The VA loan guarantee program makes it possible for veterans and those currently serving in the armed forces to obtain a home loan with low interest rates and no down payment. Veterans and their families have fought and sacrificed for our country. This is one of the few ways we can say thank you.
If you are a veteran or active duty military, a VA home loan can help your family purchase a home with no down payment.
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VA Loan Guarantee
The Department of Veteran Affairs does not actually issue the loan or physically lend people money. What they do is guarantee the loan against default. A bank can confidently loan money to a veteran knowing that if something goes wrong, and they cannot pay the mortgage, the VA will pay off a portion of the outstanding loan. It works as a type of insurance that protects the bank against loss.
No Down Payment Requirement
With a VA loan guarantee,banks are able to offer home purchase loans with no down payment. FHA home loans offer low down payment options at 3% down, but nothing compares to a VA home mortgage.
What is the Maximum Loan Amount?
The maximum loan amount for a VA home loan is $417,000. Some areas of the country have higher loan limits based on the average home price for that specific county. If you live in a more expensive area, and want to know what the maximum loan amount iscontact a VA approved lender.
What Property Types Qualify?
You can get a VA home loan on a property that you are going to be living in. These property types qualify:
• Single family home
• Duplex
• Triplex
• Four unit home (small apartment complex)
• Manufactured home
Being able to purchase a multi-unit or manufactured home with no down payment is unique only to the VA. There are no other mortgage loan programs that allow borrowers to do this. A traditional home mortgage requires a sizeable down payment when purchasing anything other than a single family home. Additionally many lenders will not issue home loans on manufactured homes. The VA will as long as you also own the land,and it has a foundation.
How Do I Qualify for a VA Home Loan?
In order to qualify,you need to have a DD-214 from the VA. This is your Certificate of Eligibility. This is issued to veterans that have been honorably discharged after serving for a minimum of 90 days during war time or 181 days during peace time. Reservist also qualifies after serving for at least six years in the National Guard.
Does Everyone Offer VA Home Loans?
No, the VA has very specific underwriting requirements and only approves certain lenders to issue these loans. You need to work with a VA approved lender. If you are looking for a home loan, ask your mortgage banker if they are approved prior to applying.
Interest rates are low so contact us today to start the application process.
