VA Streamline Refinance IRRRL Guidelines and Credit Requirements

The VA Streamline IRRRL Refinance Program offered by Lendia is a powerful program that allows eligible veterans to refinance their home with no appraisal, no income or asset documentation.  An IRRRL is a VA-guaranteed loan made to refinance an existing VA-guaranteed loan, generally at a lower interest rate than the existing VA loan, and with lower principal and interest payments than the existing VA loan.

The only solid requirement needed is that you must have a current VA Loan in order to be eligible for the program. It comes with the standard VA Funding Fee of 0.5% which is waived for eligible veterans who are exempt from it.

VA Homeowners can choose to roll the closing costs and fees into the balance of the loan and still manage to save on their monthly payments and this way they avoid out-of-pocket costs. Lendia’s VA Streamline IRRRL Refinance Program does not leave the homeowner paying any fees at close of escrow. An added bonus is you get refunded your existing impound account monies at close of escrow from your existing servicer since we will set up a new impound account at closing.

What are Lendia’s Requirements for a VA Streamline Refinance?

Lendia’s VA Streamline IRRRL Program does not require an appraisal, income or asset documentation!

Lendia’s VA Streamline IRRRL Refinance Borrower Eligibility Requirements:

Generally, the party(ies) obligated on the original loan must be the same on the new loan (and the veteran must still own the property). It is at the discretion of Lendia to require credit qualification in the cases where the obligor changes.

The following table has been provided as a guide to help determine when a change in obligor may or may not be acceptable.  Final determination of the acceptability is at the discretion of Lendia.

Lendia’s VA Streamline IRRRL Refinance (Loan Amount, Credit Score and Loan to Value (LTV)) Requirements:

• For Loan Amounts ≤ $484,350, Lendia’s Minimum FICO Score is 600
• For Loan Amounts > $484,350 and < $1,000,000, Lendia’s Minimum FICO Score is 620
• Lendia Offers Mega Jumbo VA IRRRL with loan amounts as high as $3,000,000. Lendia’s minimum FICO for this program is 640
• The new loan must have a closing date that is at least 6 months from the old note date and the veteran cannot have been 30 days late during that 6 month period.
• If borrower is 30 day past due in last 6 months, then Lendia requires that the borrower’s ability to repay be verified by supplying income documentation. Note: Mortgage must remain current during application period and up to closing.
• Maximum loan amount for a VA IRRRL is

• Existing VA loan balances plus

• Late payments and late charges, plus

• Allowable fees and charges (includes up to two discount points), plus

• The VA funding fee

• Maximum Loan Term: The maximum loan term is the original term of the VA loan being refinanced plus 10 years, but not to exceed 30 years and 32 days. For example, if the old loan was made with a 15-year term, the term of the new loan cannot exceed 25 years

Lendia’s VA Streamline IRRRL Refinance VA Funding Fee Requirements:

The funding fee for Lendia’s VA Streamline IRRRL Program is a flat 0.5%

Lendia’s VA Streamline IRRRL Refinance Exemptions from Funding Fee Requirements:

The following individuals are exempt from the Funding Fee:

1. Veterans that are receiving compensation for service connected VA disability;
2. Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay;
3. Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan);
4. Veterans still on active awaiting discharge and who were rated eligible to receive compensation as a result of a pre-discharge disability examination and rating will be considered as receiving compensation as of that date; and
5. Veterans entitled to receive VA compensation for service-connected disabilities, but who are not presently in receipt because they are on active duty.

Lendia’s VA Streamline IRRRL Refinance Occupancy Requirements:

• For Owner Occupied Properties: The borrower(s) have to occupy the property as their primary residence to be eligible for a VA Streamline IRRRL Refinance with Lendia and utilize the minimum 600 FICO requirement.
• If the property is no longer owner occupied and is an investment property the minimum acceptable FICO score is 620 and the veteran or the spouse of an active service member must certify that he or she previously occupied the property as his or her home.

Lendia’s VA Streamline IRRRL Refinance Appraisal Requirements:

Lendia does not require an appraisal on VA Streamline IRRRL Refinances although we do run our own Automatic Valuation Models (AVMs) or in some instances we might request an exterior drive by appraisal of the property.

