Are you asking your buyers if theyâ€™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 Veteranâ€™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 sellersâ€™ closing cost contribution with a VA home loan affords buyers the chance to â€śget into a homeâ€ť, for no money, at a below market rate.
There are no â€śstated incomeâ€ť options nor â€śinterest-onlyâ€ť 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 â€śgrossed upâ€ť 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 canâ€™t be made. VA appraisers, however, are not so stringent that the home needs to be â€śnew home perfectâ€ť.
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 thatâ€™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.
Donâ€™t forget to ask your buyers if they qualify for a VA home loan. Certainly, donâ€™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.