VA loans were designed to help veterans of the armed services, either currently serving in active duty or in the reserves, as well as their spouses. In order to qualify for a VA loan, a veteran must meet the eligibility guidelines set by the Department of Veterans Affairs. VA Loans enable veterans that qualify to put no money down on a mortgage loan up to $417,000.
VA Loans are guaranteed by the Department of Veterans Affairs (the maximum guaranty is equal to 25% of the Freddie Mac conforming loan limit for a single family home. In 2008 this limit is set at $417,000 for all states except in Hawaii, Alaska, Guam and the U.S. Virgin Islands where the limit is set for 2008 at $625,500).
Some quick information about VA loans:
- VA loans do NOT have a prepayment penalty and MAY be assumable in certain situations.
- Full income/asset documentation is required
- You can get a VA loan for a new single family residence home, condominium or manufactured home (with or without the lot)
- A VA loan requires a funding fee that can either be paid by the borrower or may be allowed to be financed into the loan. This funding fee may also be waived under disability guidelines established by the VA.
2008 Funding Fee Schedule:
|
Loan Category |
Active Duty and Veterans Rate |
Reservists and National Guard Pay |
|
Loans for purchase or construction with down payments of less than 5%, refinancing, and home improvement. |
2.15% |
2.40% |
|
Loans for purchase or construction with down payments of at least 5% but less than 10%. |
1.50% |
1.75% |
|
Loans for purchase or construction with down payments of 10% or more. |
1.25% |
1.50% |
|
Loans for manufactured home. |
1.00% |
1.00% |
|
Interest rate reduction loans |
0.50% |
0.50% |
|
Assumption of VA-guaranteed loans. |
0.50% |
0.50% |
|
Second or subsequent use of entitlement with no down payment |
3.3% |
3.3% |
VA Loan Eligibility
- For the official service requirements and periods of eligibility, go here to see if you qualify.
- Good credit (doesn’t have to be perfect credit, but your credit score is a factor)
- Sufficient income to support a monthly mortgage payment
- Valid Certificate of Eligibility (COE)
- Purchase must be your primary residence
With the many upcoming changes to the FHA programs, it makes more sense than ever to find out if a VA loan can save you money when buying your new home. Call me anytime!