For years, VA loans have been dogged by reputation as bureaucratic, time-sucking black holes.

But some major pillars of the VA’s loan program have long been misunderstood or mischaracterized. Nowhere is that more true than the VA appraisal, a fair but stringent process that puts a premium on a veteran’s health and safety.

A VA appraisal is more thorough than a typical appraisal and mandates immediate repairs that need to be made in order to meet the agency’s Minimum Property Requirements (MPRs). Homes must be what the agency considers “move-in ready.”

Having an agent who knows the VA MPRs can certainly spare veterans time, heartache and money. The earlier a veteran understands the limitations and requirements, the sooner he or she can make a decision about whether to move forward with the property or to continue the home search.

Understanding the MPRs has also become increasingly important since the economic collapse flushed the housing market with foreclosures.

Here’s a look at 10 of the big-time MPRs:
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As of now, the housing market offers some of the lowest refinance rates ever. These exist due to a combination of the state of the world financial markets and due to the policies of the United States government. In this season of political change, though, there are a number of proposals and political realities that could change the atmosphere greatly for homeowners looking to replace their mortgage with a more attractive one.

The Abolition of Freddie Mac and Fannie Mae

Government-sponsored entities, frequently referred to as the “GSEs,” are currently responsible for 90 percent of the money that gets lent out as mortgages, based on an article in the New York Times. When a homeowner gets a mortgage, their lender sells the mortgage to Freddie or Fannie. Freddie or Fannie then package large blocks of mortgages into bonds, and sell the bonds on the global financial markets to investors. Since bonds issued by Freddie and Fannie carry an implicit guarantee from the U.S. Government, investors will buy them at low rates of interest, making it possible for mortgages to be made at very low rates.

Politicians ranging from Barack Obama on the left to Ron Paul on the right have called for the abolition of these organizations. The problem with them is that they expose the government to a great deal of risk, since the government is ultimately responsible to bail them out. In addition, their role in the market distorts the true market for mortgage debt. If their role is abolished or cut back, private mortgage lenders will make more, if not all, of the loans in the market. They will likely demand higher rates of return on safer investments, leading to more expensive refinances at less attractive terms.
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Deciding to purchase a home can be an overwhelming experience for any potential home buyer. In addition to taking the time to scour through newspaper ads and online searches to find an ideal home, buyers also have to worry about securing adequate financing which isn’t always easy in today’s economy.

Conventional lenders are more strict than ever before when it comes to borrower eligibility. With most programs, applicants must have stellar credit scores and histories and are generally expected to have a down payment near 20 percent of the home’s sales price simply to secure financing. For a modest home purchase of $125,000 that means borrowers are expected to put down $25,000 out of pocket, not including other costs normally associated with purchasing a home.

For many interested home buyers, conventional lending options simply make home ownership either unaffordable or inaccessible to obtain. However, the USDA home loan program tends to alleviate the major costs associated with financing so that more people can have access to the dream of home ownership.

What is the USDA Home Loan?

The USDA home loan is a home financing option provided by the USDA’s Department of Rural Development that has been designed to make securing a mortgage easier for those interested in living in rural or outskirts areas. There are two types of home loans generally provided by the program, the Direct and the Guaranteed, and both are 100 percent backed by the government. By providing interested home buyers with a loan option that is backed by the government, borrowers are able to save out-of-pocket expenses through various benefits.

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Want to give an immediate boost to housing sales? Ron Phipps has a suggestion: Mortgage lenders should look beyond borrowers’ credit scores.

Phipps knows of what he is talking. He’s the president of the National Association of REALTORS and the broker/owner of Phipps Realty in Warwick, R.I. He says that home sales would quickly rise if mortgage lenders used just a bit more flexibility in deciding which borrowers qualified for mortgage financing.

Phipps told me during a recent phone interview that Fannie Mae and Freddie Mac are now looking for borrowers to have FICO credit scores of just under 760. That’s a big change from the days when credit scores in the high 600s were considered strong.

It’s true that borrowers can get conventional mortgage financing with credit scores lower than 760. They may, though, have to pay higher interest rates. And these higher rates might knock some buyers out of the market.

“That 760 score is just so much higher than what the average American homebuyer today has,” Phipps said.

Tightening credit standards have played an important part in the housing slowdown, Phipps said. According to data from the National Association of REALTORS, about 15 percent of creditworthy borrowers haven’t been able to get mortgage financing because of the stricter credit-score requirements of Fannie and Freddie.

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There is no better time to purchase real estate than in today’s economy as prices have evened out, and the inventory proves that it is indeed a buyer’s market. There are many options in which to purchase a real estate investment, whether it is cash or through the traditional methods of conventional mortgage financing, but there are some instances in which homebuyers cannot obtain either. Because of the challenges due to the economy there may have been instances where individuals have suffered a bankruptcy, foreclosure, slightly blemished credit, or perhaps one has a sporadic income in which lenders raise questions about. Whatever the case, there are indeed other alternatives to obtaining a mortgage to purchase real estate for those who are ready and willing to do so.

1. One can choose to borrow from a whole life insurance policy. Whole life insurance policies are insurance policies in which the cash value accumulates over a period of time and it is possible to borrow against the cash value of the policy. One of the best features in borrowing against a whole life policy is that there is no loan qualifying process to go through. It is important to keep in mind though that by borrowing against a whole life policy it does diminish the face value of the policy. If this is an option, it is important to ask the insurance carrier of the whole life policy several questions such as: is there an interest rate on this loan, is the amount I withdraw taxable, could my policy lapse because of this withdrawal, can I pay back the loan to bring back up the original face value that the policy once had? Be smart and realistic. Ask if the negatives outweigh the positives when thinking of borrowing against a whole life policy.

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The fact that Veterans Day and Thanksgiving are just weeks apart is a historical quirk.

But it sure feels right, doesn’t it?

As we take time this week to craft a list of family, friends and other things we’re thankful for, consider adding another line item to the list: those who have fought for our freedom. And, of course, those who continue to do so.

During this month of giving thanks, one of the best ways to honor American service members and their sacrifices is to make sure they’re aware of the myriad benefits available to them. From health benefits to education opportunities and beyond, there’s an array of significant benefits that provide some small measure of gratitude to those who have sacrificed so much.

There’s certainly one major benefit in particular worth exploring here — the VA home loan program. This unique purchasing option has helped more than 18 million veterans and their families become homeowners since the waning months of World War II.

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