The VA streamline program has been around for years. And for years, one of the benefits of the VA streamline program is that no appraisal has been required.
Up until now.
In the ever-changing world that has become the mortgage industry, some lenders are now requiring that borrowers who want to do a VA streamline refinance now get an appraisal done on their home. Some lenders are requiring a full VA appraisal, some are only requiring a drive-by appraisal... but the important thing is that it is only some lenders who are requiring an appraisal.
You can reasonably expect that if at least some lenders are now requiring an appraisal to be done on a VA streamline, others will be sure to follow in the not-too-distant-future.
Which means if you are currently in a VA Loan and you owe more than your home is worth (think parts of California, Arizona, Nevada, Florida, etc.) you may suddenly become ineligible for the VA streamline program.
As an example, an announcement by Wells Fargo to all correspondent lenders went out recently and said:
“in an effort to mitigate the risk of declining home values on VA IRRRL transactions on May 18th will require the seller to obtain and deliver a conventional appraisal to Wells Fargo. Please Note: VA has indicated this appraisal should not be submitted to the VA with the guaranty package.”
NOTE: It is not FHA/VA who are starting to require appraisals on VA streamlines, it is specific lenders. This issue is similar to the minimum credit score requirement that many lenders are requiring -- it isn't required in order to get the loan insured, just another lender requirement.
And it makes it more difficult to get a loan if you are a borrower.