By Steven Hyde, Founder, Hyde Funding · NMLS #391380. Reviewed 2026-10-19. Hyde Funding is a mortgage lender headquartered in San Diego, lending nationwide since 2015, and is not affiliated with the U.S. Department of Veterans Affairs.
Short answer: A VA IRRRL (Interest Rate Reduction Refinance Loan) replaces an existing VA-backed loan with a new VA loan, usually to get a lower rate or to move from an adjustable to a fixed rate. The VA funding fee is 0.5%, and closing costs can be included in the new loan.
Per VA.gov, all of these must be true: you already have a VA-backed home loan, the IRRRL refinances that VA loan, and you can certify that you live in or used to live in the home. A second-mortgage holder must agree to subordinate.
The VA funding fee on an IRRRL is 0.5% of the loan amount (waived for exempt veterans, such as those receiving VA disability compensation). Other closing costs vary by lender and can be rolled into the new loan.
Federal law (38 U.S.C. § 3709) sets three tests. Seasoning: at least six consecutive monthly payments made, and 210 days past the first payment due date of the loan being refinanced. Recoupment: fees and closing costs (excluding taxes, escrow, and the VA funding fee) must be recouped through lower monthly payments within 36 months. Net tangible benefit: for a fixed-to-fixed refinance, the new rate must be at least 0.50 percentage points lower.
Bring your original COE if you have it (or your lender pulls it electronically), your current mortgage statement, and homeowners insurance. Call (858) 775-1005 for a no-cost break-even review.
0.5% of the loan amount, unless you are exempt (for example, if you receive VA compensation for a service-connected disability).
Yes. VA requires that you certify you currently live in or previously lived in the home, so a former residence (for example, after a PCS move) can qualify.
No. An IRRRL is for lowering the rate or stabilizing the payment. To take equity out, use a VA cash-out refinance.
No. An IRRRL only refinances an existing VA-backed loan. To move a non-VA loan into a VA loan, use a VA cash-out refinance.
Talk to Steven: (858) 775-1005 · Free VA consultation · Apply now
Steven Hyde, NMLS #391380. Equal Housing Opportunity. Hyde Funding is not a government agency and is not affiliated with the VA. This is general information, not a loan commitment; terms depend on credit, income, property, and lender approval.