k. Who Can an IRRRL be Made to? (continued)

In the case of the veteran/nonveteran joint loan (Case 10)

·  The veteran “sold out” to the nonveteran co-obligor after the loan was made and

·  The veteran no longer has any ownership interest in the property.

Thus, an IRRRL is not possible.

Parties Obligated on Old VA Loan

Parties to be Obligated on new IRRRL

Is IRRRL Possible?

1

Unmarried veteran

Veteran and new spouse

Yes

2

Veteran and spouse

Divorced veteran alone

Yes

3

Veteran and spouse

Veteran and different spouse

Yes

4

Veteran alone

Different veteran who has substituted entitlement

Yes

5

Veteran and spouse

Spouse alone (veteran died)

Yes

6

Veteran and nonveteran joint loan obligors

Veteran alone

Yes

7

Veteran and spouse

Divorced spouse alone

No

8

Unmarried veteran

Spouse alone (veteran died)

No

9

Veteran and spouse

Different spouse alone (veteran died)

No

10

Veteran and nonveteran joint loan obligors

Nonveteran alone

No

l. Underwriting of IRRRLs When Obligors Have Changed

Although VA does not require any credit/income documentation or

re-underwriting of IRRRLs when there has been a change in obligors, lenders may want to consider the following:

·  Check mortgage payment record in lieu of obtaining a full credit report, unless required by investor.

·  For death or divorce cases, obtain a statement from the obligor(s) on the ability to make payments on the new loan without the co-obligor’s income.

Obtain a statement about the addition of a different spouse, change in number of dependents, such as, as applicable.