VA home loans are to help veterans finance the purchase of homes with favorable loan terms. There are members of the Selected Reserve, active duty personnel and certain categories of spouses that may also be eligible for VA loan financing. You will need to provide a Certificate of Eligibility from VA to prove to the lender that you are eligible for a VA loan.
VA loans offer many benefits for the veteran:
- Ensure that veterans are given equal opportunity to buy homes with VA assistance
- No downpayment (unless required by lender or if the purchase price is more than the reasonable value of the property)
- Limitations on closing cost
- Allows seller/lender concessions to help pay closing cost
- Single family residences and manufactured homes can be financed
There are some other benefits that you may want to check on. A great resource for any questions regarding eligibility and all benefits can be found here.
VA loans are unique and have features that only apply to them. VA-guaranteed loans are made by lenders (banks, savings and loans or other mortgage companies). If the loan is approved, VA guarantees the loan when it is closed. The guaranty means the lender is protected against loss if you fail to repay the loan. The guaranty amount does vary depending on the sales price of the home but generally goes up to a max of $36,000.
VA loans are for primary residence only and require full documentation for qualifying. VA loans also do not have any monthly mortgage insurance but they do have a funding fee. The funding fee is a percentage of your loan amount that is generally financed into your loan. The funding fee does vary depending on which type of service you were classified as (regular military or reserves/ National Guard). Money for down payment can also lower the amount of the funding fee. Veterans that are disabled may also be exempt from paying the funding fee.
Call us at 602.206.3144 with any questions.
*Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency.