A VA Loan is designed to offer long-term financing to American veterans. VA mortgage loans are issued by federally qualified lenders and are guaranteed by the U.S. Department of Veterans Affairs. The VA determines eligibility and issues a certificate of eligibility (COE) to qualifying applicants to submit to their mortgage lender of choice. For servicemen and women, it is generally easier to qualify for a VA loan than conventional loans. If you are an active duty military personnel, a current National Guard or Reserve member, discharged member of selected reserve or retired veteran, the VA home loan program is for you.
Here’s how it works:
- 100% financing without private mortgage insurance nor second mortgage.
- Available to servicemen/women and their eligible spouse.
- A VA funding fee of 0 to 2.15% (this fee may be financed) of the loan amount is paid to the VA.
- When purchasing a home, veterans may borrow up to 100% of the sales price or reasonable value of the home, whichever is less.
- When refinancing a home, veterans may borrow up to 90% of reasonable value in order to refinance where state law allows.
- The home must be used as a primary residence only, must be occupied within 60 days after closing on the loan and must remain the veteran’s primary residence for at least 3 years.
VA Loan: A mortgage loan program established by the United States Department of Veterans Affairs to help veterans and their families obtain home financing. The Department of Veterans Affairs does not directly originate VA loans; instead, they establish the rules for those who may qualify, dictate the terms of the mortgage offered and guarantee the loans against default.
Since the loan is guaranteed by the VA, the lender is protected against loss if the borrower defaults on the loan. It was designed to reward servicemen and women for their sacrifice and contributions. The VA home loan program carries a very low-interest rate as compared to other loan programs out there. The seller can also pay for some of the closing costs up to 4% of the loan amount. A termite inspection report is required on all VA home loans, this is one of the requirements that’s applicable on all VA home loans but not in any other loan programs.
A Veterans home loan can be used for several purposes:
- To purchase a house or a condo (as long as the condo in a VA-approved development area);
- To build a home;
- Make improvements to the house;
- Refinance an existing VA loan.
There are eligibility requirements in order to qualify for a VA home loan. The surviving spouse of a veteran is eligible for a VA loan as long as the spouse stays single until age 57; they can remarry after age 57. Spouse of some totally disabled veteran who died from this condition may also be eligible. Veterans and the eligible spouse are required to have a copy of their DD-214. They can apply for the Certificate of Eligibility online or contact the VA office for more information.
Additional information regarding VA loans are available here. Please contact our VA Home Loan Specialists at 281-860-2533 for more information.