The VA Streamline Refinance, also known as the Interest Rate Reduction Refinance Loan [ IRRRL ], is a program specifically designed for VA borrowers who want to lower their monthly mortgage payment by refinancing to a lower interest rate. This program is called a “streamline” refinance because it often requires less documentation and has more lenient credit and income requirements than a traditional refinance.
The VA Cash-Out Refinance, on the other hand, allows VA borrowers to access the equity in their home and use the proceeds for any purpose, such as paying off debt, making home improvements, or investing in other assets. Unlike the VA Streamline Refinance, the VA Cash-Out Refinance does require a full credit and income review, and the borrower must have enough equity in their home to qualify.