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Special housing-related programs are among the array of benefits the United States Department of Veterans Affairs (VA) provides to our nation’s veterans, servicemembers, and eligible surviving spouses. While the VA does not provide a home loan directly, it does guarantee a percentage of it, which allows lenders like Axia Home Loans to offer more attractive terms to eligible borrowers.
For instance, up to 100% financing is available on VA loans. That means there is no down payment required. And while other loan types require private mortgage insurance (PMI) if the down payment percentage doesn’t meet a certain threshold, VA loans have no PMI requirement. Eligible borrowers may also qualify for lower interest rates and pay limited fees and closing costs. Moreover, qualified borrowers have this benefit for life, and are able to use it multiple times for purchase and refinance transactions.
The portion of the loan guaranteed by the VA is called the entitlement. In most cases, the VA will guarantee up to 25% of the loan amount. The entitlement for eligible veterans ranges from $36,000 up to $144,000, depending on FHFA county loan limits. When used, the amount of entitlement available for subsequent loans is reduced accordingly.
VA Loans Q & A
- Can a veteran get a 100% VA Loan without full entitlement?
Yes, it’s possible, depending on how much entitlement was used on a previous or existing loan and the location of the new home loan, as loan limits differ from state to state and from county to county.
- Are veterans exempt from paying a funding fee?
Yes, under certain circumstances. Veterans who currently receive compensation for service-connected disabilities, any servicemember who provides evidence of having received the Purple Heart, or a surviving spouse of a veteran currently receiving Dependency and Indemnity Compensation may be exempt from paying a funding fee.
- What are the occupancy requirements for VA loans concerning deployments?
While the law requires VA borrower(s) to personally occupy the property as their home within 60 days of closing, there are some exceptions related to deployments. If the veteran is on active duty and is unable to personally occupy the property, their spouse or dependent child may satisfy the occupancy requirement. Active duty servicemembers are considered as meeting the occupancy requirement while deployed, even if they do not have a spouse able to occupy the property until they return.
- What is the maximum amount of sales concessions allowed on a VA loan?
4%. Sales concessions can include payoff of the veteran’s credit balances or judgements. Seller credits that pay for closing costs are not included in this 4%.
- Can two unmarried veterans or servicemembers obtain a 100% VA loan together with no down payment?
Yes. As long as both qualifying borrowers occupy the property and both use their entitlement, the VA will guarantee the loan and there will be no down payment required. If one of the qualifying borrowers does not intend to live at the property, does not have enough remaining entitlement, or doesn’t want to use their entitlement, then that individual will need to cover their portion of the 25% guaranty requirement – which is around 12.5% of the loan amount – in the form of a down payment.
Contact an Axia Loan Originator for more information about VA loans and to get pre-qualified today.
Equal Housing Opportunity. Axia Home Loans is a registered tradename of Axia Financial, LLC. NMLS 27830.