Lendia’s VA Streamline IRRRL Refinance Income and Liability Requirements:

Lendia does not require income verification on a VA Streamline IRRRL Refinance except in the following scenarios:

• The Term of the loan decreased whereby the new PITI payment is 20% higher than the existing PITI payment
• The payment increased by more than 20% since the borrower was refinancing from a lower rate ARM to a fixed rate product.
• In the event that the borrower has mortgage lates in the 6 months preceding the IRRRL refinance Lendia requires that the income be verified to ensure that the borrower has the ability to re-pay.
• If the recoupment period for the refinance is between 61 months and 120 months then Lendia’s ability to repay has to be excercised

Lendia accepts the following types of income sources:

• Salaried Borrower / Wage earner
• Self Employed Borrower
• Military / Active Duty
• Part time / second job and Seasonal Employment income
• Rental Income
• Alimony / Child support
• Unemployment benefits income
• Social Security income
• Retirement, Government, Annuity and Pension income
• Disability income
• Foster Care income
• Interest and Dividends income
• Capital Gains income
• Notes receivable income
• Tip income
• Trust income

Lendia’s VA Streamline IRRRL Refinance Property Requirements

No Termite Inspection and clearance is required for any property type for closing a Lendia VA Streamline Refinance IRRRL loan.

NOTE: Properties can not be vested in the name of irrevocable trust

Ineligible properties or collateral:

• Mobile Homes
• Mixed Use properties
• Multi family properties with more than 4 units
• Manufactured condos
• Bed and Breakfast properties
• Agricultural-type properties (such as farms, orchards or ranches) where income is being produced from the property

Lendia’s VA Streamline IRRRL Refinance Residual Income Requirements:

Residual income is the amount of net income remaining (after deduction of debts and obligations and monthly shelter expenses) to cover family living expenses such as food, health care, clothing, and gasoline. The numbers are based on data supplied in the Consumer Expenditures Survey (CES) published by the Department of Labor’s Bureau of Labor Statistics. They vary according to loan size, family size, and region of the country Count all members of the household (without regard to the nature of the relationship) when determining “family size,” including:

• An applicant’s spouse who is not joining in title or on the note, and
• Any other individuals who depend on the applicant for support. For example, children from a spouse’s prior marriage who are not t he applicant’s legal dependents.

Any individual from “family size” who isfully supported from a source of verified income which, for whatever reason, is not included in effective income in the loan analysis can be omitted. For example:

• A spouse not obligated on the note who has stable and reliable income sufficient to support his or her living expenses, or
• A child for whom sufficient foster care payments or child support is received regularly.

The residual income figure (from the following tables) is reduced by a minimum of five percent if:

• The applicant or spouse is an active-duty or retired serviceperson, and
• There is a clear indication that he or she will continue to receive the benefits resulting from use of military-based facilities located near the property.

Residual Incomes by Geographic Region for loan Amounts $79,999 and below

Residual Incomes by Geographic Region  for Loan Amounts of $80,000 and above

Key to Residual Income Geographic Regions

For credit qualifying VA Streamline IRRRL refinances where the borrower has to show income that are either due to high recoupment period, or if the PITI increased by more than 20% then an income ratio of 41% but less than 50% will require 120% of the VA’s residual income requirement.

Lendia’s VA Streamline IRRRL Refinance Escrow Account / Impound Account Requirements:

Lendia requires an escrow account or impound account to be set up at closing. This is always required on VA loans regardless of Loan to Value (LTV).

What documents do I need for a VA Streamline IRRRL Refinance?

Personal Information

• Your basic information like name, address, and phone number
• Previous addresses for the past 2 years
• Dates of birth and years of school completed
• Social Security numbers for all loan applicants – required for checking credit
• Copy of valid ID such as a driver’s license or government ID
• Number and age of dependents

Employment and Income

For Non-Credit Qualifying VA IRRRLs

• Name, address, phone number, and dates of employment for all employers over the last 2 years

For Credit Qualifying VA IRRRLs

• 30 days’ worth of paystubs
• Last 2 years’ W2s and federal tax returns (1040’s)
• If self employed: Last 2 years federal tax returns with all schedules (if you have commission or rental income to qualify, you will also need to provide tax returns)
• Copies of social security, pension, and/or retirement award letters and corresponding 1099s (if you receive this type of income)
• Divorce decree and settlement paperwork (if applicable)

Assets

For Non-Credit Qualifying VA IRRRLs

• NONE

For Credit Qualifying VA IRRRLs

• 2 Months bank statements for checking and savings accounts
• 2 Months statements for retirement accounts
• Real estate currently owned, if any

Property

• Name and contact information for the homeowner’s insurance agent or a copy of the insurance declaration page
• Name and phone number for the homeowner’s association, if applicable

Credit/Liabilities

For Non-Credit Qualifying VA IRRRLs

• See Fico requirements above

For Credit Qualifying VA IRRRLs

• General knowledge of your current credit card, student loan, auto loan, and other credit accounts. Lendia will pull a credit report that shows your accounts, but on occasion, the information may be outdated, missing, or erroneous.
• Amount paid each month in child care
• Explanation for derogatory credit (if applicable)
• Bankruptcy and discharge paperwork (if applicable)
• Documentation disproving any erroneous items on your credit report

Still have questions? You can find out more by calling Lendia at 949-333-4636. Our licensed VA mortgage professionals will guide you through the process.

Complete a simple contact form, and we’ll get in touch with you today.