Buying a House | How does this program work?

Apr 18

This is an income-based mortgage loan. Your income and last 12 months of credit history are used to determine eligibility. If you have enough income to support a house payment and the last 12 months of your credit history show mostly on-time payments, you should be able to qualify.

For service members

If you’ve served for at least 90 continuous days (all at once, without a break in service), you meet the minimum active-duty service requirement.

For Veterans

You meet the minimum active-duty service requirement if you served for:

At least 24 continuous months, or
The full period (at least 90 days) for which you were called or ordered to active duty, or
At least 90 days if you were discharged for hardship, a reduction in force, or
Less than 90 days if you were discharged for a service-connected disability

What if I don’t meet the minimum service requirements?

You may still be able to get a COE if you were discharged for one of the reasons listed here.

You must have been discharged for one of these reasons:

Hardship, or
The convenience of the government (you must have served at least 20 months of a 2-year enlistment), or
Early out (you must have served 21 months of a 2-year enlistment), or
Reduction in force, or
Certain medical conditions, or
A service-connected disability (a disability related to your military service)

Am I eligible for a VA-backed purchase loan?

You may be eligible for a VA-backed purchase loan if you meet all of these requirements.

All of these must be true:

You qualify for a VA-backed home loan Certificate of Eligibility (COE), and
You meet our—and your lender’s—standards for credit, income, and any other requirements, and
You will live in the home you’re buying with the loan

What are the benefits of a VA loan?

No down payment as long as the sales price isn’t higher than the home’s appraised value (the value set for the home after an expert reviews the property)
Better terms and interest rates than other loans from private banks, mortgage companies, or credit unions (also called lenders)
The ability to borrow up to the Fannie Mae/Freddie Mac conforming loan limit on a no-down-payment loan in most areas—and more in some high-cost counties. You can borrow more than this amount if you want to make a down payment.
Learn about VA home loan limits
No need for private mortgage insurance (PMI) or mortgage insurance premiums (MIP)
- PMI is a type of insurance that protects the lender if you end up not being able to pay your mortgage. It’s usually required on conventional loans if you make a down payment of less than 20% of the total mortgage amount.
- MIP is what the Federal Housing Administration (FHA) requires you to pay to self-insure an FHA loan against future loss.
Fewer closing costs, which may be paid by the seller

No penalty fee if you pay the loan off early

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What kind of property can I buy?

Buy a single-family home, up to 4 units
Buy a condo in a VA-approved project
Buy a home and improve it
Buy a manufactured home or lot
Build a new home

Will I have to pay the VA funding fee?

If you’re using a VA home loan to buy, build, improve, or repair a home or to refinance a mortgage, you’ll need to pay the VA funding fee unless you meet certain requirements.

You won’t have to pay a VA funding fee if any of the below descriptions is true. You’re:

Receiving VA compensation for a service-connected disability, or
Eligible to receive VA compensation for a service-connected disability, but you’re receiving retirement or active-duty pay instead, or
The surviving spouse of a Veteran who died in service or from a service-connected disability, or who was totally disabled, and you’re receiving Dependency and Indemnity Compensation (DIC), or
A service member with a proposed or memorandum rating, before the loan closing date, saying you’re eligible to get compensation because of a pre-discharge claim, or
A service member on active duty who before or on the loan closing date provides evidence of having received the Purple Heart

You may be eligible for a refund of the VA funding fee if you’re later awarded VA compensation for a service-connected disability. The effective date of your VA compensation must be retroactive to before the date of your loan closing.

You’ll pay this fee when you close your VA-backed or VA-direct home loan.

You can pay the VA funding fee in either of these ways:

Include the funding fee in your loan and pay it off over time (called financing), or
Pay the full fee all at once at closing

What is the VA minimum credit score?

The VA does not have a minimum credit score requirement, but almost all banks and lenders have an overlay. That requires a certain credit score but our lender does not have an overlay, so they do not have a minimum credit score requirement. You’re required to have the income to support a house payment and a mostly clean last 12 months of credit history.

What does it mean to clean the last history?

Clean last year means no evictions, repossessed vehicles, or defaults.

Do VA loans have a down payment requirement?

The Department of Veterans Affairs (VA) does not require a down payment for VA home loans. The down payment requirements for VA home loans vary depending on the lender. However, most lenders do not require a downpayment for a VA home loan, including myself with our VA Home Buyers Program.

Want to build a custom house?

If you want to build a custom house with VA home loans, you need a 5-10% downpayment. If you want to buy a house that’s newly constructed then you can use a VA loan with zero down. No builder will start to build a house with zero money down. It’s too risky. I do help my military families buy houses that have just been built all the time.

Can I get a VA home loan while in a Chapter 13?

As long as you’ve made 12 monthly payments on time in chapter 13, then you can buy a house. Many people are not aware that you can get a VA home loan while in chapter 13 bankruptcy. In fact, the VA home loan program is one of the few programs that will still approve your loan application even if you are currently in bankruptcy. The process of getting a VA home loan in chapter 13 is a bit different from the process for getting a loan when you are not in bankruptcy. The first step is to get your bankruptcy trustee to approve the loan. This can be done by providing the trustee with a copy of your loan application and explaining why you need the loan. Once the trustee approves the loan, you will need to work with a VA-approved lender such as myself.

Can I get a Va home loan with a Chapter 7 Bankruptcy?

You must wait 24 months from the discharge date of your Chapter 7 to qualify for a VA home loan.

Do you have a physical location in my state?

We don’t have a physical location in all states but our Realtors can meet with you at their office to discuss finding a home.

What does it mean when we say “pretty good” the last 12 months

This just means that you have not had more than a few late payments, defaults, or evictions.

What is “relatively clean?”

No repossessions or evictions in the last 12 months.

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