f. When Can the Borrower Receive Cash at Closing? (continued)

While VA’s policy is not to set a “ceiling” or a specific dollar limitation on cash refunds resulting from adjustments at closing, if a situation involves a borrower receiving more than $500, consult VA as to its acceptability.  Lenders and VA personnel should exercise common sense when assessing such situations and draw from basic program information to know the difference between an equity withdrawal and cash from unforeseen circumstances.

g. Maximum Loan

Always use VA Form 26-8923, IRRRL Worksheet, to calculate the maximum loan amount.  Basically, it is:

The existing VA loan balance:

·  including any late payments* and late charges, plus

·  allowable fees and charges (Includes up to 2 discount points), plus

·  the cost of any energy efficiency improvements, plus

·  the VA funding fee.

*There should be no cases in which an IRRRL closed on the automatic basis includes delinquent payments in the loan amount.  All such loans must be submitted for prior approval.

Note:  There is no maximum dollar amount for VA loans.  Since an IRRRL rolls the above items into the new loan, and VA guarantees at least 25% of the loan amount (without regard to the veteran’s entitlement), the new loan amount may be more than the limits established by the secondary market.  It is the lender’s responsibility to ensure it has a marketable loan.