San Diego is one of the largest military towns in the country. Our city would be nothing but a small tourist attraction if it weren't for the military bases around town. I did not realize the impact that these military families would have on my business and the overall San Diego Real Estate market until I began to serve military families in 2008.
It was March of 2008 and a lady called me saying, "I need to buy a home within 45 days!" Being that the San Diego Real Estate market had just tanked this was music to my ears. She continued on telling me that her husband is an officer in the Navy and that they were planning on using his VA loan to buy this home. I had no idea what the VA loan was at the time. I did however remember that the many loan officers before had told me that the VA loan was too difficult of a loan to do and that there were many loan programs that required much less documentation than this loan. Lets just say that many of these loan officers did not make it to see the days of a full documentation loan.
On the contrary to what these unwilling and incapable loan officers had told me, the VA loans is one of the best loans on the market period. These are some of the highlights:
- 620 minimum credit score required (Not Perfect but Not unreasonable)
- $593,750 Max sales price at 100% Financing
- No MI (Mortgage Insurance Required)
- NO Max DTI (debt to income ratio)if approved by DU or 41% DTI if manually underwritten.
- 120% Residual income needed to qualify. (Income left after all debts are Paid)
- 2.15% Funding Fee required unless buyer is >10% disabled, then there is no fee.
- 6% Max seller concessions (the seller may pay for your closing costs)
- Can use VA Loan more than once (many inexperienced loan officers will tell you otherwise)
- Need 3 months reserves if buying 2nd home
- Can be 1 day out of BK (bankruptcy)
- Must pay off all collection
The VA loan is set up to protect the Veteran from predatory lending practices and from buying a home that is in unsatisfactory conditions. The loan is set up to keep the borrowers payments low by setting a relatively low debt to income ratio. The homes that you purchase with a VA loan must be in ‘livable' condition. You are not allowed to purchase fixer upper homes with the VA loan in most cases. Also if you are looking to purchase a condominium the condo must be in a VA approved condo complex. There is a website that allows you to search for approved VA complexes. The website does not list addresses so unless you know the names of the subdivisions, contact a realtor for some help. Some neighborhoods in San Diego have more VA approved condo complexes than others. Chula Vista is an area that has a high concentration of approved complexes.
If you have any questions on how to apply for a VA loan, please don't hesitate to contact us. Happy House Hunting!
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