What Are VA Home Loans?
VA Guaranteed Home Loans: Listed below are what VA guarantee home loans can be used for: • buy a home, either existing or pre-construction, as a primary residence • refinance an existing loan
VA Guaranteed Home Loan Benefits:
• Equal opportunity for all qualified Veterans to obtain a VA loan • Reusable • No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property) • No mortgage insurance • One time VA funding fee that can be included in the loan 1 • Veterans receiving VA disability compensation are exempt from the VA funding fee • VA limits certain closing costs a Veteran can pay • Can be assumed by qualified persons • Minimum property requirements to ensure the property is safe, sanitary, and sound • VA staff dedicated to assisting Veterans who become delinquent on their loan
Determining Who Is Eligible:
For the most part the following people qualify: • Veterans who meet length of service requirements • Servicemembers on active duty who have served a minimum period • Certain Reservists and National Guard members • Certain surviving spouses of deceased Veterans
Criteria For Key Underwriting:
• No maximum debt ratio; however lender must provide compensating factors if total debt ratio over 41%. • No maximum loan amount; however, VA does limit its guaranty; Veterans can borrow up to $417,000 without a down payment in most of the country. Find out the limit in any county. • Published residual income guidelines to ensure Veterans have the capacity to repay their obligations while accounting for all living expenses. • No minimum credit score requirement; instead VA requires a lender to review the entire loan profile to make a lending decision. • See the complete VA credit guidelines.
Starting The Process:
VA provides policy, guidelines and oversight of the program. Lenders provide financing for eligible Veterans. The guaranty allows Veterans to obtain a competitive loan without a down payment. Lenders need a Certificate of Eligibility (COE) to prove your entitlement. Most Veterans can obtain the COE online through eBenefits. Lenders also have the ability to request the COE on your behalf. VA encourages prospective buyers to talk to several lenders to find one that fits their needs, knows the VA loan program, and offers competitive rates and terms.