FLORIDA VA INTEREST RATE REDUCTION REFINANCE = (IRRRL)
Florida Veterans can use the (IRRRL) VA mortgage refinance also know as Interest Rate Reduction Refinance Loan to lower your VA mortgage interest rate by refinancing your existing Florida VA mortgage. By obtaining a lower VA mortgage interest rate, your monthly Florida VA mortgage payment should decrease. You can also VA refinance your Florida adjustable rate VA mortgage (ARM) into a fixed rate Florida VA mortgage.
Florida VA Streamline Mortgage Refinance Advantages!
- Lower Your monthly Mortgage payments
- No out-of-pocket costs required
- Lower funding fee (generally .5 percent of total loan amount)
- Funding fee and closing costs can be added to loan balance
- VA Mortgage refinances up to 100 percent of your Florida home’s value
- No appraisal required, in some cases
- No income, employment or credit report verification required by the VA
- No termite report required by the VA
- No need to obtain a new Certificate of Eligibility
- Extend your Florida mortgage repayment period to lower your monthly payments!
Florida VA Mortgage Refnance = Interest Rate Reduction Refinance Loans (IRRRL’s or Florida VA streamline refinance). Any veteran who has an existing VA loan can obtain a VA IRRRL. There is no credit report, income or deposit verifications, or appraisal required. The lender must certify either: • the interest rate and principal and interest payment is decreasing or, • the term of the loan is decreasing.
Who can obtain an Florida VA mortgage refinance aka IRRRL?
♦ original veteran who still owns the home
♦ surviving spouse (veteran deceased)
♦ original veteran and new spouse
♦ new veteran who substituted entitlement
Who can NOT obtain an Florida VA mortgage refinance aka IRRRL?
♦ veteran holding a conventional home loan
♦ veteran’s previous spouse (if divorced and spouse still in home)
♦ spouse who is not signed on original VA loan (if veteran divorced or deceased)
♦ non veteran (if closed as a joint loan and original veteran quit claims interest in property)
Minimum Required Documentation for Initial Underwriting Submission
The items on this list are considered minimum documentation requirements.
☐ Current payoff OR note OR current mortgage statement
In order to calculate Net Tangible Benefit (NTB) Florida VA mortgage Lenders need to have either a payoff, the original Note or a mortgage statement. In whichever document is provided, the original Note Rate must be included. If the mortgage statement or Note is
provided, Florida VA mortgage lenders will eventually also need a payoff covering disbursement that shows the Florida VA Mortgage Refinance Applicants is due for the month
they are disbursing in.
☐ Certificate of Eligibility (COE)
When requesting, do not select Cash Out version which will include Cash Out verbiage in the COE.
☐ Fully executed Florida VA Streamline Refinance Mortgage Application 1003/92900A
Must be signed by LO. Must be completed in Florida VA Mortgage Refinance Applicants ’s legal name AND match case #.
The following sections are not required to be completed on Non-Credit Qualifying IRRRL transactions:
• Section IV (Employment Information)
• Section V (Income Section)
• Section VI (Asset Section)
NOTE: The Florida VA Mortgage Refinance Applicants name on the warranty deed & Note must be spelled EXACTLY the same on the 1003 Florida VA Mortgage Refinance Loan Application.
☐ Mortgage-only credit report with scores (Non-Credit Qualifying) or full credit report (Credit Qualifying)
Required for all Florida VA Mortgage Refinance Applicants (s) which includes credit scores and public records
☐ VA case # assignment
☐ Loan comparison statement
Minimum Required Documentation for Final Underwriting Submission
☐ Title commitment (Required in first submission for Early CD Requests)
(12-month chain) including property tax certification
☐ If subordinate liens exist, a new subordination agreement must be obtained from the subordinate lender
☐ Homeowners' Policy (Required in first submission for Early CD Requests)
☐ HO-6 if applicable
☐ Flood insurance if applicable
☐ Nearest Living Relative Information
Florida VA Mortgage Lenders Refinance Payment History & Seasoning Requirements Include:
☐ The Note date of the refinance loan occurs no earlier than 210 days after the date on which the first payment is due on the
mortgage being refinanced.
