VA Loan Benefit Basics: VA Loan Guaranty and Interest Rates - 05/31/11 09:17 AM
In part one of this post, we discussed the VA loan program, down payments and the difference between what the VA allows for no-down-payment VA mortgages and what the lender may need to meet secondary market requirements. There are other basics a first time borrower should also know–borrowers in the early stages of researching a loan often need additional details about the nature of the VA loan program and how it works.
The term “VA loan” is a bit of a misleading one; the Department of Veterans Affairs does not lend money to veterans, instead it insures the loan offered by … (3 comments)

Your VA Loan Benefit: The Basics - 05/31/11 09:08 AM
VA loans are a benefit for military veterans and currently serving soldiers, sailors, airmen, and marines. While the Department of Veterans Affairs places a minimum time-in-service requirement in order to be eligible for the loan, once that time-in-service milestone has passed the borrower must meet additional qualifications. Being eligible to apply for a VA home loan is not the same as being approved for one.
The approval process includes a look at credit history, employment and other factors that show whether or not the applicant is a good credit risk for a VA insured loan. VA loans are not driven by … (1 comments)

Special Thanks To Our Men and Women In Uniform On Memorial Day - 05/30/11 10:11 AM
Today, there’s no advice about VA loans or words of wisdom about VA benefits; instead we wanted to take a moment to honor Memorial day and post a simple message of thanks for our men and women in uniform.
Every year, there are news stories, commentary and discussion about the nature of Memorial Day. Someone always manages to ask about who Memorial Day is supposed to honor. Last year someone asked directly, “Is it to remember the dead, or is it meant to be a day of appreciation for everyone who wears or has worn the uniform?”
Such a simple question, with a … (2 comments)

A VA Loan Option Active-Duty Military Should Know - 05/27/11 11:11 AM
One of the first things a first-time home buyer learns about VA loans is the occupancy requirement. VA rules state the buyer must purchase the home to use as a primary residence, otherwise the loan cannot be approved.
Current military members usually don’t have a problem meeting this requirement when they purchase the home, but what happens if the borrower gets re-assigned to another military base later on?
Moving to a new duty station would definitely put the borrower in a position where they must sell the home or be in violation of the primary residence rule, but VA regulations provide … (2 comments)

VA Announces Help For Veterans Affected by Missouri Tornadoes - 05/27/11 11:04 AM
The Department of Veterans Affairs has made a lot of disaster relief announcements in the spring of 2011. So many that the Department of Veterans Affairs has released a “generic” announcement directing vets in need of help in the wake of natural disasters.
“If you have been affected by the recent natural disasters, which includes tornadoes, flooding, and wild fires throughout different parts of the country, please review VA’s information on Natural Disaster Assistance.” The link to that publication is http://www.benefits.va.gov/homeloans/docs/va_policy_regarding_natural_disasters.pdf. The announcement directs people to their nearest VA Regional Loan Center or the VA toll-free hotline: (877) 827-3702.
The latest … (1 comments)

VA Minimum Property Requirements--What the VA Rules Say - 05/26/11 11:11 AM
One of the most important parts of the VA home loan process is the VA appraisal. Borrowers choose a property they are serious about buying, complete loan paperwork, and get ready to commit to the loan. As part of this process, a VA appraisal is required to establish fair market value of the property.
Only when that fair market value is known can the lender and the VA establish a loan amount for the transaction. But the VA appraisal doesn’t just assign value–it’s also intended as a review of the property to make sure it lives up to VA minimum property … (2 comments)

The VA Loan Credit Application and Supporting Documentation - 05/25/11 10:05 AM
The Department of Veterans Affairs has strict rules for lenders when it comes to approving a VA loan application. One set of instructions to VA approved lenders includes a list of items to require or check when underwriting the VA loan.
In the past some borrowers went into default or foreclosure because of factors or circumstances the lender should have caught at loan processing time. Now, the VA requires its lenders to learn from previous examples and exercise due diligence in a variety of areas.
Knowing some of these factors as a borrower can help avoid delays or rejection of a … (1 comments)

