VA Loans

Home Loan Options for Veterans

What is a VA Loan?

The VA Loan became known in 1944 through the original Servicemen's Readjustment Act also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families, and the dream of home ownership became a reality for millions of veterans. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and to the growth of the nation's economy.

With more than 25 million veterans and service personnel eligible for VA financing, this loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.

VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.

Did You Know?

What are the benefits of a VA Loan?

  • Low or no down payment
  • No mortgage insurance requirement
  • Flexible qualifications guidelines
  • Fixed-rate and ARM options

VA Loan Changes in 2020

Effective January 1, 2020, the VA will be eliminating the loan amount cap that is currently in place. Any veteran with full entitlement will now receive 25% guarantee on any loan amount. Previously, the full guarantee amount was limited to the Freddie Loan Limit of $484,350, requiring a down payment from the borrower when the loan amount exceeded this amount. While the VA has increased the Funding Fee (similar to mortgage insurance), the removal of the loan cap gives veterans the opportunity to get up to 100% financing on homes valued over $484,350. 

If you are interested in buying a home with a VA loan, now is a great time to take advantage of these new benefits. Call today and we can get you in touch with a partnered company to assist you in obtaining a VA loan.

Can I use my VA Loan Benefits more than once?

There is a common misconception that veterans can only use their VA home loan benefits once. This comes from the VA requirement mandating veterans (or spouse) occupy the residence as their primary home, which is true. But, a veteran can use their VA benefit again for a number of reasons, including:

  • Upgrading to accommodate a growing family
  • Downsizing
  • Relocating due to work
  • Being re-stationed
  • Buying a home for their spouse to live in while on active duty

Mary Marx REALTOR® is a Veterans Association Certified Agent. 

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