☐ Florida VA Mortgage Refinance Applicants (s) must have made a minimum of six (6) months of mortgage payments on the loan being refinanced beginning with
the date on which the first payment is due.
• Documentation confirming that the Florida VA Mortgage Refinance Applicants has made all payments on time during the month due and that 210 days
have passed since the first payment due date is required in all loan files.
☐ Loan must be current at the time of final approval and at time of closing/note date.
Veteran Eligibility & Application Documents
☐ Interest Rate Reduction Refinancing Loan Worksheet (268923)
☐ New VA Loan # _____________________
NOTE: System will only issue a new VA loan # if there is an open
active VA loan.
☐ Power of Attorney w/ Alive and Well Statement
(Deployed & Active Duty Requirement)
☐ Interest Rate Decrease requirements must be met
• An IRRRL FRM must bear a lower interest rate than the loan
being refinanced unless the loan being refinanced is an ARM.
• An IRRRL ARM transaction must bear a lower interest rate
than the loan being refinanced
Brokered Loans: if your company elected a full disclosure
package via Docutech, no need to include with submission
provided borrower(s) acknowledge(s) and e-sign(s) the initial LE
☐ New Servicing Transfer Disclosure
☐ Borrower's Certification and Authorization
☐ Report and Certification of Loan Disbursement
☐ Fair Lending Notice
☐ Right to Receive Appraisal Disclosure
☐ Important Notice Disclosure (2608978) (Assumption)
☐ Anti Coercion Statement (FL)
☐ Any State Specific Disclosures
(i.e. Attorney Preference)
☐ Patriot Act Disclosure
☐ Funding Fee = .500
☐ Borrower Authorization
☐ For full details on any VA IRRRL, refer to our VA IRRRL.
NOTE: Visit homeloans.va.gov/ls.htm to review the VA Lender's
Max Loan Amount Calculation
The maximum mortgage calculation amount may include:
☐ The outstanding principal balance of the existing
VA first lien
☐ The current interest due
☐ Eligible closing costs
☐ VA funding fee
The new loan amount may not include any delinquent interest
from the existing mortgage.
☐ Minimum 550 representative credit score for all borrower(s)
is required (640 min credit score for Manufactured Housing)
NOTE: Refer to the Florida VA Mortgage Lenders product guide for
borrowers with credit scores between 500-549
☐ No AUS findings required
☐ Any open judgments, liens or defaulted student loans must
be paid in full prior to Final Approval
Subject Property Criteria
☐ Investment properties and Second Homes are allowed
Borrower must hold the title but does not have to currently
occupy the property. Investor streamline refinances have a loan
level price adjustment. See rate sheet or Price It for details.
☐ No Maximum LTV/CLTV
☐ No AVM is required
Loan Types And Amounts. VA does not set maximum loan amounts. Provided that a veteran has the full $36,000 of basic entitlement available, VA will issue a minimum of a 25 percent guaranty on any mortgage amount up to the maximum loan limit as set by Freddie Mac’s conforming loan amounts as they are set annually (as long as it is supported by the appraisal). VA’s basic loan types and loan amounts (loan amounts are typical for secondary market requirements) are: ♦ To build or purchase an existing home, multiple-unit property (up to 4 units) or a condominium in a VA accepted project up to $359,650. ♦ Regular (Cash-out) refinance of an existing home loan or refinance of a construction loan and land sale contract, $144,000 ♦ Interest Rate Reduction Refinancing Loan (Streamline) of a VA guaranteed home loan. This loan is to reduce the interest rate of the existing VA loan or convert an existing VA adjustable rate mortgage loan to a fixed rate; VA will give a 25% guaranty on any loan amount up to $359,650. ♦ To purchase and improve a home consecutively. Maximum loan amount will be $359,650 for this type of purchase. ♦ Energy Efficient Improvements, see VA Lenders Handbook, Section 7.03; and Chapter 4 of this training guide for specifics.
Refinance Florida VA Mortgage Program Property Type LTV/CLTV Loan Amount Credit Score DTI AUS Manual Conforming 1-4 Units 100%1 Conforming 620 Per AUS 50%
1. The maximum VA Florida mortgage lenders LTV is the lesser of the amount listed in this table or that which is required to obtain a 25% Guaranty. The maximum VA Florida mortgage lenders LTV allowed may be lower in cases where the veteran does not have full entitlement or where the loan amount exceeds the Florida VA mortgage lenders County Loan Limit. For more information on loan Guaranty limits refer to the VA Loan Limit information webpage and VA Loan Guaranty section of the Program Guidelines.
