The VA loan program is available to military borrowers nationwide. Guaranteed by the U.S. Department of Veteran Affairs, VA loans work in a similar fashion as FHA loans — the VA is a guarantor of loans not a maker of them.
In general, active duty and honorably discharged service personnel are eligible for the VA program. Public Health Servants are also eligible. In addition, home buyers who have spent at least 6 years in the Reserves or National Guard are eligible, as are spouses of service members killed in the line of duty.
Bankruptcy and other derogatory credit do not immediately disqualify a buyer. If you have had a foreclosure or short sale, the waiting period to obtain a new mortgage is generally 2 years.
Funding fees are collected at closing, but no monthly premiums are required. If you have been discharged with a disability, you may be exempt from the VA funding fee.
There is no down payment required and a VA buyer can use his/her entitlement more than once and possibly even get a 100% loan if a home is currently owned and has a VA loan on it. Check with your lender about the circumstances pertaining to your situation.
The first time use charge of the VA funding fee is 2.15% of the loan amount. Subsequent use fee is 3.3% of loan amount. The lender will finance the fee into your loan. It is the only closing cost than can be directly financed into the mortgage. A seller can also pay all closing costs for a VA buyer.
And, similar to FHA loans, VA loans allow for loan sizes of up to $729,750 in high-cost areas. This can be helpful in areas such as San Diego, California; and Honolulu, Hawaii which are home to U.S. military bases.
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