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Facts on Interest Rate Reduction Refinance Loan

By: Grant Moon 04/27/12 07:30 am

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A veteran can apply for an Interest Rate Reduction Refinance loan (IRRRL) if he or she has used the VA loan basic entitlement to apply for a VA loan. To sum it up, the IRRRL should be used to refinance an existing VA loan.

A few facts to be taken into consideration while applying for IRRRL include:

  1. Apply for a new VA case number via the VA Assignment system before considering an IRRRL.
  2. VA loan occupancy requirements for IRRRL is unlike  other VA loans and requires the veteran or the surviving spouse of active duty service members to certify that he or she has used the property before as his/her residence to satisfy occupancy requirements.
  3. Use Form 26-8923 (IRRRL worksheet), to work out the VA loan refinance rate. It includes existing VA loan balance with allowable fees and charges, plus a maximum discount of 2% for energy efficient improvements and a VA loan funding fee of 0.5% on the loan amount.
  4. The principal and the VA mortgage rate for the IRRRL should be less then the VA loan which is refinanced. Exceptions to this are when an adjustable rate mortgage is refinanced by a fixed VA loan refinance rate, when the period of the IRRL is less then that of the VA loan, or when an amount for energy efficient improvements are included in the IRRRL.
  5. A veteran does not have to submit a credit report or underwrite a VA loan, except if the VA loan to be refinanced is due for payment for more than 30 days, or if there is a 20% or more increase in monthly payments.
  6. A pre-approval is required if there are problems related to repayment of the existing VA loan that has to be refinanced.

VA Loan Captain can assist you in refinancing your existing VA loan via its network of VA approved lenders across the country. To learn more, please visit


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