VA Loans are a benefit for Military Personnel (active duty, veterans, reservists, surviving spouses). VA will guarantee up to 25% of the mortgage.
Customer Benefits
- Eligible for 100% financing under most circumstances
- No monthly mortgage insurance
- No Pre-Payment Penalty
- No minimum FICO Score
- Seller can pay closing costs
- No limit on “non-recurring” closing costs (appraisal, credit, etc) or discount points with 4% limit on funding fee, pre-paids or buy-down funds
Funding Fee
- Similar to FHA Up Front Mortgage Insurance
- Amount of Funding fee is based on service type, prior use, and transaction type. If borrower is a disabled veteran (VA must certify), then funding fee is waived
- Funding fee may be financed or paid in cash
Entitlement
- Entitlement is the dollar amount of the guaranty available to the veteran
- Veteran with full entitlement can often purchase a home with zero down payment
- Certificate of Eligibility will document available entitlement
Loan Limits
- FHLMC Conforming Loan limit (currently $417,000)
Eligible Transactions
- Purchase
- Full Refinance (Rate/Term, Cash Out) or IRRL (Interest Rate Reduction Loan) – VA “Streamline” Refinance
Eligible Borrowers
- U.S. Citizens, Permanent Resident Aliens, and non-Permanent Resident Aliens
- Co-Borrower must be borrower’s spouse
- If co-borrower is not the borrower’s spouse, this is considered a “joint loan”. Guaranty will be based on veteran’s portion of the loan (often requiring a down payment).
Eligible Products
- 20-30 Year Fixed, 15 Year Fixed, 3/1 ARM, and 5/1 ARM
Property
- Eligible Properties: Single Family, 2-4, Condos, Manufactured Homes, New or Existing Construction
- Condominium projects MUST BE approved by VA (no spot approvals)
