What is a VA Direct Lender? We just answered a similar question about FHA Direct Lenders in a previous post, so I thought this question also deserved an answer. Many clients and Realtors have an assumption that the VA (Veterans Administration) underwrites and approves VA Loans for our Veterans.
The VA (Veterans Administration) does not make loans. The VA guarantees loans made by private lenders. The VA does not underwrite, approve, or fund loans. Private lenders make, underwrite, and fund VA Loans per the guidelines that VA sets for us, then sends them to VA after the loan is complete for certification of the eligibility for VA Guaranty.
The VA Guarantees loans while FHA Insures loans. Semantics really. In the end they are partnering to share the risk with lenders so that Homeowners can get Affordable FHA or VA Financing.
A Direct Lender is a Lender that originates, underwrites, and funds loans in their own name with their own monies. The loans may be sold at a later time (weeks or years). Both small mortgage banks and the big banks practice this method. Very few banks hold loans for their duration.
A VA Direct Lender is not approving your loan direct with VA, or representing VA. They originate, underwrite and fund VA Loans per VA guidelines as a Direct lender, and then submit to VA for certification of the VA Guaranty.
It is to your advantage as a consumer or Realtor to work with an experienced VA Direct Lender vs a broker, as we have more experience in writing quality VA Loans, can work faster than a broker, and offer competitive terms.
VanDyk Mortgage is a Direct Lender offering VA Loans, VA Jumbo Loans, FHA Loans, FHA Jumbo Loans, Conforming loans, and Jumbo Loans. We service California & Washington, including San Diego, Seattle, San Francisco, San Jose, Los Angeles, Riverside, and all parts in between.