2. On Refinances, the LTV is determined by dividing the Total Loan amount, including any financed VAFF, by the reasonable value on the NOV. The LTV must not be greater than 100%.
3. Refinances of manufactured homes are limited to the payoff of existing purchase money liens and eligible costs. 4. Loan amounts > $1,000,000 require a satisfactory Collateral Desk Assessment (CDA) appraisal review ordered by Florida VA Mortgage Lenders. 5. Manufactured housing is not eligible for jumbo loan amounts. 6. Manual underwriting is not permitted on manufactured housing.
- Appraisal A full VA appraisal is required on all loans. VA requires appraisers to include Fannie Mae’s Market Conditions Addendum (Form 1004MC). Notice of Value (NOV) to be issued by Florida VA Mortgage Lenders and is valid for 6 months. Loan amount > $1,000,000: o Request a certified appraiser when requesting the appraiser assignment from VA. o Florida VA Mortgage Lenders will order a Collateral Desk Assessment (CDA). The CDA must support the appraised value.
- VA Certificate of Eligibility Certificate of Eligibility (COE) is required.
- Underwriting Method DU or LPA Approval. DU or LPA Refer/Eligible may be manually underwritten if: The loan meets all published loan program guidelines, and The underwriter’s evaluation has determined the loan is an investment quality mortgage, and The loan file contains documentation to support the underwriting decision. Property is not a manufactured home.
- Occupancy Owner occupied primary residences only. Veterans must certify that they intend to live in the home. If the buyer is on active duty, a spouse must certify occupancy. No non-occupying Florida VA Mortgage Refinance Applicants s. Single or married service members deployed from their permanent duty station are considered to be in a temporary-duty status and are able to certify intent to occupy. There is no need to have a spouse, if applicable, certify the occupancy.
- Eligible Florida VA Mortgage Refinance Applicants s A veteran is a person who has served on active duty in the Army, Navy, Air Force, Marines or Coast Guard, and who (except for a service member on active duty) was discharged or released from active duty under conditions other than dishonorable. The following criteria apply: Minimum wartime service is 90 days active duty. Minimum 181 days of continued active duty during peacetime. Members of Reserves of National Guard completing 6 years of service. Un-remarried surviving spouse of an eligible service member who died as a result of service or service-connected injuries.
- Property Type Attached/detached SFRs Attached/detached PUDs VA approved Condos 2-4 Units HUD-owned (REO) properties that meet HUD Minimum Property Requirements (MPRs) are eligible for VA financing. Manufactured housing
- Funding Fee Veteran may be exempt from the VA Funding Fee – specified on current Certificate of Eligibility. Otherwise, VA funding fee can either be paid in full in cash at closing OR financed into the total loan amount (can not be split). Funding fee is higher for subsequent use and chart is also based on the amount of down payment on the loan with reference to Regular Military OR Reservist/National Guard. Funding fee is calculated on your full loan amount including EEM improvements (not just the base). See current Funding Fee chart in the Florida VA Mortgage Lenders VA Program Guidelines.
- Bankruptcy, Foreclosure, Deed in Lieu and Short Sale BK – Chapter 7: Seasoned for minimum of 2 years. BK – Chapter 13: Made at least satisfactory payments for 12 months with an approval letter for purchase from the bankruptcy trustee. Foreclosure/Deed in Lieu/Short Sale: Seasoned for minimum of 2 years.
- Refinance Seasoning The note date of the refinance loan must be on or after the later of: The date that is 210 days after the date on which the first monthly payment was made on the mortgage being refinanced, and The date on which six (6) full monthly payments have been made on the mortgage being refinanced. For loans being refinanced within 1 year from the date of closing, a payment history/ledger from the servicing lender documenting all payments or a credit supplement that clearly defines the timeframe in which all payments were made must be provided.
