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Veteran home loan programs

Veteran Mortgage Benefits to Remember

If you are an eligible military Veteran, you are eligible for a special home loan program that allows you to borrow 100% of the value of your home.

It still surprises me how many Veterans are unaware of the benefits available to them with a VA loan.

The mortgage benefit available to eligible military service members is unmatched anywhere in the industry.  No other mortgage solution allows you get into a home with no money down and no mortgage insurance.  Unheard of.

A Veteran is eligible for VA home loan benefits if he or she served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard after September 15, 1940, and was discharged under conditions other than dishonorable after either:

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  • 90 days or more, any part of which occurred during wartime, or
  • 181 continuous days or more (peacetime).

2-year Requirement: A greater length of service is required for veterans who:

  • enlisted (and service began) after September 7, 1980,
  • or entered service as an officer after October 16, 1981.

These veterans must have completed either: 24 continuous months of active duty, or the full period for which called or ordered to active duty, but not less than 90 days (any part during wartime) or 181 continuous days (peacetime).

Note: Cases involving other than honorable discharges will usually require further development by VA. This is necessary to determine if the service was under other than dishonorable conditions.

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  • Minimum 560 Credit Score
  • Debt to Income ratios per automated underwriting approval
  • Maximum 41% DTI for Manual Underwriting
  • Owner Occupied only – borrower must live in the home as a primary residence
  • Full income / asset documentation only – W2 and/or tax returns
  • No down payment required
  • No minimum borrower contribution required
  • Approved buyer assistance can be used up to 100% combined loan to value

Veteran Mortgage Facts You Might Not Know

There are a number of benefits that most people know about when qualifying for a VA loan. The 2 most popular and well known benefits include:

  • 100% Financing, No Money Down up to County Loan Limit
  • No Monthly Mortgage Insurance

Unfortunately, some real estate professionals have an unfavorable bias toward buyers using a VA home loan due to bad experiences in the past, slower turn times due to inexperienced lenders, and tighter underwriting guidelines, which no longer exist.

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Even though it is well known that VA home loans are valuable and beneficial to America’s military, the negative perception of VA financing by Real Estate Agents is also well known.  make sure your Realtor is Veteran friendly, and will fight for you when it counts.

Here are a few more benefits available to those eligible for VA financing:

Shorter Wait after Financial Hardship

VA loans require a much shorter waiting period of 2 years after a Bankruptcy, Foreclosure, or deed in lieu of foreclosure.

I have seen even shorter waiting periods in situations where the Veteran had extenuating circumstances happen outside their control.

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VA is very flexible, and tends to listen to special circumstances, and side with the Veteran if extenuating circumstances can be detailed and documented, and make sense.

You can use your VA Home Benefit more than once

If you have used your VA Home Benefit in the past, and paid off the loan, your entitlement may be completely restored so that you can use it again.

In some cases, the one time VA Funding Fee is higher for subsequent use.  If you contribute as little as 5% down payment on a VA Home loan, your subsequent use Funding Fee is cut by 54%!

Funding Fee is Waived with Service Related Disability

VA loans do not require mortgage insurance if your loan is greater than 80% of the value of the home.  In lieu of mortgage insurance, VA requires that the Veteran pays a Funding Fee that can be financed into the loan.

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If you have a service related injury, you may be exempt from paying the VA Funding Fee.

This not only saves you money when purchasing the home, it reduces your monthly loan payments because your loan was not increased to finance the Funding Fee.

Reduce Interest Rate if payments are made on-time

A Streamline Refinance is a special feature available with VA and FHA loans that do not require all of the paperwork, cost, and verifications of a typical refinance.

If interest rates have gone down, and you have made all of your payments on your VA loan on-time for at least 12 months, you can reduce your rate without an appraisal, very little paperwork, and significantly reduced cost.

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County Property Tax Waiver for Disabled Veterans

Individual Counties may have tax exemption programs in place to reduce, or eliminate property taxes for disabled veterans.

If you are a Veteran with a service related disability, contact the County Tax Assessor’s office, and your tax preparer to see if this option will save you money.

Manual Underwriting

If you are unable to get an automated underwriting approval, VA and FHA loans allow an underwriter to underwrite the loan out side of the automated system.

Manual underwriting is not offered by all lenders, and many loan officers do not have the experience to know that there are additional options.

Ask an Expert

There are many lenders out there that advertise that they specialize in offering VA loans.  The truth is, if you’re hearing about on TV, you’re not working with a mortgage professional that specializes in VA loans.

Big box VA lenders spend millions on advertisements, then push you into a call center to be processed like just another number in a long line of phone calls.

If you have questions or comments about Veterans loans, feel free to leave me a comment below.  If you need an introduction to a mortgage professional with VA loan expertise, I can help with that too!

About Your Expert

Scott Schang

A 20 year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues, and making sense of complicated real estate and mortgage topics on this website since 2007

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