A VA Loan program is a mortgage option that helps active service members, veterans and military families finance the purchase of homes with favorable loan terms at an interest rate typically lower than rates charged on other types of mortgages.
Although the funds will come from private lenders, this type of loan is backed by the Veterans Administration who guarantees a portion of the loan availed. It requires a low down payment and has less stringent requirements for qualification.
VA members who have contributed to any branch of service are eligible for loans under certain circumstances.
VA Loans offer the following features:
✓ No down payment, no closing cost option
✓ Negotiable interest rate
✓ Lower interest rates than conventional loans
✓ No mortgage insurance required
✓ Right to prepay without penalty
To be qualified for VA home loan services, you will need to be a veteran during wartime and certain peacetimes with the following:
- Intent to purchase or renovate a home for the reason of personal occupancy
- Satisfactory credit rating
- A valid Certificate of Eligibility (COE)
VA Loans come in different packages. Depending on your needs, you may choose to avail of one or the other:
This type of loan is good for those having a hard time getting finances from other sources and allows the purchase of a home with a competitive interest rate.
Cash-Out Refinance Loan
Cash-Out Refinancing works well for homeowners who need to pay off debts, home improvement expenses, school tuition, etc using home equity. This type of loan helps by refinancing non-VA loans and effectively turns these into VA loans (amount up to 100% of your home’s value).
Interest Rate Reduction Refinance Loan (IRRRL) or VA Streamline Refinance
The program gives you the option to get lower interest rates by refinancing existing VA loans. As a matter of fact, this type of loan requires no appraisal or credit underwriting as it simply uses the entitlement originally used for the previous VA loan.
Native American Direct Loan (NADL)
This program gives Native American Veterans and their spouses access to the Department of Veterans Affairs home loan guarantee benefit. NADL enables the construction, purchase, or improvement of homes on Federally-recognized trust land as long as the home is for personal occupancy.
At the same time, NADL offers a competitive funding fee of 1.25% and allows you to refinance another VA loan to cut down on interest for only a 0.5% funding fee.
Housing Grants For Disabled Veterans
Serving the country may involve suffering from total disabilities. To address the needs of disabled veterans and service members, the Housing Grants For Disabled Veterans program aims to support the purchase, construction, or modification of homes being done to accommodate a service-connected disability through a two grant program – SAH and SHA grants.
Specially Adapted Housing (SAH) Grant supports veterans suffering from service-connected disabilities who are living independently in a barrier-free environment.
Special Housing Adaptation (SHA) Grant supports veterans suffering from service-connected disabilities in order for them to purchase or adapt a home suited for their needs as a disabled individual.
In addition, Temporary Residence Adaptation (TRA) Grant supports veterans and service members temporarily residing in a home owned by a family member. The funds released will help with home modifications to accommodate needs arising from service-connected disabilities.
Need help deciding which type of loan is best for you? The various VA loans available will have varying interest rates and loan limits depending on the loan provider. Consulting a mortgage professional can help give you insights so you can find the packages that best fit your specific needs.
For more information on the many options available to you, feel free to send us a message and we’ll get back to you very soon.