Understanding VA loan refinancing options involves two main paths: the streamlined IRRRL for rate reduction, and the cash-out refinance for equity access or converting non-VA loans. IRRRL requires an existing VA loan, on-time payments, and a tangible benefit, with relaxed credit checks. Cash-out refinancing demands a 620+ credit score, appraisal, and occupancy, functioning like a new mortgage. Equity is crucial for cash-out, not IRRRL. Funding fees apply, and timelines vary.
What They Don’t Tell You About VA Loan Refinancing
Here’s what I see all the time:
- Someone wants a better rate, but they think their credit isn’t strong enough.
- Another person assumes they need a TON of equity to refi.
- The couple down the street had a VA loan but didn’t realize they had multiple refinance options.
Let’s get this straight first — there are two primary types of VA refinance programs available:
- VA IRRRL (Interest Rate Reduction Refinance Loan) – Streamlined, less paperwork.
- VA Cash-Out Refinance – Pull out equity, or refi a non-VA loan into a VA loan.
Each one has different VA refinance eligibility requirements. So which one’s your play? Depends on what you’re trying to do.
VA IRRRL – Streamlined Refinance Requirements
If you’ve already got a VA loan and your goal is to lower your rate or switch from an ARM (adjustable-rate mortgage) to a fixed rate, this is for you.
Here’s what you need (it’s actually not as wild as you think):
- Must have a current VA loan – You can’t use IRRRL unless you’re refinancing a VA-backed mortgage.
- On-time payments – You need to show you’ve made the last 6 payments (not late, by the way).
- Nets tangible benefit – Fancy talk for “This should help you save money.” A lower rate or a switch to a less risky loan qualifies.
- Credit sometimes pulled, sometimes not – Depends on the lender. But generally, credit score requirements are way more relaxed on IRRRLs.
- Occupancy rules lighten up – You don’t have to live in the home anymore. You just need to have used it as your primary back when you got the original VA loan.
That’s it. No appraisal. No income verification. Minimal red tape. Check out this VA vs conventional loan comparison if you want to see more detail on how the two stack up when refinancing.
Credit Requirements for VA Loan Refinancing
This one gets hyped up like you need an 800 score to refi. Not true.
If you’re going through the VA IRRRL, the VA doesn’t even set a minimum credit score.
Lenders usually want something around 620 or higher, but some allow lower depending on your full profile. So don’t self-disqualify.
Want the truth? Here’s what lenders really care about:
- You’ve got decent payment history.
- You’re not overloaded with debt compared to your income.
- You’ve got some consistency in income going on (even self-employed folks can qualify).
I’ve seen folks with scores in the 500s still get approved. Why? Because VA loans are government backed — less risk for lenders.
VA Cash-Out Refinance Requirements
This type of refi isn’t just for pulling equity — you can also use it to turn a non-VA loan into a VA loan.
Let’s break down real requirements. Because this one’s stricter than the IRRRL.
- Credit score? Lenders typically want at least a 620, sometimes more depending on how much cash you’re pulling out.
- Appraisal? Yes, required. The lender needs to know how much equity you’ve got in the home.
- Occupancy? You HAVE to live in the house as your primary residence.
- Income & employment? Yep, full doc loan, so you’re showing W-2s, tax returns, etc.
- Max loan-to-value (LTV)? Usually 90% of the home’s appraised value. Some borrowers can go higher, but it’s case by case.
Here’s a simple way to think about it: Cash-out refi is more like a traditional new mortgage. It just taps into your home equity with better VA loan perks — like no PMI.
And yeah, closing costs are a thing. You can include them in the loan, but they’re not waived.
What About Equity? Do You Even Need It?
This is where folks get tripped up. If you’re using the VA IRRRL, equity doesn’t even matter. No appraisal. No equity calculation. That’s part of what makes it a “streamlined” refinance. With cash-out refinancing? Totally different. Your home needs to be worth more than what you owe — that’s your equity.
Here’s a quick example:
- Your home’s appraised for $400,000.
- You owe $280,000 on your mortgage.
- You’ve got $120,000 in equity.
- At 90% LTV, you could borrow up to $360,000 — covering your old loan + up to $80,000 in cash-out.
That’s power. If you’ve got equity stacked up and you need to clear debts, make upgrades, or cover life stuff — this is where it helps.
VA Funding Fee – Read This Before You Close
Quick heads-up: Unless you’re exempt, you’ll pay a VA funding fee.
Type |
VA Funding Fee |
|---|---|
| IRRRL (Streamline) | 0.5% of loan amount |
| Cash-Out – First Time Use | 2.15% |
| Cash-Out – Subsequent Use | 3.3% |
Some folks are exempt (like those with VA-rated disability). If that’s you, check your Certificate of Eligibility or talk to your lender.
Either way, most people roll this fee into the loan. Just know it’s there.
Let’s Talk Timelines – When Can You Refi a VA Loan?
If you’re planning to do a VA IRRRL, you’ll need to wait at least:
- 210 days after your first payment
- OR 6 monthly payments, whichever is longer
For cash-out refinancing? Totally different timeline. Lenders will typically want 6–12 months of on-time payments, depending on your scenario. This ain’t a jump-right-in scenario. Don’t get hyped up watching YouTube videos telling you to refinance.