Interest Rate Reduction Refinance Loan (IRRRL)
Refinancing lets you replace your current loan with a new one under different terms. If you have an existing VA-backed home loan and you want to refinance to reduce your monthly mortgage payments—or make your payments more stable—an Interest Rate Reduction Refinance Loan (IRRRL) may be right for you. Find out if you can get an IRRRL and how to apply.
Can I get an IRRRL?
You may be able to get an IRRRL if you meet all of the requirements listed below.
All of these must be true. You:
- Already have a VA-backed home loan, and
- Are using the IRRRL to refinance your existing VA-backed home loan, and
- Can certify that you currently live in or used to live in the home covered by the loan
Note: If you have a second mortgage on the home, the holder must agree to make your new VA-backed loan the first mortgage.
Why might I want to get an IRRRL?
Often called a “streamline” refinance, an IRRRL may help you to:
- Lower your monthly mortgage payment by getting you a lower interest rate, or
- Make your monthly payments more stable by moving from a loan with an adjustable or variable interest rate (an interest rate that changes over time) to one that’s fixed (the same interest rate over the life of the loan)
On a no-down-payment loan, you can borrow up to the FannieMae/FreddieMac 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.
See current effective 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.
Visit the Consumer Financial Protection Bureau for more information.
Download the Bureau’s home loan toolkit.
How do I get an IRRRL?
Find a lender.
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: 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.
Give your lender any needed information.
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.
Follow your lender’s process for closing on the IRRRL loan, and pay your 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.