even improve a home by adding new features like solar power to make the home more energy efficient. • Interest Rate Reduction Refinance Loan (IRRRL) - n (IRRRL) -An IRRRL is available to veterans who have an existing VA- backed home loan that they want to refinance under better terms to reduce monthly payments or make them more stable by switching from a variable or adjustable interest rate to a fixed one. Also known as a VA streamline refinance, these typically require less paperwork than a traditional refinance, and don’t require a new home appraisal. These loans do require a one-time .5% funding fee plus any closing costs the lender requires, so be sure it makes financial sense to refinance your existing VA loan. • Cash-out refinance loan - A Cash-out refinance loan allows a veteran to replace their existing home loan with a new one with different terms, take cash out of their home equity, or refinance a non-VA loan and replace it with a VA-backed loan. Like all other VA home loans, the home must be the primary residence of the veteran.
How to Buy a Home with a VA-Backed Loan
To buy a home with a VA-backed home loan, first you will need to apply for a Certificate of Eligibility (COE). This tells private lenders that you have VA home loan eligibility and entitlement. This is the first step in getting a VA-backed loan or Native American Direct Loan. You will need to provide documentation of your service. For veterans and current or former National Guard or Reserve members, you will need a copy of your discharge papers, known as your DD214 for activated members, or, for those who were
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