33% of vets aren't even aware of their VA Home Loan Benefit.*
More than 21 million Veterans and Servicemembers live in the U.S. today, but only about 6 percent of them bought a home using a VA home loan in the past 5 years!**
*Per VAgov.com National Survey **Per Blogs VAgov.com
Not everyone who served our country is eligible for a no-down VA loan—but there are many, many veterans who DO qualify and don’t realize that they are eligible. They are issued a Certificate of Eligibility that makes the final determination.
Who Might Be Eligible?
•Army •Navy •Air Force •Marines •Coast Guard •National Guard •Cadets – Army, Navy, Air Force, Marines, Coast Guard •Midshipmen – Naval Academy •National Oceanic & Atmospheric Officers •Merchant Seamen (WWII) •US Citizens who served in the armed forces of other governments (WWII)
Length of Service Needed
- WWII – minimum 90 days
- Post WWII – 181 continuous days
- Korean War – 90 total days
- Post Korean War – 181 continuous days
- Vietnam – 90 total days
- Post-Vietnam – 181 continuous days
- Gulf War – 90 total days
- Currently on Active Duty – 90 continuous days
- Selected Reserve or National Guard – 6 years
•Surviving Spouse Benefits •Unmarried Spouse of a Veteran : Died in conflict : Died from service-related injury : Missing in action : Prisoner of war : Totally disabled whose disability may not have been the cause of death : Surviving spouse who remarries after age 57 and after December 16, 2003
The Veteran’s spouse can co-mortgage living in the home. The veteran must occupy the property unless deployed.
VA now allows non-occupant co-mortgagors as well as non spousal co-mortgagors. The non-VA borrowers have no eligibility, so their portion of the mortgage must include a 25% down payment. (Loan must be VA UW)
Sales Price $200,000 / 2 (veteran/non-veteran) = $100,000 * 25% = $25,000 required down payment from non-veteran
What About Same Sex Marriages?
A Presidential directive has required the VA to stop enforcing a portion of Title 38 that defines a spouse as someone of the opposite sex. Same-sex couples who are legally married by state law may now enjoy the VA home loan benefits they have earned.
How does this directive affect same-sex couples when qualifying for a VA loan?
VA will now guarantee the entire loan and not just the Veteran’s 50% of the loan, as the same-sex spouse is now treated the same as an opposite-sex spouse.
VA will now use the same-sex spouse’s income for qualifying.
What is the lender’s process and how will it affect same-sex couple buyers?
- Couples will need to provide documentation showing date and state of marriage, and state of residence at time of marriage.
- Documents must be submitted to the VA Loan Center for approval on a case-by-case basis.
- Additional processing time will be needed for the loan approval.
Know the advantages of a VA home loan!
- No minimum down payment required*
- 4% seller concessions allowed plus closing costs
- Gift Funds from family members may be used towards closing costs
- No post-closing reserve requirements
- Funding Fee can be financed into the loan
- AND… a Veteran can use Entitlement multiple times and is not required to be a first-time homebuyer
*A down payment is required if the borrower does not have full VA entitlement and is subject to VA area loan limits for loans over $424,100.
•2 Years of Satisfactory Credit following Chapter 7 BK.
(7 years required for loans >$424,100.)
•1 year on time payments on Chapter 13 BK.
•2 Years of NO Bad Credit following Foreclosure.
(7 years required for loans >$424,100.)
NOTE: If the Veteran has a VA foreclosure, they will have a lien on their eligibility, which will prevent them from being able to use VA financing on the next home unless the lien is paid in full.
VA PROPERTY FLIPPING
VA has no hard and fast property flipping rule, but any underwriter can request additional documentation if they have concerns that an increase in value since the previous purchase might be unreasonable.
NO DOWN PAYMENT? Really??
- No minimum cash investment required from Veteran unless the sales price exceeds $424,100 or the county limit.
- OR, if the sales price exceeds the county limit: Value* x 75% + Eligibility = Maximum Loan
*Value: Sales price or appraised value, lesser of the two
Note: VA allows Qualified veterans to borrow $2,000,000.00 or higher in any county with a down payment.
Example for $500,000 property in El Paso County:
$500,000 X .75 = $375,000.
$375,000 + 106,025 (eligibility for El Paso CO) = $481,025
Base VA Loan Amount., OR 3.8% down payment
It’s their right!
They’ve earned it!
Opinions expressed here are the sole responsibility of the author, and do not necessarily reflect the view of Fairway Independent Mortgage.
Ruth Vogt, Sales Manager
#LMB100023827, NMLSR# 257576
Equal Housing Opportunity.
Regulated by the Division of Real Estate.