Miles—I hope the information below may be helpful to you. Since Bruce's death in 2007 I monitor his blog and post from time to time. He has a wealth of information here that people can still find useful.  I understand, as a loss mitigator, that lenders are tightening their guidelines. Thanks for you post.

Linda Bourgault

Here are some quick facts you may find useful concerning purchase transactions:

• VA does not have a maximum loan amount.  However, lenders do sell loans on the secondary mortgage market, so they will generally limit loans to $417,000 ($625,500 in Hawaii, Guam, Alaska and U.S. Virgin Islands) with no down payment.  With a down payment, loans may exceed these amounts.
• The veteran does have to qualify income and credit wise.
• The veteran does have to occupy the home as their primary residence.
• The veteran does not have to be a first time home buyer and may reuse his/her benefit.
• The lender, not VA, sets the interest rate and discount points, so they may vary from lender to lender.
• There is no private mortgage insurance, but VA does charge an up front VA funding fee, which may be financed.  The exception to this is that if a veteran is in receipt of VA service collect disability payments each month, he or she does not have to pay a VA funding fee.
• The seller can pay for closing costs.  There is a requirement that seller concessions do not exceed 4%, but only certain items are considered as part of the concession; i.e., payment of pre-paids, VA funding fee, payoff of credit balances or judgments on behalf of the veteran, funds for temporary buydowns (not discount points).
• The veteran is not allowed to pay for the wood destroying insect (termite) report; it is generally paid by the seller.
• VA does not approve the majority of loans.  The majority of transactions are handled directly by the lender with little VA intervention.

Hi Tylor—Here's an example how you may use your VA Eligibility:

1. Let's assume you have purchased a home for the first time using your VA Eligibility; you have lived in the house for three years; you are now PCSing to a new assignment and have you home for sale. IF your home is purchased and the purchase price pays off your loan your VA Eligiblity is clear. You can then use it to purchase another primary residence. It can not be a vacation home or an income generating property. You must live in this home as your primary residence. It is your responsiility to make certain that the VA receives the proper documentation to clear your VA benefit in order for you to receive your Certificate of Eligibility again.

You may do this repeatedly under the conditions mentioned above.

However, IF you sell your home as an assumable loan you cannot use your VA Eligibility again until that mortgage has been paid in full. Once it's paid in full you can have your VA Eligibility reinstated.

I hope that answers your question. Have a great week!

I'm Bruce's wife, Linda Bourgault, and maintain his blog, since his death in 2007, for purposes such as this.

Hi Dawnmarie—In markets that have a strong military presence lenders are still accepting VA loans. It's to the lenders advantage since VA loans are guaranteed. However, as you say, if sellers are refusing to make any concessions and holding out for best price scenario there isn't anything you can do about it.

One solution is IF your VA buyers have excellent credit and can place a minimum of 10% (up to 25%) down the seller is more likely to accept the offer and the lender will view this as a positive. Today's market, unfortunately, is reflecting a less than trusting attitude at best. Therefore, it may be best for some military people to live on base/post or rent off base/post until the market has time to stabilize. During this time they need to make sure their credit scores are high and to save as much money for a down payment as they can afford. Then, later on down the road, when they want to purchase they will be in a better position to purchase a new home.

I'm a loss mitigator and I can tell you that "trying to creatively write an offer increasing the purchase price" is NOT what a lender wants to see. This is part of the problem that created the down-turn in the market in the first place. Therefore, NOT a good idea to ever, ever use the term "creative" with buyer, seller, or lender!

I'm Bruce's wife, Linda, and maintain his blog, since his death in 2007, for purposes such as this one.