of Veterans Affairs has some examples. Here’s one where the VA Streamline Loan amount is greater than the original mortgage loan amount.

Example Of New Loan Amount More Than Old Loan
The existing VA loan was originally made for $110,000 with a guaranty of $27,500, or 25 percent. The new IRRRL is for $112,000.  The guaranty on the new loan is $28,000 or 25 percent, but the veteran’s entitlement use remains at $27,500.”

This next example illustrates a situation where the new loan amount is less than the original mortgage.
“The existing VA loan was originally made for $42,000 with a guaranty of $25,000, or almost 60 percent (the percentage applicable under former law).  The new IRRRL is for $40,000.  The guaranty on the new loan is $20,000 or 50 percent, but the veteran’s entitlement use remains at $25,000.”

For more information on VA Streamline loans, speak to a loan officer or contact the VA directly.

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

4 Comments
  1. Barry Levesque

    What is the rate today (08 Mar 13) for an IRRRL?

    • Joe Wallace

      You can pre-qualify for an IRRRL at www.valoans.com and a representative will be in touch with the rate information and other details.

  2. Mike

    If the house is move in ready, and pass the inspection. Can I still request additional money left over from the preapproval letter, to upgrade some areas in my house? For instance I was approved for 15000.00, but the property I'm thinking about is only 75000.00. Can I still asked for 11000.00 and use the remaining money for upgrades ?

    • Joe Wallace

      VA loans don't allow cash back to the borrower, but speak to your lender about a VA mortgage that includes allowed upgrades or improvements to the home. If you don't have a lender, you can pre-qualify at www.VALoans.com (a private company, not a government agency).

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