VA Loan Information
What is a VA loan?
VA loans are home loans available to consumers who have served or are presently serving in the U.S. military for purchase of a primary residence. While the Veterans Administration (VA) does not lend money for VA loans, it backs loans made by private lenders (banks, savings & loans, or mortgage companies) to veterans who qualify.
How can veterans get VA loans?
Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program, but will need a Certificate of Eligibility from the VA to prove to the lender they are eligible for a VA loan. Lenders can also get the certificate on behalf of their clients. Eligibility rules for VA loans are on the U.S. Department of Veterans Affairs Web site.
What are the benefits of veteran loans?
There are many, as taken directly from the Veterans Administration site:
- No down payment required (unless required by the lender or the purchase price is more than the reasonable value of the property).
- Buyer informed of reasonable value.
- Negotiable interest rate.
- Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation).
- Closing costs are comparable with other financing types (and may be lower).
- No mortgage insurance premiums.
- An assumable mortgage.
- Right to prepay without penalty.
- For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
- VA assistance to veteran borrowers in default due to temporary financial difficulty.
How big of a VA loan can a veteran get?
According to the 2009 VA County Loan Limits for High-Cost Counties, there is "...no maximum that an eligible veteran may borrow using a VA-guaranteed loan." However, there are county limits that must be used to calculate VAs maximum guaranty amount for a particular county. Generally, an eligible veteran can get a loan up to $417,000 with no money down and in some high-cost places, up to $729,750. These figures follow conforming loan limits allowed by Fannie Mae and Freddie Mac.
Does the VA loan need to be repaid?
Yes. It is a loan and needs to be repaid just like any other loan.
For more information on VA loans, visit the U.S. Department of Veterans Affairs Web site.