VA Loans: What Are Compensating Factors? - 05/25/11 09:45 AM
Veterans who apply for VA home loans may worry about their ability to qualify because of credit ratings, debt-to-income ratio, or other factors. Some worry without reason, others know they have higher debt loads but aren’t sure what the VA’s tolerance for debt might be. Even knowing that the debt-to-income ratio rule is generally 40%, knowing how that percentage is arrived at can be a mystery.
There’s a good reason the VA doesn’t go by the debt-to-income ratio alone when it comes to judging the creditworthiness of a VA mortgage loan applicant; there may be what the VA terms “compensating factors” … (1 comments)

VA Loans and Land Purchases - 05/24/11 10:23 AM
A typical house in the suburbs is what many first-time home buyers may picture when thinking about buying a home using a VA insured mortgage. But the Department of Veterans Affairs respects the great diversity in the real estate market–there are many options available when choosing a new home and VA loans are designed to allow borrowers to consider those options.
For example, the VA will guarantee a home loan for a home that hasn’t been built yet. A construction loan covers this situation and addresses issues common to having a new home built from scratch as opposed to purchasing an … (1 comments)

VA Loan Employment Verification - 05/24/11 10:15 AM
When a military member or veteran wants to apply for a VA insured home loan, they must submit a variety of personal data including credit information, a history of current and past residences, and a record of employment. When the application is submitted to the lender, the bank can’t simply accept what’s written on the forms–the lender is required to verify this information with the appropriate agencies.
For credit, the lender may contact credit card companies and other creditors in addition to requesting a copy of the borrower’s credit report. When it comes to prior residences, the previous landlords may be … (1 comments)

VA Cash-Out Refinancing Loan Basics - 05/23/11 10:19 AM
There are a variety of options VA borrowers have when it’s time to consider refinancing a home loan. One of those options is the VA cash-out refinancing loan. Those who have examined this option in the past may not be aware of changes to the cash-out refinancing loan program; VA rules once limited these loans to 90%, but since the Veterans’ Benefits Improvement Act of 2008, cash-out refinancing can now be made for up to 100% of the value for qualified borrowers.
For those unfamiliar with the VA cash-out refinancing program, this type of VA insured loan refinances “any type of … (1 comments)

How the Lender Examines Your VA Loan Applicatio​n Data - 05/20/11 09:31 AM
When a vet or current military member fills out an application for a VA home loan, there are a lot of requirements-the borrower must provide income data, residency information (past and present), answer questions about occupancy intent and submit to a credit check. Getting approved or pre-approved for a VA insured mortgage means providing a lot of detail, but what is the lender looking for with all that information and how does the lender view what is submitted?
VA rules for lenders processing a VA loan application include a set of objectives the lender must meet. Those objectives include verifying that … (1 comments)

Refinancing a Delinquent VA Home Loan - 05/20/11 09:30 AM
VA borrowers who get into trouble with their VA mortgages have several options if they act quickly and don’t allow their VA loans to become seriously delinquent. The Department of Veterans Affairs encourages borrowers to anticipate financial trouble, get in touch with the VA and the lender when it becomes clear that financial difficulty is coming, and to take decisive action.
One reason for the need to act quickly is that the VA may allow the homeowner to refinance a delinquent VA mortgage using an Interest Rate Reduction Refinancing loan. The VA and lender may be able to work together with … (1 comments)

What Is A Subsequent Use VA Loan Funding Fee? - 05/19/11 08:56 AM
Veterans who want to use their VA home loan benefits are required to apply for a Certificate of Eligibility from the Department of Veterans Affairs. This certificate, also known as a COE, shows the lender the borrower is indeed approved to use a VA insured loan entitlement, and how much entitlement is available.
The application may be submitted online or via mail. Online applications can be filled out at https://vip.vba.va.gov/portal/VBAH/Home
The COE should not be confused with VA loan approval. The lender must verify that a borrower has the appropriate credit, employment and ability to pay based on a debt-to-income ratio; … (2 comments)

