If you have an existing VA-backed home loan and you want to reduce your monthly mortgage payments—or make your payments more stable—an interest rate reduction refinance loan (IRRRL) may be right for you. Refinancing lets you replace your current loan with a new one under different terms. Find out if you’re eligible—and how to apply.
You may be eligible for an IRRRL if you meet all of these requirements.
All of these must be true:
Note: If you have a second mortgage on the home, the holder must agree to make your new VA-backed loan the first mortgage.
Often called a “streamline” refinance, an IRRRL may help you to:
On a no-down-payment loan, you can borrow up to the Fannie Mae/Freddie Mac conforming loan limit in most areas—and more in some high-cost counties. You can borrow more than this amount if you want to make a down payment.
Learn about VA home loan limits
You’ll want to keep closing costs in mind when refinancing a loan, as they can add up to thousands of dollars. Before you decide to refinance, divide your closing costs by how much you expect to save every month by refinancing to see if it’s worth it. While your lender can advise you on the costs and benefits of the transaction, you’ll want to be sure you understand what you’re getting into.
Learn about the VA funding fee and other closing costs
Visit the Consumer Financial Protection Bureau for more information
Download the Bureau’s home loan toolkit (PDF)
You’ll go through a private bank, mortgage company, or credit union—not directly through us—to get an IRRRL. Terms and fees may vary, so contact several lenders to check out your options.
Note: If you have a VA home loan be careful when considering home loan refinance offers. Claims that you can skip payments or get very low interest rates or other terms that sound too good to be true may be signs of a misleading offer.
Learn more about the signs of misleading refinance offers
If you have the Certificate of Eligibility (COE) you used to get your original VA-backed home loan, take it to your lender to show the prior use of your entitlement. If you don’t have your original COE, ask your lender to get your COE electronically through the VA Home Loan program portal.
You may need to pay the VA funding fee. This one-time fee helps to lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn’t require down payments or monthly mortgage insurance. Your lender will also charge interest on the loan in addition to closing fees.
Learn about the VA funding fee and other closing costs
With an IRRRL, you can include these costs in the new loan so you don’t have to pay up front. Or, you may be able to make the new loan at an interest rate high enough so your lender can pay the costs.
Last updated: August 15, 2024