Over 21 million men and women in America today are considered US Military Veterans. They have put their lives at risk to protect the freedoms we enjoy in America and to protect Americans from threats around the world.
The Department of Veteran Affairs (VA) works to improve the lives of those in military service and their families. One area of focus is housing.
VA currently has programs in place that help service members, war veterans, and eligible surviving spouses to own a home. Home loans are offered by private lenders and partially guaranteed by the VA. The VA Home Loan Guaranty enables the lender to offer more favorable terms to borrowers.
VA has always been known for its flexible guidelines. However, the biggest advantage for VA home loan purchases is the $0 down with no MI option.Click here for a free VA quote.
VA does not set a cap on how much you can borrow to finance your home. However, there are limits on the amount of liability VA can assume. The basic entitlement, which covers 100% of the home purchase price is based on the conforming loan limits for your area. The limits for single-unit properties with 100% guaranteed mortgages are now:
- $424,100 (Standard US limit)
- $636,150 (High-cost area limit)
It is important to work with a qualified VA lender who understands loan limits, especially if you plan to buy over the loan limit. For instance, many lenders have no idea that you can buy a $500,000 home, with a $424,100 guarantee limit and still get a $481,025 VA guaranteed loan.
Complete details about VA loan limits can be found at: https://www.benefits.va.gov/WARMS/docs/admin26/handbook/ChapterLendersHanbookChapter3.pdfClick here to get matched with a local lender and find out your local programs and loan limits.
VA has the easiest qualifying guidelines and easiest down payment requirements of all possible loan programs. Automated underwriting approvals can be issued at much higher loan-to-value limits and VA also allows a straightforward manual underwriting process if needed. VA is the most forgiving loan program for borrowers with less than perfect credit or with catastrophic financial events such as BKs and foreclosures.
Some 2017 Highlights that make VA good option for many include:
- 0% down payment
- No mortgage insurance requirement
- VA limits certain closing costs (non-allowable costs)
- DPA grants can be applied to VA loans to lower mortgage starting balance
- No first-time homebuyer restriction
- More flexible underwriting guidelines
- Shortest seasoning for BKs and foreclosures
- VA IRRRL (streamline) program for easy VA to VA loan refinance when rates dip
Certain homes, including some condo projects, might be prohibited from using VA financing. Be sure to consult with your trusted VA loan advisor about which properties can or can’t use VA financing.
Complete mortgage guidelines for VA Programs can be found at: https://www.benefits.va.gov/warms/pam26_7.aspClick here to see if a VA loan program is right for you.
Down Payment Assistance
While one of the top benefits of the VA home loan guarantee program is the $0 down feature, it is still possible to combine $0 down and local grant programs to further benefit our military veterans when buying a home.
Grants exist for servicemembers and veterans who have sustained permanent disabilities and are given to aid in construction or modify an existing home to better suit the disabled veteran’s needs.
Some current VA programs include:
- VA $0 Down (Standard VA guaranteed home loan with 100% financing and no MI)
- Adapted Housing Grants (Issued by VA and used to construct an adapted home or modify an existing home to accommodate a disabled servicemember or veteran)
- State specific Veterans’ Home Loan Programs (Some states have specific veteran home loan programs with lower interest rates and expanded approvals designed to fill in gaps where standard VA home loans might not work)
Almost every state has a down payment assistance program that can be paired with a VA Loan program.Funds typically come in the form of a federal grant, a local bond program, bank subsidy projects, or a funding initiative sponsored by a local group. Grants are not paid back—it is free money.
Be sure to talk to a qualified local VA lender who is also certified to administer DPA programs in your state and local jurisdiction. Work with a trusted VA advisor who will listen to your needs and understand your situation. A trusted VA advisor can present ALL your personal options.