Richie TaylorHawaii Mortgage Broker · NMLS 1603145

For veterans and military families

VA IRRRL streamline refinance in Hawaii

If you already have a VA loan, an Interest Rate Reduction Refinance Loan can lower your rate with less paperwork than a regular refinance. I will run the numbers and tell you plainly if it is worth doing.

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The three federal tests every IRRRL must pass

Since 2018, federal law sets clear limits on VA streamline refinances to protect veterans from loan churning. These come from 38 U.S.C. § 3709, added by the Economic Growth, Regulatory Relief, and Consumer Protection Act (Pub. L. 115-174, § 309).

  • Seasoning. The later of 210 days after your first payment was due, or 6 consecutive monthly payments made.
  • Net tangible benefit. Fixed to fixed: the new rate must be at least 0.50 points lower. Fixed to adjustable: at least 2.00 points lower.
  • Fee recoupment. All fees and closing costs must be recouped through the lower payment within 36 months.

Source: 38 U.S.C. § 3709, Refinancing of housing loans (uscode.house.gov). VA Lender's Handbook, M26-7, Chapter 6 (benefits.va.gov).

What makes an IRRRL simpler

  • VA does not require an appraisal.
  • VA does not require income verification or a new Certificate of Eligibility.
  • You do not have to live in the home now. You must certify that you lived there before.
  • The funding fee is 0.5 percent, and most veterans receiving disability compensation are exempt.

When I will tell you not to do it

If the savings do not clear the 36-month test, or if restarting a 30-year term costs you more over time than you save, I will say so. The math decides, not the commission.

Common questions

How soon can I do a VA IRRRL after buying?

Federal law requires the later of 210 days after the first payment due date on your current VA loan, or 6 consecutive monthly payments made. (38 U.S.C. 3709(c))

How much does my rate need to drop?

For a fixed-rate to fixed-rate IRRRL, the new rate must be at least 0.50 percentage points lower. Moving from a fixed rate to an adjustable rate requires at least 2.00 points lower. (38 U.S.C. 3709(b))

What is the 36-month recoupment rule?

The fees and closing costs of the refinance must be paid back through your lower monthly payment within 36 months. If they are not, the VA will not guarantee the loan. (38 U.S.C. 3709(a))

Is there a funding fee?

The IRRRL funding fee is 0.5 percent of the loan amount. Veterans receiving VA disability compensation are generally exempt. (38 U.S.C. 3729)

Do I need an appraisal or income documents?

VA does not require an appraisal or income verification for an IRRRL. Some lenders add their own requirements, which is one reason I shop several.

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