Additionally, there is another “financial windfall” for the borrower on an IRRRL, which seems to replace the desire for the benefits of an EEM IRRRL. All VA loans require an escrow impound account, budgeted for property tax and insurance payments. The refinance and pay off of that loan can easily produce a refund in that impound account paid directly to the homeowner/borrower, which is perceived as a big benefit! This amount can be substantial for a homeowner with significant annual property taxes, especially when the transaction closes right before taxes are to be paid, when the account is at its highest levels. Add to that the ability to finance sixty days of interest into ANY refinance, and thereby bypass two mortgage payments, and you can now accumulate a tidy sum into your checking account when these two sums of money are added together! In comparison, when the $6000 is considered as an EEM vs. the escrow account refund paid directly to you, plus bypassing two loan payments on the typical IRRRL, many prospective applicants will just ditch the idea of the EEM.
However, for some, especially when the $6000 is a relatively large sum, energy efficiency is well-worth the extra effort. Some of these home improvement energy technologies are pretty cool. If you have work to do on your home, why not go ahead and install some of the latest tech toys and state-of-the-art materials to create a more comfortable, “green” home? Energy efficiency devices and materials that are acceptable under these mortgage guidelines include, but are not limited to: