VA loans are guaranteed by the United States Department of Veterans Affairs and enable Veterans to have an easier time financing their home. If you’re considering a VA loan, here’s everything you need to know about VA financing.
☆ A Veteran, active duty, or honorably discharged may be eligible for a VA loan if he/she meets the following requirements:
☆ Served 90 days of active service during wartime
☆ Serviced 181 days of active service during peacetime
☆ Has more than 6 years of service in the National Guard or Reserves
☆ The borrower is the spouse of a service member who has died in the line of duty, or as a result of a service related disability
Who Can Be On the VA Loan?
☆ A Veteran and his/her spouse
☆ VA allows Joint Loans
★ A Veteran and another person (other than spouse) will be on the loan
★ A Veteran and their spouse will both be using their entitlement
★ All Joint Loans will need to be underwritten by the Regional Loan Center for prior approval
★ Since VA requires a 25% Guaranty to be maintained on all VA loans, a down payment will be required when a Veteran and non-Veteran spouse are purchasing a home together
Seller Concessions—the Benefit of VA Loans
☆ Seller can pay 4% of concessions on top of closing costs*
★ Payment of buyers funding fees
★ Pre-payment of buyer’s property taxes and insurance
★ Payment of points to buy down rates
VA Appraisals: What Are They Looking For?
Photos Required on the Subject Property
☆ Exterior- Front and rear at opposite angles to show all sides of dwelling and street scene.
☆ Interior- Kitchen, main living room, bathrooms, bedrooms, and any other room representing overall condition, basement, attic, and crawl space, recent updates, photos of deficiencies or conditions requiring inspection of repair.
☆ Condos- Need additional pictures of common areas and shared amenities.
Types of Construction
☆ Existing- 100% complete for over a year or less than a year if it has been previously occupied.
☆ As Is- Subject to the following repairs:
★ If there is an indication of a potential environmental problem, the appraisal report must contain a requirement for correction of the problem in accordance with local, state, or federal requirements.
★ Appraiser may not recommend electrical, plumbing, heating, roofing, or any other inspections only as a measure of liability protection. An inspection should only be recommended if there is an indication of a complex problem requiring a professional opinion such as pests, site drainage, structural defects, safety concerns, code violations, etc.
☆ The appraiser should limit repairs to:
☆ Maintain safety, security, and soundness of the property
☆ Preserve the continued marketability of the property
☆ Protect health and safety of the occupants
Things That Require an Inspection
☆ Standing water against the foundation or a damp basement
☆ Hazardous materials on site
☆ Faulty or defective mechanical systems (electrical, plumbing, or heating/cooling)
☆ Evidence of possible structural failure (settlement or bulging foundation wall, cracks in the walls or foundation)
☆ Pest Infestation
☆ Leaking or worn out roofs
☆ Paint (cracking, scaling, chipping, peeling, or loose paint)
☆ Lead Based Paint constitutes an immediate hazard that must be corrected (properties built before 1978)
☆ Appliances that are to remain and that contribute to the market value opinion must be operational
☆ Freestanding appliances that do not contribute to the market value do not have to be present or in the working order
☆ Built in appliances ALWAYS must be in working order
Remaining Economic Life
☆ The remaining economic life must be at least as long as the loan repayment term (usually, 30 years).
Our nation’s heroes deserve to achieve the American dream of homeownership. VA loans are there to help make it happen.