VA Loans

A VA loan is a mortgage loan guaranteed by the U.S. Department of Veteran Affairs (VA) that is available to most US service members. It offers some very great benefits to those that have served our country.

Benefits of VA Loans

• You can buy a home with no money down.
• You can finance your home up to 100% of the value of your home up to $766,550. Any loan limit above this amount will require a downpayment of 25% of the difference between $766,550 and your sales price. For example, if you are buying a home for $800,000, the difference between that and the regular loan limit is $33,450 and 25% of that is $8,363. This is still a much less than what a conventional loan would require.
• You never have to pay monthly PMI (Private Mortgage Insurance).
• Sellers can pay up to 4% of your closing costs.
• The guidelines are more generous because the government insures the loan so that there is much less risk to the lender.
• If you already have a VA Loan you might be eligible for a VA Interest Rate Reduction Refinancing Loan (IRRRL).
• Disabled Veterans may qualify for a waiver of the Funding Fee if they receive any disability payments from the VA or if they are considered to be at least 10% disabled.

Who is eligible for a VA Loan?

As a rule of thumb, almost all active duty or honorably discharged service members are eligible for a VA loan.

You may be eligible for a VA loan if any one of these statements describes you:

• I served 181 days during peacetime. (Active Duty)
• I served 90 days during wartime. (Active Duty)
• I served 6 years in the Reserves or National Guard.
• I am the spouse of service member who was killed in the line of duty.
• I currently receive disability payments from the VA.

What is the VA Funding Fee and is it required?

Yes, it is required. It is a fee paid directly to the Department of Veteran's Affairs so that they can guarantee your loan and provide you with the opportunity to receive a loan with little to no money out of pocket.

How much is the VA Funding Fee?

It depends on several factors including: Whether you are Active Duty, Retired, Guard or Reserve and whether you this is a first time use, subsequent use, or a cash-out refinance as well as how much of a down payment you are putting down. The fee can range from as little as 1.5% up to 3.3% of the loan. Generally, the more money you put down the lower the VA funding fee. Please contact us and we will help you to determine how what the exact cost of the VA Funding Fee would be for your particular situation.

Do I have to pay the VA Funding Fee out of pocket?

No, you can include the VA Funding Fee in your loan and pay the funding fee over the course of your loan.

Do I still have to pay other normal closing costs like Appraisal, Title and Escrows?

Yes, however, with a VA loan if you are purchasing a new home the lender or seller can pay for all or part of your closing costs.  If you have full entitlement, you could close on your home with little to no cash out of pocket.

What is a VA Streamline Refinance?

A VA Interest Rate Reduction Refinancing Loan is a refinance option that is available if you already have a VA mortgage and you want to lower your interest rate with little or no out-of-pocket closing costs. You don't have provide bank statements, W2s, job verification or paychecks and the VA Funding Fee is only .50% when compared to a regular VA refinance.

VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans.

Other benefits of a VA loan include:

• Closing costs comparable – and sometimes lower than other financing types.
• No private mortgage insurance requirement.
• Right to prepay loan without penalties.
• Mortgage can be taken over (or “assumed”) by the buyer when a home is sold.
• Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.

Although mortgage insurance is not required, the VA charges a one-time upfront funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount.  If you refinance, you will have to pay the funding fee again.

Click here for the current VA Funding Fees.

A VA loan can be used to buy a home, build a home and even improve a home with energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.  You may also provide us with your DD-214 and we can request the Certificate of Eligibility for you.

These materials are not from HUD, VA, or FHA and were not approved by HUD or any other government agency.