VA Loan – The Runt of the Loan Program Litter

Over the past year since the mortgage and housing implosion has started, we have only heard about Fannie Mae this, and Freddie Mac that. Mortgage companies have come and gone, some deservedly. Fannie, Freddie and FHA maximum loan limits have been adjusted upwards, thanks to the stimulus package and soon to a more permanent status by the Congress, Senate and President. Many new programs have been developed such as FHASecure and Hope Now to help borrowers who have an adjustable mortgage about to reset. But what about the runt of the loan program litter that no one is paying any attention too. What about the good old VA loan? Being one of the last of it’s breed of 100% financing, the VA loan is for veterans and active duty military personnel, members of the reserve and National Guard.

What are some of the advantages of using a VA loan?

1. VA loans are assumable as long as the buyer can qualify.
2. The veteran does not have to be a first time home buyer and can reuse their benefit.
3. The amount of closing costs charged to the borrower are limited by VA.
4. The seller can pay up to 4% of the closing costs.
5. Prepayment of the loan without a penalty.
6. There is no private mortgage insurance.
7. Up to 100% of the purchase price can be financed

What are some of the requirements for a VA loan?

1. Loans are generally limited to the confirming loan limit of $417,000. However, with a down payment

this loan amount may be exceeded.
2. The veteran must occupy the home as his/her primary residence.
3. The veteran must have the necessary money to pay for certain closing costs and the earnest money

deposit.
4. VA does require that the veteran pay an up front VA funding fee, however VA does allow this fee to be financed and added to the loan amount.
5. The closing costs that a seller may pay for are limited.
6. Although the VA is insuring the loan, the veteran must be able to qualify with their credit and income.

So, if you are a veteran, active duty military personnel or a member of the reserve and National Guard, you may want to think about using your VA loan benefits. Don’t forget, sometimes picking the runt of the litter can be the best decision you have ever made.