- Transactions Purchase and Refinance (non-IRRRL) Refinances: All VA Refinances must meet the requirements outlined in VA Circular 26-19-5. This is effective for all non-IRRRL refinances with application dates on or after February 15, 2019. o Type I Cash-Out Refinance: The loan amount, including the VA Funding Fee, does not exceed the payoff amount of the loan being refinanced. o Type II Cash-Out Refinance: The loan amount, including the VA Funding Fee, exceeds the payoff amount of the loan being refinanced. For all refinance loans, the LTV is determined by dividing the total loan amount, including any financed VAFF, by the reasonable value per the NOV. The maximum LTV is 100%. VA cash-out loans are not allowed in Texas. Cash-out is not allowed on manufactured housing. Refinances are limited to the payoff of purchase money liens and eligible costs. Refinance Net Tangible Benefit (NTB): All refinances (Type I and Type II) must pass a NTB test and a NTB disclosure must be provided to the Veteran no later than the third business day after receiving the Veteran’s loan application, and again at loan closing. Type I Refinance NTB – One of the following NTB must exist for all Type I Refinances: Fixed Rate to Fixed Rate refinance requires an interest rate reduction of at least .5% Fixed Rate to ARM refinance requires an interest rate reduction of at least 2% Type II Refinance NTB - One of the following NTB must exist for all Type II Refinances: The new loan eliminates monthly mortgage insurance, whether public or private, or monthly guaranty insurance; The term of the new loan is shorter than the term of the loan being refinanced; The interest rate on the new loan is lower than the interest rate on the loan being refinanced; o Fixed Rate to Fixed Rate refinance requires an interest rate reduction of at least .5% o Fixed Rate to ARM refinance requires an interest rate reduction of at least 2% The monthly principal and interest payment on the new loan is lower than the monthly principal and interest payment on the loan being refinanced; The new loan results in an increase in the Florida VA Mortgage Refinance Applicants ’s monthly residual income; The new loan refinances an interim loan to construct, alter, or repair the home; The new loan amount is equal to or less than 90 percent of the reasonable value of the home, or; The new loan refinances an adjustable rate loan to a fixed rate loan.
- Assets Source must be documented for any down payment and closing costs the Florida VA Mortgage Refinance Applicants is paying for. All DAPS must be VA approved. Asset Verification: The veteran or spouse must have sufficient cash to cover assets that are needed to close and those funds must be verified. In addition, verify any liquid assets that may have a bearing on the overall credit analysis. The most recent bank statement(s) must be provided to verify assets; a written VOD cannot be used as standalone documentation for verifying assets, regardless of AUS findings.
- Reserves 1-Unit: No reserves are required unless Florida VA Mortgage Refinance Applicants is retaining their prior residence 2-4 Units & rental income IS NOT USED to qualify: No reserves are required. 2-4 Units & rental income IS USED to qualify: 6 months PITIA reserves required. Additional rental properties owned: 3 months PITIA required for each additional property.
- Eligible Fees Fees and Charges: VA policy has evolved around the objective of helping the veteran to use his/her home loan benefit; therefore, VA regulations limit the fees that the veteran can pay to obtain a loan. For a list of eligible fees and charges refer to Florida VA Mortgage Lenders’s Veteran Florida VA Mortgage Refinance Applicants Paid Fees & Charges Policy. Fee Recoupment on Type I Refinances: For all Type I Refinances made to refinance an existing VA-guaranteed loan, the recoupment period of all fees (excluding VAFF), closing costs, expenses (other than taxes, escrow, insurance, and like assessments), and incurred costs must not exceed 36 months from the date of loan closing. This requirement does not apply to Type II Refinances. Recoupment Calculation: Divide all fees, closing costs, expenses, and incurred costs (excluding taxes, escrow, insurance, and like assessments), by the reduction of the monthly principal and interest payment as a result of the refinance. If the loan being refinanced has been modified, the principal and interest reduction must be computed/compared to the modified principal and interest monthly payment. VA allowable fees offset by lender credits and/or premium pricing may be excluded from the recoupment calculation. Discount Points: Discount points > 1%: Maximum refinance LTV 90% Discount points <= 1%: Maximum refinance LTV 100% Note: If the veteran was charged an ineligible fee(s), the fee must be refunded and the loan file must contain adequate documentation that the fee was refunded to the veteran.
