VA Mortgage Loan
VA home loan programs make home ownership easier for “first time” home buyers.
Credit underwriting is much less restrictive. Qualifying income ratios are higher than any other loan programs, which means that a veteran can usually obtain a higher loan amount. VA underwriting is more understanding of individuals
and families who have had to file bankruptcy due to involuntary circumstances.
If you are an existing homeowner considering a refinance, the VA program allows you to go as high as 90% loan to value.
Speak with our Veteran Home Loans representative. We will have you complete VA form 26-1880, which is called Request for Determination of Eligibility and Available Loan Guaranty Entitlement. In addition, the veteran will need one of the following supporting documents:
Closing Costs
The veteran buyer cannot pay “lender fees.” The veteran can, and will be obligated to pay all other closing costs.HOWEVER, the veteran’s buyer’s agent can, as part of contract negotiation, request the “seller” to pay all closing costs including pre-paid costs and reserves.
Down Payment
No down payment is required if Veteran has full entitlement. You will be required to put down an earnest money deposit of $500/$1,000 on signing a contract. This can be refunded at closing or offset against closing costs. This is dependent upon contract terms.
Eligible Properties
Single Family, Veteran-occupied 2-4 units, PUD’s & Condo’s (approved by FHA or VA) proposed or existing construction. Manufactured homes on fixed permanent foundation.
Entitlement Restoration
The VA loan must be paid in full and the veteran must have disposed of the property securing the loan. ‘OR’ Loan must have been assumed by another eligible veteran who assumed the liability on the loan and substituted entitlement.
Funding Fee
The VA charges a fee for using your benefits. These are as follows:
Note: The VA Funding Fee can be paid in cash, or it can be added to the loan amount for purchase transactions and all refinances.
Any Veteran or Reservist who has been classified as having a 10% or greater service related disability DOES NOT HAVE TO PAY THE VA FUNDING FEE — EVER.
Guarantee Amount
VA will guarantee up to 50 percent of a home loan up to $45,000. For loans between $45,000 and $144,000, the minimum guaranty amount is $22,500, with a maximum guaranty, of up to 40 percent of the loan up to $36,000, subject to the amount of entitlement a veteran has available. For loans of more than $144,000 made for the purchase or construction of a home or to purchase a residential unit in a condominium or to refinance an existing VA guaranteed loan for interest rate reduction, the maximum guaranty is 25 percent up to $50,750.
You may generally borrow up to the reasonable value of the property or the purchase price, whichever is less, plus the funding fee, if required. For certain refinancing loans, the maximum loan is limited to 90 percent of the value of the property, plus the funding fee, if required. To determine the reasonable value, VA requires an appraisal of the property.
Mortgage Programs
VA (Veterans Administration) currently insures three types of loan programs. They are:
30 Year Fixed Rate
15 Year Fixed Rate
2/1 Fixed Rate Buy-Down
Any of these programs may be used for both purchasing real estate or refinancing your existing VA loan.
What Can a VA Home Loan be Used For?
To buy a home, including townhouse or condominium unit in a VA-approved project.
To simultaneously purchase and improve a home.
To improve a home by installing energy-related features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA. These features may be added with the purchase of an existing dwelling or by refinancing a home owned and occupied by the veteran. A loan can be increased up to $3,000 based on documented costs or up to $6,000 if the increase in the mortgage payment is offset by the expected reduction in utility costs. A refinancing loan may not exceed 90 percent of the appraised value plus the costs of the improvements. Check with one of our Loan Agents or VA for details.
To refinance an existing home loan up to 90 percent of the VA-established reasonable value or to refinance an existing VA loan to reduce the interest rate.