VA Loans: Local Requirements For Connecticut, Delaware, District of Columbia and Florida - 05/18/11 09:33 AM
In recent blog posts we’ve discussed the local requirements properties must meet in order to be considered for a VA home loan. When a VA borrower wants to purchase a property with a VA insured mortgage, the home must be appraised and assigned fair market value before the loan can be approved.
A VA assigned appraiser looks over the property to make sure it meets VA minimum property standards plus any local requirements as spelled out by city codes or other regulations. Any condition observed that does not meet the local requirements must be corrected before the loan can be approved.
… (1 comments)

Claiming Exemption From the VA Loan Funding Fee (Part Two) - 05/17/11 10:25 AM

In our previous blog post we discussed who is exempt from paying the VA loan funding fee and how to apply for exempt status. Disabled vets receiving or entitled to receive VA compensation for their condition are exempt, as are the surviving spouses of vets who died on active duty or from service-connected medical conditions.
A borrower who does not have their exempt status documented yet must fill out and submit VA Form 26-8937, Verification of VA Benefits as soon as possible. The lender needs this form to verify the borrower’s exempt status.
But the VA has some exceptions in VA funding fee … (2 comments)

How to Claim Exemption from the VA Loan Funding Fee (Part One) - 05/17/11 10:14 AM
Veterans have plenty of VA benefits, including the GI Bill, VA medical care, and VA home loans. One of the most important VA home loan benefits some veterans are entitled to, besides the loan itself, is exemption from the VA loan funding fee for disabled vets.
The funding fee is a percentage of the VA home loan, so it’s easy to see why anyone entitled to the exemption should take advantage of it. But who is considered exempt and how do you qualify for the VA loan funding fee exemption?
Disabled veterans getting compensation from the VA, and those entitled to such compensation are … (3 comments)

VA Advice for Veterans Affected By Recent Natural Disasters - 05/16/11 10:02 AM
The Department of Veterans Affairs has some good advice for veterans and current military members affected by the recent disasters that have hit Alabama, Arkansas, Georgia, Mississippi, and Tennessee.
Naturally the advice applies to anyone facing the same kinds of difficulties, but VA bulletins have been released in the wake of the recent storms, tornadoes, and floods in these areas.
One of the most important things a VA borrower can do in the wake of a natural disaster is to contact their lender as soon as possible to discuss any damage or loss. The VA reminds borrowers, “You are not excused from making … (1 comments)

More VA Grant Information for Disabled Vets - 05/13/11 10:37 AM
If a disabled veteran wants to purchase a home with a VA loan, why should they be limited to searching for a property that already has access features installed? Fortunately the VA has several grants and programs to assist disabled vets in modifying a home to make it more accessible.
In our last blog post we discussed some of these VA benefits and grants for disabled veterans. On such grant is the Specially Adapted Housing Grant, also known as a VA 2101(a) grant.This VA benefit is meant  to offset the cost of specially adapted housing for qualified disabled veterans.
According to VA requirements, a qualified recipient is … (2 comments)

VA Loan Benefits and Grants for Disabled Vets - 05/13/11 10:25 AM
We’ve had several recent questions concerning VA home loan benefits for disabled veterans. There have been changes, modifications and improvements to a wide variety of VA loan and grant programs for disabled vets in recent years, including modifications to the VA funding fee exemption policy and new programs established for eligible disabled veterans.
The VA loan funding fee exemption is an important benefit for disabled veterans. At one time, four categories of people were qualified to be exempt from paying the VA funding fee. New rules add a fifth. Under the old rules,  those receiving VA disability benefits, anyone entitled to get those benefits or received VA disability benefits in the past were exempt from … (1 comments)

VA Loan Options: Adjustable Rate Mortgages, Graduated Payment Mortgages and More - 05/12/11 10:30 AM
House hunters looking to purchase a property with a VA insured loan have a variety of options to choose from when it comes to the type of loan. In general, there are five types including the traditional “fixed payment” VA loan, a growing equity home loan, VA adjustable rate mortgages (ARM) and something called a hybrid ARM, plus a graduated payment VA insured mortgage.
The first type mentioned, the traditional fixed payment loan, comes with a set interest rate which is fixed and does not change. The rate is negotiated between borrower and lender and provides predictable VA home loan payments that should not … (1 comments)