FLORIDA VA MORTGAGE REFINACE -IRRRL Facts
- No VA appraisal or credit underwriting package is required when applying for a Florida VA mortgage refinance aka IRRRL.
- A VA mortgage refinance aka IRRRL may be done with "no money out of pocket" by including all costs in the new VA mortgage refinance or by making the new loan at an interest rate high enough to enable the Florida mortgage lender to pay the costs.
- When Florida VA refinancing from an existing VA ARM loan to a fixed rate loan, the interest rate may increase.
- No Florida mortgage lender is required to give you an IRRRL, however, any VA Florida mortgage lender of your choosing may process your Florida VA refinance mortgage application for an IRRRL.
- Veterans are strongly urged to contact VA Florida mortgage lenders.
- You may NOT receive any cash from the VA mortgage refinance proceeds.
VA MORTGAGE REFINANCE ELIGABILITY
A VA mortgage refinance aka IRRRL can only be made to refinance a Florida VA mortgage on which you have already used your VA loan eligibility. It must be a VA to VAF Florida mortgage refinance, and it will reuse the entitlement you originally used.
ADDITIONAL FLORIDA VA MORTGAGE INFORMATION:
- A Certificate of Eligibility (COE) is not required. If you have your Certificate of Eligibility, take it to the Florida VA mortgage lender to show the prior use of your Florida VA mortgage entitlement.
- No Florida VA mortgage other than the existing Florida VA mortgage may be paid from the proceeds of an IRRRL. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA Florida VA mortgage will be a first mortgage.
- You may have used your entitlement by obtaining a VA Florida mortgage when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the Florida VA mortgage.
- The occupancy requirement for an IRRRL is different from other Florida VA mortgage loans. For an IRRRL you need only certify that you previously occupied the Florida home.
VA MORTGAGE APPLICATION PROCESS
A new VA Certificate of Eligibility (COE) is not required. You may take your Certificate of Eligibility to show the prior use of your entitlement or your VA Florida mortgage lender may use our e-mail confirmation procedure in lieu of your VA mortgage certificate of eligibility.
FLORIDA VA MORTGAGE LIMITS
The VA mortgage program does not set a cap on how much you can borrow to finance your Florida home. However, there are VA mortgage limits on the amount of liability VA can assume, which usually affects the amount of the Florida VA mortgage money an institution will lend you. The VA loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment. These VA loan limits vary by Florida county, since the value of a Florida home depends in part on its location.
The basic entitlement available to each eligible Veteran is $36,000. Lenders will generally loan up to four times a Veteran's available entitlement without a down payment, provided the Veteran is income and credit qualified and the property appraises for the asking price. See Florida VA loan Limits for more information about the limits in your county.
VA MORTGAGE FUNDING FEE
Generally, all Veterans using the VA mortgage guaranty benefit must pay a VA funding fee. This reduces the VA mortgage loan's cost to Florida taxpayers considering that a VA mortgage requires no down payment and has no (PMI) monthly Florida VA mortgage insurance. The VA funding fee is a percentage of the VA mortgage loan amount which varies based on the type of VA loan and your military category, if you are a first-time or subsequent VA mortgage loan user, and whether you make a down payment. You have the option to finance the Florida VA mortgage funding fee or pay it in cash, but the funding fee must be paid at closing time. Florida VA mortgage applicants do not have to pay the fee if:
- Surviving spouse of a Florida Veteran who died in service or from a service-connected disability, OR
- Veteran receiving VA compensation for a service-connected disability,
- Veteran who would be entitled to receive compensation for a service-connected disability if you did not receive retirement or active duty pay.
The VA funding fee for second time VA users who do not make a down payment is slightly higher. Also, National Guard and Reserve Veterans pay a slightly higher funding fee percentage. See Loan Fees for more information about Florida VA mortgage loan costs. Some Florida VA mortgage lenders offer IRRRLs as an opportunity to reduce the term of your loan from 30 years to 15 years. While this can save you money in interest over the life of the Florida VA mortgage loan, you may see a increase in your monthly VA mortgage payment if the reduction in the interest rate is not at least one percent (two percent is better). It could be a bigger VA mortgage payment increase than you can afford.