VA Home Loan Basics For Realtors

Posted by: Brian Brady on August 28th, 2008

Are you asking your buyers if they’re veterans of the U.S. Armed Forces? There are 25 million veterans in the U.S. today, 2 million of which are women. While more than two-thirds of them are over 40, a substantial number could benefit from the Veteran’s Administration (VA) Home Loan Program.

The VA Home Loan Program is the only national 100% financing loan program. Veterans can purchase a home with no down payment and the seller can contribute up to 4% of the home price for their non-recurring closing costs and impounds.

Often referred to as the VA No-No program, combining the max sellers’ closing cost contribution with a VA home loan affords buyers the chance to “get into a home”, for no money, at a below market rate.

There are no “stated income” options nor “interest-only” options for a VA home loan. Veterans must qualify on full income documentation. Their total monthly obligations (including the proposed mortgage payment) must be under 43% of their monthly income unless they meet the VA residual income qualification. Current service members receive an allowance for housing (BAH) and food (BAS) and those figures can be “grossed up” 115% for income qualification.

Appraisals are assigned by VA and ordered by the lender. Many lenders participate in a delegated underwriting program (LAPP) but some opt to let the VA underwrite the appraisal. General guidelines suggest that if the home is inhabitable, the loan can’t be made. VA appraisers, however, are not so stringent that the home needs to be “new home perfect”.

There is no minimum credit score requirement for a VA home loan although a 12-24 month history of good payments is required. Some lenders have imposed credit score minimums but a good mortgage broker always has a lender who will fund VA loans on the more relaxed VA-compliant credit requirements.

Most lenders and mortgage brokers are easily approved to originate VA home loans; sponsorship by a VA-approved lender is all that’s required.

Many REALTORS believe that VA home loans take longer to process, underwrite, and fund. An experienced loan originator can generally get a VA home loan closed in 17-30 days.

While the VA loan limit is currently $417,000, recent housing legislation temporarily increased that limit, in high cost areas, until the end of 2008.

Don’t forget to ask your buyers if they qualify for a VA home loan. Certainly, don’t prejudge them based on gender. With a growing number of women serving in our Armed Forces, you might be neglecting to offer your buyers a great benefit.

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Comments

11 Comments on “VA Home Loan Basics For Realtors”

Mark Simons

Great “heads up” to a loan program than is easy to overlook in the flurry of today’s Lending Market. AND a great way to say “thank you” to the men and women who wore the Uniform in Service to our Country.

Charles Richey

With the war dragging on in Iraq, they’ll be lots of veterans for years to come that will be able to take advantage of the VA loan program. We get a lot of them in Las Vegas because of Nellis AFB.

Brian Brady

I always feel really good when I put a service member or Vet in a home. The VA home loan program works really well and the underwriting guidelines are pretty comprehensive; they make sure the Vets can afford it.

Charles is correct; we’ll see a lot more of these Vets buying when the war in Iraq is over. San Diego is a military town (Navy and Marines)so I do a healthy amount of VA loans.

Real Estate Taxi

I have a few friends in the armed forces, I will make sure they are aware. I understand what the VA Home Loan is but returning war heroes may not think that they have this option when purchasing a home.

FHA Home Purchase Leads

Home is very special place for all of us. Normally first time home buyers use FHA home purchase leads to purchase new home. For those owners who are facing some financial difficulties this is the best program that can be used for loan modification. FHA home purchase leads have some guidelines and the guidelines that should get the help you need. FHA home purchase leads saves time and ensures that you and all other applicants receive consistent treatment.

Alex Monroe

Nice post. There are really a lot of way that borrowers that could go into depending on their situation. At the end you most likely will get the help you need. Contact your mortgage company for more information.

Bank Loan

When it comes to a business loan or commercial real estate loan, there are many good reasons NOT to turn to a traditional bank. Here are some of the most important reasons. Many small business owners, will find most of these points directly applicable to them.

low rate home equity loan

There will be lot of people who will take advantage with this one. Pretty sure they are going to benefit a lot.

va loans

Please study out the program and use it, our veterans deserve everything they have earned. When we work on these loans uneducated it is the veterans that suffer.

Fixed Rate Mortgage

The Federal Housing Administration (FHA) doesn’t’ purchase the loans but they do insure the loans against default. The insurance helps homeowners who may not have enough money for the down payment to purchase a home.

Home Loan Banks

I totally appreciate with the advices that has been given in this post about home loans.

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