VA LOANS
A VA loan is perhaps the most powerful and flexible lending option on the market today. Rather than issue loans, the VA instead pledges to repay about a quarter of every loan it guarantees in the unlikely event the borrower defaults. That guarantee gives VA-approved lenders greater protection when lending to military borrowers and often leads to highly competitive rates and terms for qualified veterans.
Benefits of a VA Loan
A VA loan allows active-duty service members, veterans and eligible surviving spouses to finance a home with no down payment, no mortgage insurance and lenient credit requirements.
The most significant benefit of a VA loan is the borrower’s ability to purchase with no money down. Apart from the government’s UDSA’s Rural Development home loan and Fannie Mae’s Home Path, it’s all but impossible to find a lending option today that provides borrowers with 100 percent financing.
VA loans also come with less stringent underwriting standards and requirements than conventional loans. In fact, about 80 percent of VA borrowers could not have qualified for a conventional loan. These loans also come with no private mortgage insurance (PMI), a monthly expense that conventional borrowers are required to pay unless they put down at least 20 percent of the loan amount.
More benefits of VA loans:
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Down payment as low as 0%.
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Competitive interest rates that are routinely lower than conventional rates
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No prepayment penalties
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Higher allowable debt-to-income ratios than for many other loans
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Streamlined refinancing loans that require no additional underwriting
VA Loan Eligibility
Not everyone who served in the military automatically qualifies for a VA loan. Here’s what you’ll need in order to verify that you’re eligible:
MINIMUM SERVICE REQUIREMENT
According to the VA, you meet the minimum service requirement if:
For active-duty service members: you’ve served at least 90 continuous days of active duty
For veterans, National Guard members or Reserve members: you meet the active-duty requirements for your dates of service
For surviving spouses: Your spouse is a service member who is missing in action or who died while in service or from a service-related disability.
Your military service records will reflect the number of years you served in the military.
Special VA loan benefits for disabled vets
Veterans with qualifying disabilities get some additional perks when they use their VA loan benefit:
→ Funding fee exemption
→ Property tax exemptions (check with your county tax assessor for more information about the exemptions in your area)
→ Eligibility for various disability housing grant programs, including:
- Specially Adapted Housing (SAH) or Special Home Adaptation (SHA) grants, which offer up to $101,754 and $22,036, respectively, to help disabled veterans buy or improve a house they already own to make it more accessible.
- Temporary Residence Assistance (TRA) grants, which provides up to $40,983 to veterans to make accessibility alterations to a home owned by a family member.
- Home Improvements and Structural Alterations (HISA) grants, which provide up to $2,000 for veterans with non-service-connected disabilities and up to $6,800 for veterans with service-connected disabilities.
Other loan products:
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©2023 Align Financial, LLC NMLS #2320438 (www.nmlsconsumeraccess.org) 1792 Woodstock Rd Building 100 Roswell, GA 30075 (678) 916-7025. All rights reserved. Align Financial is an Equal Housing Opportunity Lender. This is not an offer to enter into an agreement. Information, rates, and programs are subject to change without prior notice and may not be available in all states. All products are subject to credit and property approval. Align Financial is not affiliated with any government agency.