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| Why
a Loan? |
The
more you know about our home loan program,
the more you will realize how little "red
tape" there really is in getting a
VA loan. These loans are often made without
any down payment at all. Aside from the
veteran's certificate of eligibility and
the fact that the appraiser is assigned
by VA, the application process is not much
different than any other type of mortgage
loan. And if the lender is approved for
automatic processing and the Lender Appraisal
Processing Program (LAPP), as more and more
lenders are now, a buyer's loan can be processed
and closed by the lender without waiting
for VA's approval of the credit application
or for VA to review the appraisal.
Lenders are also able to use VA recognized
automated underwriting systems, such as
Loan Prospector
and Desktop
Underwriter, to facilitate the underwriting
process. |
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More |
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| What is a VALoan? |
The VA Loan became known in 1944 through the original Servicemen's Readjustment Act also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families, and the dream of home ownership became a reality for millions of veterans. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and to the growth of the nation's economy.
With more than 25.5 million veterans and service personnel eligible for VA financing, this loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.
VA will guarantee a maximum of 25 percent of a home loan amount up to $104,250, which limits the maximum loan amount to $417,000. Generally, the reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed. All veterans must qualify, for they are not automatically eligible for the program.
VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.
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