Key Benefits of VA Home Loans

The Department of Veterans Affairs (VA) home loan program continues to provide significant benefits for service members, veterans, and eligible spouses. In fiscal 2024, lenders issued 416,373 VA-backed loans totaling over $155 billion, with an average loan amount of $373,291.

VA Loan Basics
• No Loan Limits: For veterans with full entitlement, there are no VA-imposed loan limits, though lenders may have their own requirements.
• No Down Payment: Eligible veterans can secure financing without a significant down payment.
• Flexible Use: Loans can be used for purchasing homes, manufactured homes, and certain home construction projects, though mobile homes are generally excluded.

Refinance Options
• Cash-Out Refinance Loans: Eligible borrowers can refinance their home and extract cash from equity.
• Interest Rate Reduction Refinance Loan (IRRRL): Designed to lower interest rates or switch from variable to fixed rates for more stable payments.

Fees and Exemptions
• First-Time Purchase: Veterans pay a 2.15% fee for their first no-down-payment VA loan.
• Subsequent Use: Fees for repeat cash-out refinance loans rise to 3.3%.
• Exemptions: Veterans receiving disability compensation, Purple Heart recipients, and some others are exempt from these fees.

Eligibility Criteria
• World War II, Korea, and Vietnam Veterans: Those with at least 90 days of active duty during key periods are eligible.
• Gulf War and Post-1990 Service: Requires 24 months of continuous active duty or 90 days for certain discharges.
• Current Troops and Reserves: Active-duty members qualify after 90 days of service, and National Guard or Reserve members qualify after 90 days of active duty.

Foreclosure Protection
If a VA-backed loan becomes delinquent, VA provides financial counseling and can intervene with mortgage loan servicers to help borrowers avoid foreclosure. In 2024, the VA supported over 158,000 VA borrowers to retain their homes.

Getting Started
• Obtain a Certificate of Eligibility through the e-Benefits site or via your lender.
• When refinancing, ensure you evaluate lenders carefully. Be wary of deceptive advertising practices like aggressive sales tactics or misleading claims about skipped mortgage payments, which are not permitted by the VA.

Overcoming Market Challenges
In competitive housing markets, veterans may face challenges securing VA financing due to outdated misconceptions. Veterans should seek out real estate agents and lenders experienced with VA loans to improve their chances.

For additional information, please reach out today for a personalized plan to help you with your VA purchase.