VA Appraisals, NOV Expiration Dates, and Appraisal Fees - 05/11/11 10:36 AM
In recent blog posts we’ve discussed the role of the appraisal in buying a home with a VA insured mortgage. The Department of Veterans Affairs won’t issue a loan amount until VA appraiser has reviewed the property and a Notice of Value has been issued to establish the fair market value of the property.
VA rules allow the lender to charge the borrower for this appraisal as it’s a typical cost of doing business when purchasing a home. VA rules cover how much can be charged (the appraisal fee must be reasonable and customary according to typical charges for similar services in the … (3 comments)

VA Home Loan Deadlines and Replacement DD214 Processing Times - 05/11/11 10:06 AM

One reason the Department of Veterans Affairs encourages people to start planning ahead for a VA loan application (at least a year in advance) is because in some cases the borrower may realize there is some additional work to do in order to prepare for a VA mortgage loan application.
For example, credit reports could have erroneous information which needs to be corrected (a process that can take several months or longer) or the veteran could be missing important paperwork that is required for the VA loan application.
One such piece of paperwork is the DD Form 214, which is a report of discharge for … (1 comments)

VA Requests Moratorium on Foreclosures on Homes Hit by Tornadoes - 05/10/11 10:45 AM
The Department of Veterans Affairs is reaching out to VA-approved lenders in the wake of a high number of tornado outbreaks in the U.S. According to the VA official site at VA.gov, “VA encourages holders of guaranteed loans to extend every possible forbearance to borrowers in distress as a result of the recent tornado outbreaks.”
The VA also has some guidance for lenders about using such forbearance, stating “Careful counseling with borrowers should help determine whether their difficulties are directly or indirectly related to these storms, or whether they stem from other sources that must be addressed.”
Federal law allows lenders to prevent … (1 comments)

Facts On VA Jumbo Loans For Real Estate Agents and House Hunters - 05/09/11 12:22 PM
A VA Jumbo loan is defined as any VA insured mortgage loan exceeding $417,000. The Department of Veterans Affairs will insure a VA loan for 25% of the maximum loan limit as established by county. Typical VA home loans max out at $417,000, but some housing markets are more expensive and have higher VA loan limits. The VA still offers no money down VA loans in these counties even though the maximum loan exceeds the typical $417,000.
The VA Jumbo Loan is a way for borrowers who live in high-cost counties to get the same kind of VA mortgage as those living in more typically-priced housing markets, with allowances made for the higher cost of buying … (1 comments)

Local Requirements for VA Appraisals: Arizona, Arkansas, California and Colorado - 05/09/11 07:53 AM
As part of our ongoing series on local requirements for appraisals for VA home loans, we’re examining local requirements by state in Arizona, Arkansas, California, and Colorado. The VA-assigned appraiser must not only note any condition that doesn’t meet the Department of Veterans Affairs minimum property requirements, but they must also note conditions that do not meet local requirements such as the ones listed below.
These local requirements can change or be modified based on changes in the law, local building code requirements or other factors. When it comes to these local requirements, VA regulations state, “VA offices may instruct fee appraisers to list, when … (1 comments)

VA Insured Loans and Natural Disasters (Part Two) - 05/06/11 08:48 AM
News headlines in the spring of 2011 include much talk about the natural disasters affecting Alabama, Georgia, Mississippi, and Tennessee. In previous blog posts we covered the VA policies regarding VA insured loans and what can be done to help borrowers in distress as a result of natural disasters. But what about those who were in the process of getting a VA loan when the natural disaster hit?
The government has rules that cover what options are available to loan applicants. The VA official site includes the following;
“When the President declares a disaster, lenders and servicers must check with the Federal Emergency … (1 comments)

