Veterans of the United States military -as well as active-duty military personnel - are eligible for special government-guaranteed home loans through the U. S. Veterans Administration (VA).
We will examine this program in this article and discuss eligibility, loan limits and more!
First of all, these loans require that the borrower be either a current or former military service member. If former, you must not have been dishonorably discharged and must have served for at least a minimum period of time which varies from World War II and onwards, unless a service-connected disability occurred that forced early termination of service.
Unmarried surviving spouses of qualifying service members are also eligible.
You will need to verify your service with the Veterans Administration and have them issue a Certificate of Eligibility. To prove your military service you will, if active-duty, simply present your military identification card, or, if a veteran, present to your lender a copy of your DD-214 discharge papers. (You may obtain a DD-214 online at the VA website, they have a link for it. ) If you already have your proof of service, many lenders can obtain the Certificate of Eligibility through their own online system, or you can fill out a VA Form 26-1880 to request issuance of a Certificate. It is not a difficult process.
Loan Limits, etc.
There is technically no maximum loan limit for a VA loan. But the usual reason a veteran seeks this loan is to obtain 100% financing of their home, or as close to that as possible, in addition to the lower interest rate available.
VA has set a maximum eligibility for a veteran at, currently, $104,250. That “Eligibility" is how much down payment they will lend at 25% down. So the maximum VA 100% nothing down loan would be $417,000. You may certainly borrow more than $417,000, but you will be required to put 25% down cash on any difference between $417,000 and a higher sales price.
Example: A veteran wishes to purchase a home for $650,000. Subtract the $417,000 maximum 100% loan limit and you have $233,000 left to finance. 25% of $233,000 is $58,250 and that would be the amount the veteran would need to have available in down payment funds. Not bad, actually, that still works out to less than 10% down!
That loan, being for more than $417,000, is considered a “jumbo loan" and not all VA lenders offer jumbo VA loans, so work with a qualified mortgage broker that can guide your loan to the right lender. There will be other factors to look at as well, and these can vary from one lender to the next, such as minimum credit scores, the veteran's debt-to-income ratio (DTI), etc.
Seller concessions to cover closing costs are permitted, as well as gifted funds from Down Payment Assistance Programs.
VA loans may be used to purchase residential property only. One to four unit properties are acceptable. VA loans may also be used to refinance property already owned. There are a number of categories of property eligible, and various regulations to be aware of.
Veterans served our country. They risked their lives and many lost them, or became permanently disabled from their years of service. They took time away from their higher education and time on a job toward a civilian career while they served. They experienced, along with their families, extended separations and time away from home, even away from the USA. Our government honors their service and a VA Loan is one of the benefits our veterans and servicemen and women richly deserve.
As a veteran of the U. S. Air Force myself, I am proud to be able to help my fellow veterans and active-duty service members into a home of their own, truly their own slice of the Great American Dream!
James Hussher is a Certified Mortgage Planner and licensed in all 50 states. Please visit James at http://ezmortgages123.com for all of your residential and commercial mortgage needs. Apply online, check current offered rates and loan programs and more! Many free articles and educational resources may be accessed at http://swifthussherrealestate.com which James also runs!