VA loans are one of the few remaining sources of 100% financing. The veteran still has to qualify their income and their credit. And the amount of the loan can not exceed the appraised value. The seller can pay up to 4% of the sales price towards the Veteran’s closing costs. And the loan can be as much as $417,000. The Veteran’s credit score must be 620 or greater, which is pretty generous as compared to conventional financing which often requires a score of 650 or higher.
The house must also qualify for the loan by being in structurally sound condition. It does not have to be updated or new. It simply has to be in good enough condition to move right in with no broken windows, peeling paint, or that sort of thing.
This loan is available to Veteran’s for the rest of their lives. It can be used over and over again (only one loan at a time, however). So it is not just for the first-time purchase.
Who is eligible? Veterans, active-duty personnel, certain reservists and National Guard members, surviving spouses of persons who die on active duty or die as a result of service-connected disabilities, spouses of active duty personnel who are missing in action, captured in the line of duty, or forcibly detained by a government or power.
How does it work? The VA guarantees to the lender that if the veteran does not pay his loan the lender will be reimbursed. This means that there is no monthly mortgage insurance on this loan. There is what is called a VA Funding Fee that is usually added to the loan amount. This fee is waived if the Veteran or Service Member is disabled in the line of duty.
In addition to the VA loan, there are a couple of other great programs for Veterans. I highly recommend that if you or one of your relatives are a Vet that you visit HOWNW.com, a website devoted to military homeownership resources. There are many, many programs including the Dreammakers Grant which provides 3 to 1 downpayment assistance up to $5000.
If you are looking for a good lender to help you obtain a VA loan, I want to recommend Naida Paris at Northwest Mortgage Group. I have known and worked with Naida my entire real estate career, 24 years. She is probably the most ethical person in the mortgage lending business. And she is an expert about VA loans.
If you are currently on Active Duty, or if someone you know and care about is on Active Duty, I highly recommend you share with them this link. It is a 5 minute video that explains the Service Members Civil Relief Act. This Act requires that Active Duty military can not be charge more than 6% on their debt. That’s right, even on credit cards, they can not be charged more than 6%. It also protects them from eviction or foreclosure.
Why are VA loans so important to me? Well, I’m the Mom of a Marine (wounded in Afghanistan 5/2010), the wife of a Marine, the daughter of a Sailor, the grand daughter of a Soldier, the daughter-in-law of an Airman, the sister-in-law of an Airwoman, the sister-in-law of 4 Marines, and the Aunt of both a Marine and an Airman. Yep, my family is pretty strongly committed to the values of serving our Country.
If you are a Veteran, I would love to help you obtain your next home.