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 $625,500. 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.