What are the VA cash-out refinance and IRRRL requirements?

An IRRRL refinances a VA loan into a new VA loan, generally at a lower rate and payment with no cash out; a VA cash-out refinance can pay off any lien and, as a Type II loan, let the Veteran take equity out. IRRRLs generally need no appraisal or credit underwriting; the Handbook's IRRRL section sets no numeric seasoning or recoupment limit, while The Loan Store's VA IRRRL guide applies 210 days with six payments and a 36-month recoupment limit. Cash-out refinances need full underwriting, at least one net tangible benefit and a loan of no more than 100 percent of reasonable value; a refinanced VA loan must be seasoned 210 days with six payments, and Type I VA-to-VA loans must recoup fees within 36 months and, when a fixed-rate loan is refinanced, lower the rate.

VA IRRRL (Interest Rate Reduction Refinancing Loan)

• An IRRRL refinances an existing VA-guaranteed loan, generally at a lower rate and payment. No appraisal is generally required; credit underwriting is required only if the old loan is 30 days or more past due or PITI will rise 20 percent or more. VA Pamphlet 26-7, 6 Topic 1
• The rate must be lower unless an ARM is refinanced; the principal and interest payment must be lower unless an ARM is refinanced, the term is shortened or energy efficiency improvements are included. If PITI rises 20 percent or more, the lender must certify that the Veteran qualifies. VA Pamphlet 26-7, 6 Topic 1
• The Veteran (or an active servicemember's spouse) certifies prior occupancy. No cash to the borrower, except reimbursement of up to $6,000 for energy efficiency improvements completed within the 90 days before closing. VA Pamphlet 26-7, 6 Topic 1
• Maximum loan: existing VA loan balance plus allowable fees (up to two discount points), energy efficiency improvements and the funding fee. Maximum term: the old term plus 10 years, up to 30 years and 32 days. VA Pamphlet 26-7, 6 Topic 1
• The Veteran signs a statement showing how long recouping all closing costs will take; the Handbook's stacking orders require IRRRL seasoning evidence (six consecutive payments) and NTB and recoupment disclosures within three business days of application and at closing. VA Pamphlet 26-7, 6 Topic 1 VA Pamphlet 26-7, Appendix B

VA cash-out refinance (Type I and Type II)

• Type I: the new loan amount, including the funding fee, does not exceed the payoff of the loan being refinanced. Type II: it exceeds the payoff, and the Veteran may remove equity. VA Pamphlet 26-7, 6 Topic 3
• The Veteran must own the property before or at closing, with no required time on title; the loan may not exceed 100 percent of the reasonable value as determined by VA. VA Pamphlet 26-7, 6 Topic 3
• Full credit underwriting is required, and every cash-out loan must provide at least one net tangible benefit, such as a lower rate or an LTV of 90 percent or less. VA Pamphlet 26-7, 6 Topic 3
• VA-to-VA seasoning: for Type I, 210 days or more from the old loan's first payment due date to the new note date, plus six consecutive monthly payments; for Type II, 210 days from the first payment made and six payments, not necessarily consecutive. VA Pamphlet 26-7, 6 Topic 3
• Type I VA-to-VA only: the fee recoupment period must not exceed 36 months, and a fixed-to-fixed refinance must lower the rate by at least 0.5 percent (2 percent for fixed-to-ARM). VA Pamphlet 26-7, 6 Topic 3
• The lender must give the Veteran an initial loan comparison disclosure within three (3) business days of application and a final one at closing. VA Pamphlet 26-7, 6 Topic 3

The Loan Store (VA IRRRL lender example)

• The Loan Store's VA IRRRL guide requires the new note date to be on or after the later of 210 days after the old loan's first payment due date and six full monthly payments, citing Ginnie Mae and VA seasoning requirements. The Loan Store VA IRRRL 706
• The same guide applies its recoupment standard to all IRRRLs, including ARM refinances and term reductions, with a maximum recoupment period of 36 months from the note date. The Loan Store VA IRRRL 708
• Its VA IRRRL at-a-glance states that every IRRRL must meet a net tangible benefit test; for fixed-to-fixed, "a minimum decrease in the interest rate of .50%." The Loan Store VA IRRRL AAG

The IRRRL section of the VA Lender's Handbook in Strata states no numeric seasoning period, fee-recoupment limit or minimum rate reduction for IRRRLs; The Loan Store's figures are one lender's guide, so confirm current VA requirements.

Sources

• VA Lender's Handbook (VA Pamphlet 26-7), August 12, 2026 version: Chapter 6, Topic 1.a What is an IRRRL? (PDF p. 148); Chapter 6, Topic 1.o Credit Underwriting (PDF p. 155); Chapter 6, Topic 1.b Interest Rate Decrease Requirement (PDF p. 148); Chapter 6, Topic 1.c Payment Decrease/Increase Requirements (PDF p. 148, 149); Chapter 6, Topic 1.m Occupancy (PDF p. 155); Chapter 6, Topic 1.f When Can the Borrower Receive Cash at Closing? (PDF p. 150); Chapter 6, Topic 1.g Maximum Loan (PDF p. 151); Chapter 6, Topic 1.i Maximum Loan Term (PDF p. 153); Chapter 6, Topic 1.d Veteran’s Statement and Lender’s Certification (PDF p. 149); Appendix B, Topic 1 Manual Guaranty Requests (Table 1) (PDF p. 442, 443); Chapter 6, Topic 3.b What is a Type I Cash-Out Refinance Loan? (PDF p. 161); Chapter 6, Topic 3.c What is a Type II Cash-Out Refinance Loan? (PDF p. 161); Chapter 6, Topic 3.e Ownership Requirement (PDF p. 162); Chapter 6, Topic 3.g Maximum Loan Amount (PDF p. 162); Chapter 6, Topic 3.j Underwriting (PDF p. 163); Chapter 6, Topic 3.o Net Tangible Benefit (NTB) Requirement (PDF p. 166); Chapter 6, Topic 3.p Loan Seasoning Requirement (VA-to-VA only) (PDF p. 167, 168); Chapter 6, Topic 3.m Fee Recoupment Requirement (VA-to-VA, Type I only) (PDF p. 164); Chapter 6, Topic 3.n Requirement to Reduce the Interest Rate (VA-to-VA, Type I only) (PDF p. 165); Chapter 6, Topic 3.q Loan Comparison Disclosure Requirement (PDF p. 169)
• The Loan Store VA IRRRL Guidelines, November 26, 2025 version: 706. IRRRL Refinance, Seasoning Requirements (p. 16); 708. Fee Recoupment (p. 17)
• The Loan Store VA IRRRL At-A-Glance, November 25, 2025 version: VA IRRRL Program Summary, Net Tangible Benefit Verification (PDF p. 2)

Agency guides set the baseline; individual lenders can add stricter overlays. Sources are the guideline versions in Zeitro Strata as of October 29, 2026.