Happy Veterans Day!
Have you served in the US Armed Forces and are now looking to purchase a home? You may qualify for special funding for home buyers called a VA Loan. This is a loan that is given through private lenders - such as a bank, credit union, or mortgage company - but is guaranteed by the Department of Veterans Affairs (VA), which will cover up to 25% of the loan amount to the lender in case of default. This helps veterans secure favorable financing terms.
The VA loan began in 1944 through the original Servicemen’s Readjustment Act, or GI Bill of Rights, signed by President Franklin D. Roosevelt.
Some distinguishing features of this loan:
- No down payment is required.
- No Mortgage Insurance is required by the lender since the loan is guaranteed by the VA (which means a lower monthly payment).
- The property must not be used to generate income.
- Must be a primary residence.
- The benefit is reusable, meaning if you sell a home that you financed using a VA loan, you can still qualify for another VA loan.
- Income and eligibility requirements must still be met to secure financing.
- There are fewer closing costs in comparison with conventional mortgages; however, there is a one-time funding fee paid directly to the VA of approximately 2% that can be included in the financing of the loan.
Overall, the VA loan is a great option for any veteran looking to purchase a home. Thank you for serving our country!