VA Mortgage Loans
The VA (Veterans Administration) guaranteed home loan is the preferred loan program for active, non-active, Reserve, National Guard, and retired military of the armed forces because there is no down payment needed and no private monthly mortgage insurance required. While most people believe that the VA lends money directly to veterans, it actually just insures the mortgage financed by VA-approved lenders.
Why Are VA Loans So Great?
VA loans are one of the best options available for veterans that would like to purchase a home or refinance their current VA mortgage. The VA program allows veterans to purchase a home with no down payment and 100% financing. In addition to this monthly mortgage insurance is not required which makes the VA program one of the most affordable options available. If a veteran is already in a VA loan they can take advantage of a reduced documentation refinance by using the streamline program to lower their payments.
What Are the Advantages of VA Loans?
- No down payment
- No mortgage insurance
- Credit scores down to 600
- No prepayment penalty ever
- Up to 50% debt to income ratio
- A VA loan may also be assumable
- Allows for 4% seller paid closing costs
What Are the Waiting Periods After a Hardship?
- 2 Years from Foreclosure or Short Sale
- 2 Years from Discharge of Chapter 7 Bankruptcy
- 1 Year from Discharge of Chapter 13 Bankruptcy
Who is Eligible for a VA Home Loan?
Wartime Veterans who were not dishonorably discharged and served at least 90 days:
- World War II – September 16, 1940 to July 25, 1947
- Korean Conflict – June 27, 1950 to January 31, 1955
- Vietnam Era – August 5, 1964 to May 7, 1975
- Persian Gulf War – Check with VA regional office for specific eligibility
- Afghanistan and Iraq – Check the VA’s Web site for eligibility guidelines for current service in Afghanistan and Iraq
Reserves and National Guard
Members who have completed six years of service and have been honorably discharged (or are still serving) may be eligible for a VA loan. Contact your regional VA office for more details.
Peacetime service of at least 181 days of continuous active duty with no dishonorable discharge. If you were discharged earlier due to a service-connected disability, you should speak with the regional VA office to verify eligibility.
- July 26, 1947 to June 26, 1950
- February 1, 1955 to August 4, 1964, or
- May 8, 1975 to September 7, 1980 (enlisted) or to October 16, 1981 (officer)
- Enlisted veterans whose service began after September 7, 1980, or officers whose service began after October 16, 1981, must normally have served at least two years.
Other types of service that may make you eligible for a VA loan:
- Certain US citizens who served in the armed forces of a government allied with the United States during World War II
- Surviving spouses of eligible persons who died as the result of service or service-connected injuries. The surviving spouse must not have remarried
- The spouse of any member of the Armed Forces serving on active duty who has been listed as a prisoner of war or missing in action for more than 90 days
What Are Some Popular VA Programs?
Standard VA Purchase
- Flexible approval process
- You can reuse VA benefits
- Higher loan limits available
- Don’t have to be 1st time buyer
VA Streamline Refinance
- No appraisal required
- No income verification
- Reduced documentation
- Competitive interest rates
Be sure to take a close look at VA and their programs to find out which one is right for you.