VA Loans

Key Features:

1. No Down Payment Required: Eligible borrowers can purchase a home without making a down payment, as long as the purchase price doesn’t exceed the appraised value, making homeownership more accessible for veterans and service members.
2. No Private Mortgage Insurance (PMI): Unlike many conventional loans that require PMI when the down payment is less than 20%, VA loans do not require this additional cost, which can save borrowers money each month.
3. Competitive Interest Rates: VA loans typically offer lower interest rates compared to conventional mortgages, helping veterans and service members save over the life of the loan.
4. Flexible Credit Requirements: The VA doesn’t set a minimum credit score, though individual lenders may have their own standards. Generally, VA loans have more lenient credit and income guidelines than other loan types, making them easier to qualify for.
5. VA Funding Fee: A majority of borrowers pay a one-time funding fee (ranging from 1.25% to 3.3% of the loan amount, depending on factors like first-time use or down payment size), which helps sustain the program. Some, like veterans with service-connected disabilities, may be exempt from the fee, exempt status will be determined on the Certificate of Eligibility (COE).
6. Assistance for Financial Hardship: The VA provides support, such as financial counseling and foreclosure avoidance options, to help borrowers facing difficulties with their mortgage payments.

Required Documentation:

1. Certificate of Eligibility (COE): Proof of eligibility for a VA loan, which can be obtained through the VA’s eBenefits portal, a lender, or by submitting VA Form 26-1880 with supporting military service documentation.
2. DD-214 (Discharge Papers): For veterans, this form (Certificate of Release or Discharge from Active Duty) verifies military service history, including dates and type of discharge. Required if applying for the COE manually.
3. Government-Issued Photo ID: A valid driver’s license, passport, or other official ID to confirm identity.
4. Pay Stubs: Recent pay stubs (typically covering the last 30 days) to verify current income if employed. Active-duty service members may need a Leave and Earnings Statement (LES).
5. W-2 Forms and Tax Returns: Usually the last two years of W-2s to show income history. Self-employed veterans need last two years tax returns and other documentation, like a YTD profit-and-loss statements.
6. Bank Statements: Recent statements (typically the last two months) for all checking, savings, and investment accounts to verify assets and reserves.
7. Employment Verification: A written statement from the employer confirming job status and income, or a Verbal Verification of Employment (VOE) completed by the lender. Active-duty members may need a statement of service from their commanding officer.
8. Credit Information: While the lender pulls a credit report, veterans should be prepared to explain any derogatory marks (e.g., late payments) with supporting documents like letters of explanation or proof of resolution.

Eligibility Requirements:

1. Occupancy Requirement: Veterans must have a bona fide intention of occupying the property as their primary residence. VA loans may not be obtained for investment properties.
2. Loan Purposes: Purchase a home, refinance an existing VA-guaranteed loan for a lower interest rate, refinance an existing mortgage loan secured by a lien on a residence owned and occupied by the Veteran to a VA Cash-Out Refinance.
3. Borrower Restrictions: Only borrowers with a valid social security number are allowed, Veteran/Non-Veteran loans are not permitted (with spouse exception). Served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard after September 15, 1940. Were discharged under conditions other than dishonorable. Served either: 90 days or more during wartime, or 181 continuous days or more during peacetime.

Ready to take advantage of your VA loan benefits? Give me a call at 801-913-6502 or click here to apply online today!