VA Home Loan
With Veteran’s Day upon us, I thought it would be a perfect opportunity to review the VA Home Loan Program.
The VA home loan is available to service members, veterans, and some surviving spouses of the United States. It may be used for both purchases and refinances, with the basic intention to help veterans purchase properties with no down payment or refinance up to 100% without having to obtain Mortgage Insurance (MI). Interest rates are often lower than traditional financing rates.
As with any loan program, there are certain guidelines that must be followed to in order to utilize this program. The following is a brief outline of the program.
Borrower Eligibility: A veteran is a person who has served on active duty in the Army, Navy, Air Force, Marines or Coast Guard, and who (except for a service member on active duty) was discharged or released from active duty under conditions other than dishonorable. The un-remarried surviving spouse of an eligible service member who died as a result of service or service-connected injuries may also be eligible.
Property and Occupancy: Primary residences only. Veterans purchasing a primary residence, refinancing or improving their home must certify that they intend to live in the home. Eligible properties include attached/detached SFRs, attached /detached PUDs, and VA-approved condos.
Closing Costs: VA limits the amount of closing costs a veteran can pay. These costs are referred to as “non-allowables” and may include, but are not limited to: loan processing fee, escrow fees, doc prep fees, notary fees, tax service fees, termite and pest inspection fees. These costs may be paid by the seller or through “rebate” pricing. A funding fee is to be paid to VA unless the Veteran is exempt from such a fee, which will be indicated on the Certificate of Eligibility. The funding fee may be paid for in cash, however it is typically included in the loan amount.
VA Appraisals: No loan can be guaranteed by VA without first being appraised by a VA-assigned appraiser. This VA appraisal estimates the value of the property. A thorough inspection of the property may help minimize any problems that could arise after loan closing. In an existing home, particular attention should be given to plumbing, heating, electrical, and roofing components.
Contact us for more information on the VA Home Loan Program.