VA IRRRL Policy
Fairway has confirmed with VA that the recoupment cost requirement must be met on ALL VA IRRRLs in order to be eligible for a VA IRRRL loan. There is no exception for this requirement under any circumstances. Whenever the recoupment costs calculation evidences that a Borrower cannot recoup the costs of the new IRRRL within 36 months, the Borrower becomes ineligible for a VA IRRRL and must look at completing a regular full documentation refinance loan.
Therefore, effective with applications dated on and after 7/15/19, Fairway will require that all VA IRRRLs meet the fee recoupment and payment requirement as stated below.
- Fees MUST be recouped within 36 months or less on ALL VA IRRRLs.
- The principal and interest payment MUST decrease on ALL VA IRRRLs.
There are no exceptions to these requirements.
Fairway requires the VA IRRRL Cost Recoupment Worksheet be included with all VA IRRRL loan submissions.
As a reminder:
- VA in Circular 26-19-17, now requires that the Certificate of Eligibility be included with all VA IRRRL loan submissions.
- 210 days must pass from the date the first payment was MADE (and 6 full monthly payments have been made) prior to closing the new loan.
Please contact your Regional Account Manager should you have any questions related to this Client Announcement.