“Are you familiar with the Vendee Program bank of America offers to buyers? It is a VA program offered on a listing I was showing a buyer and I am curious a person in your specialty has opinions on it.”

Vendee financing is a program the VA offers to help finance VA REO properties. The appeal of this is that it’s one of the rare times when a VA loan product or program is available to non-veterans.

According to the Department of Veterans Affairs, there are two terms available—a 15-year and 30 year fixed rate loan, with terms that include 0% down if the property is an owner occupied purchase. The loan can be increased to include closing costs, but the funding fee may NOT be financed.

For non-owner occupied purchases, at least 5% down is required and the VA states “Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment.”

Regardless of whether the purchase is classified as an owner occupied or not, this type of home loan is not what the VA calls a “credit score driven product” but for non-owner occupied purchases, the Department of Veterans Affairs stipulates investors must prove they have experience in property management in order to include estimated rent amounts as income in the financing paperwork.

For qualified investors, a big part of vendee financing’s appeal is the fact that there are no limits on the number of properties you can buy under the program—if there’s a list of properties available under vendee financing, you can apply to buy as many as you’re able to invest in.

Again, this program applies to properties in the VA’s inventory of foreclosed homes only. The details sound great to many, but there are a few caveats to be aware of which I will include in my next blog post.