VA Loan Facts: Natural Disasters - 05/06/11 08:28 AM
Natural disasters in Alabama, Georgia, Mississippi, and Tennessee have affected many veterans, including those interested in or currently holding VA mortgages. For vets with current VA home loans, the Department of Veterans Affairs has issued guidance and recommendations to lenders to encourage relief and assistance in any situation where a natural disaster could affect a borrower’s ability to pay the VA loan or occupy the property.
According to the VA official site, “VA encourages holders of guaranteed loans in disaster areas to extend every possible forbearance to borrowers in distress through no fault of their own.”
That distress would of course include natural disasters. The VA … (2 comments)

VA Home Loans: Why Can’t I Get My VA Loan Eligibility Restored? - 05/05/11 10:31 AM
Some veterans use their VA home loan benefits to purchase a house without looking down the road. In the excitement of that first home purchase borrowers aren’t contemplating selling the home and purchasing another house, but circumstances can change, families grow and the house that seemed almost too large on closing day could become very small over time.
When it’s time to buy a new home with a VA insured mortgage, what does the borrower need to know about eligibility for that next loan?
There are several circumstances where a borrower would need to get VA home loan eligibility restored, allowing the veteran … (1 comments)

Local Requirements for VA Appraisals: Alabama and Alaska - 05/05/11 09:44 AM
As mentioned in previous blog posts, the VA appraisal process is one of the most important parts of buying a home with a VA mortgage.
Until the appraisal is complete and the Notice of Value is delivered, the deal cannot close. The VA appraiser is responsible for making sure the property lives up to VA minimum property requirements and any local requirements as listed by the Department of Veterans Affairs.
As part of an ongoing series, we’re examining local requirements by state. VA appraisers must note any condition that doesn’t live up to these local requirements, which are subject to change depending on current law, building codes or other factors.
The VA rules for local conditions includes, “VA offices may … (1 comments)

VA Jumbo Loan Facts - 05/04/11 11:04 AM
Recently we discussed the VA Jumbo Loan, which is defined as any VA home loan that exceeds $417,000 for VA loans with no money down. The Department of Veterans Affairs has identified 17 states where the county VA loan limit is higher than the typical $417 thousand limit in other states.
In these areas veterans are not expected to settle for what might be considered inferior housing just because the market is more expensive. The VA Jumbo Loan is a way for qualified borrowers to purchase suitable homes in markets where the loan limit can be much higher–above $1 million in some cases.
What does a borrower need to … (1 comments)

What is a VA Jumbo Loan? - 05/03/11 09:15 AM
When a borrower applies for a VA insured home loan, there are several factors that go into calculating how much the loan will be. One factor is the home’s fair market value. Another is the VA loan limit set by county. According to the VA official site, “The maximum guaranty amount (available for loans over $144,000) is 25 percent” of each year’s VA loan limit.
A qualified VA loan applicant with a full entitlement can borrow up to the county limit–usually up to $417,000–and the Department of Veterans Affairs will guarantee 25 percent of the loan amount. But homes located in … (1 comments)

VA Loan Fee Rules and Requirements - 05/02/11 09:49 AM

The Department of Veterans Affairs has a set of rules governing what fees the borrower is permitted to be charged as part of the cost of getting a VA insured home loan. Similar types of rules are in place for other government-backed home loan programs such as FHA mortgage loans, but when it comes to VA rules, the guidelines are a bit different in intent. FHA loan rules regarding fees are designed to protect the borrower, but there’s an extra dimension to the VA regulations according to the VA loan rulebook.
“The VA home loan program involves a veteran’s benefit.  VA policy has evolved around the objective of helping the veteran to use his … (1 comments)

VA Loans: What Makes a Property Ineligible for a VA Home Loan? - 05/02/11 09:41 AM

When a buyer finds a suitable property, before he or she can be approved for a VA home loan the house must be appraised to determine fair market value and make sure it meets minimum property requirements.
When the appraiser takes on an assignment to look over such a property, the first order of business is for the appraiser to determine the nature of the property as new construction, existing construction, or proposed/under construction. Depending on which type of property it is, the way the home is appraised may vary.
Once the type of property has been established, there is a list … (1 comments)

 

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