Any veteran home owner who has attempted to refinance his or her current VA loan with a VA streamline refinance sometime in the past one to two years is very aware of how difficult it has become.

When the VA streamline refinance was originally rolled out to veterans it was the easiest loan to qualify for. Just a few years ago your FICO or credit score has no bearing on your ability to streamline refinance into a lower interest rate. The value of your home or its appraisal also had no bearing on your ability to qualify for the VA loans available. Banks and mortgage companies didn’t care who your employer was, how much money you made, or even how much money you’re saving each month.

In the wake of the recent housing and financial meltdown, the VA streamline refinance is no longer as simple to qualify for as it once was. Here is a list of changes that VA mortgage companies and VA lender’s have made to the VA streamline program:

1. The Veteran’s FICO or credit rating now matters.
2. You must be employed.
3. Home value is necessary in most cases.

It is more common than ever to see Veteran’s credit scores suffering — and as a result, any Veterans are not able to refinance with the VA streamline program.

With the highest unemployment rates in decades, many Veterans are unemployed and hence, refinancing is not an option.

And finally — both in Arizona and in other parts of the country, home values have dropped to the point where homes are now often worth less than what is owed on the mortgage.

And until these issues are addressed – I see these issues continuing to keep many VA borrowers from refinancing.