Did you know that since 2001, there have been over 2.77* million United State troops deployed to Afghanistan and Iraq?
The U.S. government created a military loan program in 1944 to aid returning troops to purchase a home. The result was the VA loan. Since it was created, millions of veterans and their families have been given the opportunity to purchase a home.
Those eligible for VA loans are active troops (who have at least 90 days of service), veterans and surviving spouses.
Today, VA loans are the most ideal home loan for military personnel because the lending requirements aren’t as strict as other programs. VA loans also have many other benefits.
Some of those benefits include:
- 0% down payment
- No private mortgage insurance
- Competitive interest rates since backed by government there is a greater safety net for lenders
- Up to 6% in seller’s assist
VA loans are a little bit different from other loans in the fact that only a spouse can go on the loan with the veteran or service member. Now, that is to keep the 0% down payment.
If the veteran or service member wants someone other than a spouse on the loan with them, they can do that. However, the down payment will jump to 12.5% of the purchase price.
VA loans do have a limit for how much the loan can be. It does vary based on the county you live in or are looking to live in. Below is a map of the United States showing the different loan limits. You can visit https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limits-Map.aspx to get an interactive version of the map.
The one thing that is the same as some other loans is an upfront funding fee. The funding fee is based on whether a VA loan has been used before or not. It is determined by a certificate of eligibility (COE) which states, whether a person has used a VA loan or not. Also, the COE can say whether a person must pay the funding fee. A borrower can be exempt from the funding fee.
If this is the first VA loan taken out for a borrower, the funding fee is 2.15% of the purchase price. If it’s a second or subsequent use, the funding fee is 3.3% of the purchase price. For example, for a first time use on a $100,000 loan, the funding fee would be $2,150. For a second time use on a $100,000 loan, the funding fee would be $3,300.
*Source for statistics the Rand Corporation.