2019 VA Refinance Rule Changes

This set of questions came in from a veteran about recent rule changes for VA Interest Rate Reduction Loans:

1- What is the "36 month rule"?
2- Do you have to have a year in the old loan to refinance again?
3- Is there a funding fee for refinanced VA loans?

There are two types of refinance loan for the VA:  

The VA Interest Rate Reduction Loan (IRRL) permits the veteran to refinance the loan balance with no cash returned to the veteran.  It has a funding fee of .5% of the loan amount unless the veteran has a VA-rated disability.  It does not require an appraisal.  A veteran is eligible refinance his/her loan after he/she makes six monthly payments.  If the lender is not paying the veteran's closing costs, the closing costs paid or financed (including the funding fee) must be "recouped" within 36 months.  In other words, if the veteran is paying or financing $3600 in closing costs (including the funding fee), the motnhly savings must be $100 or greater.

A full VA refinance loan permits a veteran to "cash out" up to 100% of the appraised value.  It has a funding fee of 3.3% of the loan amount unless the veteran has a VA-rated disability,  It does require an appraisal from a VA-assigned appraiser.  A veteran is eligible refinance his/her loan after he/she makes six monthly payments.