VA HOME LOAN FAQ’S

You have questions about VA home loans? We have answers. 
See the answers to our Frequently Asked Questions below.

 

FAQ’s

How do I know if I am Eligible?

Eligibility

An Eligible Veteran meets the basic criteria of appropriate length and character of service to utilize the home loan benefit.  Unmarried Surviving Spouses of a Military Member who was killed while on Active Duty, or if their death is a direct result of a Service-Connected Injury, Illness, or Disability, may be eligible as well.

Eligibility Requirements

  1. You served 90 consecutive days on Active Duty during wartime
  2. You served 181 consecutive days on Active Duty during Peacetime
  3. You have 6 years of service in the National Guard or Reserves (with 16 pts)
  4. You are the Unmarried Surviving Spouse of a Military Member who was killed while on Active Duty, or their death is a direct result of a Service-Connected Injury, Illness, or Disability.
What is the VA Funding Fee?

The VA Is Not A Lender

The VA is more like an insurance agency, rather than a lender or investor.

If the Veteran buyer “defaults” on their loan, and the lender has to “foreclose” on the property, the VA will pay out a claim to the lender to cover its Foreclosure Costs, as well as buy back the loan.  For this reason, the VA charges an “Insurance Premium” called the “VA Funding Fee”.

The Funding Fee can be paid 3 ways.

  1. The Veteran Buyer can pay for it out right with cash at close.
  2. Seller Concessions can pay for it.
  3. The Veteran may finance it into the VA Home Loan.  

 

If a Veteran receives at least a 10% Disability Rating from the VA, the VA Funding Fee is waived!

How long does it take to close a VA Loan?

How Long

In Fiscal Year 2017, the average turn time from application to close was 26 Days.

Am I Guaranteed to get a loan from the VA?

Is It A Sure Thing?

No.  The home loan does not guaranty that the Veteran will get financing from a Lender.

It guarantees the lender that, in the event of a Veteran Borrower’s “default” on their mortgage, the VA will buy the loan back from the lender, and pay them 25% of the loan amount to cover foreclosure costs.

Can I have a Non Occupied Co-Borrower to help Purchase my home?

Non-Resident Co-Borrowers

No. The VA requires the Borrower and Co-Borrower to intend to occupy the property as their Primary Residence.

If they are going to live with me, can I use my significant other or my parents to help me qualify for my VA Loan?

Qualification Help

Yes.  The VA Home Loan is designed for a Veteran, Veteran and their Spouse, or 2 Veterans jointly. If the Veteran has a Co-Borrower that is neither their Spouse, nor another Veteran, the VA will only provide a 12.5% Guaranty to the lender instead of the normal 25%.

In these cases, the Borrowers must put down the 12.5% as a down payment to make up the difference.

Can I use my VA Home Loan to buy a Vacation Home of Investment Property?

Vacation Homes

No.  The VA Home Loan is for the purchase of a Primary Residence only.

What is the Maximum Loan Amount allowed by the VA?

Loan Limits

The VA does not have a “Maximum Loan Amount”. They do have a “Maximum Loan Amount that they Guaranty”. In most counties, the Maximum Loan Guaranty Limit is $453,100. Some “High Balance” counties will go as high as $679,650.  A Lender may “lend” any amount they choose.

However, to receive the “VA Guaranty” there must be 25% (of the loan balance) Coverage. Any time the Purchase Price exceeds the Maximum County Loan Guaranty Limit, then then Veteran is responsible for 25% of the “difference” between the Purchase Price and the Maximum Loan Guaranty.  

The other 75% of the “difference” can be financed into the Veterans Loan, as long as the Veteran can “Qualify” for the higher Loan Amount.

If I had a Foreclosure on a VA Home Loan, can I get another one?

Second Chances

Yes, but there is a catch. You must wait at least 2 years from the Sheriff Sale Date to obtain financing on a VA Loan after a Foreclosure.

When a VA Home Loan is foreclosed on, the Lender will make a claim for the Guaranty. That dollar amount must be subtracted from the Veteran’s remaining Entitlement (unless they paid the amount back directly to the VA and restored Full Entitlement), and the Veteran may use any remaining “Bonus Entitlement” to qualify.

Can I use my GI Bill “Housing Allowance” to help qualify for my VA Home Loan?

Housing Allowance

No.  Although the GI Bill is called a “Housing Allowance,” it is temporary in nature, and contingent upon the Veteran remaining in School. The Government will not provide a letter guarantying the income for 36 months, therefore it may not be used.

Active Duty BAH (Basic Assistance for Housing) is considered stable income for Active Duty members. These are often confused for one another.