Todd Abelson: (520) 991-VA VA
Sunny Tucson, AZ










 
 

FAQs on VA Home Loans

 


 


 


Why get a VA loan over other types?

The main purpose of a “VA Insured Loan” is to help Veterans finance the purchase of a home with favorable loan terms and interest rates. This is accomplished through a few key points:
  1. The credit requirements for a VA loan are more flexible than a Conventional loan thereby allowing loans to be approved that migh otherwise be declined. This includes derogatory items with reasonable explanations, bankruptcies discharged as recently as 24 months ago and low “FICO” (credit) scores
  2. No down payment is required.
  3. No monthly Mortgage Insurance is required.
  4. High loan limits for our geography

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How can I use the VA-guaranteed financing?

  • To buy a home.
  • To buy a townhouse or condominium unit in a project that has been approved by VA.
  • To build a home.
  • To repair, alter, or improve a home.
  • To simultaneously purchase and improve a home.
  • To improve a home through installment of a solar heating and/or cooling system or other energy efficient improvements.
  • To refinance an existing home loan.
  • To refinance an existing VA loan to reduce the interest rate and add energy efficiency improvements.
  • To buy a manufactured (mobile) home and/or lot.
  • To buy and improve a lot on which to place a manufactured home which you already own and occupy.
  • To refinance a manufactured home loan in order to acquire a lot.

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Does a Veteran have to pay closing costs for a purchase?

The veteran buyer cannot pay "lender fees." The veteran can, and will be obligated to pay all other closing costs. HOWEVER, the veteran's buyer's agent can, as part of contract negotiation, request the seller to pay all closing costs including pre-paid costs and reserves.
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What is a funding fee? Do I have to pay for this?

VA funding fee is a fee added to your loan that goes to the Veterans Administration. For your first time use of a VA loan, your funding fee is 2.15% of your loan amount. For each subsequent use it is 3.3%. You will not be required to pay it if you have a service related disability of 10% or greater in which case the funding fee is waived (the 2.15% and 3.30% assume no down payment).
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What if I've used a VA Home Loan Before?

You can have previously used entitlement "restored" inorder to purchase another home with a VA loan if:
  • The property purchased with the prior VA loan has been sold and the loan paid in full.
  • A qualified veteran-transferee (buyer) agrees to assume your VA loan and substitute his or her entitlement for the same amount of entitlement you originally used.
  • The property purchased with a prior VA loan is both paid in full and still owned by the veteran, then the entitlement used in connection with that loan may be restored one time only.

Also, veterans who have used a VA loan before may still have remaining entitlement (see chart) to use for another VA loan. A veteran's maximum entitlement is $104,250, and lenders will generally loan up to four times your available entitlement without a down payment, provided your income and credit qualifications are fine, and the property appraises for the asking price. Lenders may require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less: 

Loan Amount Guaranty % Dollar Amount *Lender Amount
Up to $45,000 50% $22,500 $90,000
$45,001 - $56,250 40-50% $22,500 $90,000
$56,251 - $144,000 40% $36,000 $144,000
Over $144,000 25% $89,912 $417,000
Manufactured Home or Lot 40% $20,000 $80,000
*Lenders operate under their own regulations and guidelines in these matters

Remaining entitlement and restoration of entitlement is not automatic. It can be requested through the nearest VA office or by completing VA Form 26-1880. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full but has not disposed of the property purchased with the prior VA loan.
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What service is not eligible for a VA Home Loan?

You are not eligible for VA financing solely based upon service in World War I, Active Duty Training in the Reserves, or Active Duty Training in the National Guard. Note: Guard and Reservists are eligible if they were "activated" under the authority of title 10 U.S. Code as was the case for the Iraq/Afghanistan.
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Do all local lenders offer VA Loans?

Not necessarily. Choose a VA-approved lending institution that can handle your home loan. A lender can help you review your credit history and determine how much of a loan you can qualify for. Be aware that different lenders have different closing costs and other fees, so it pays to use an experienced and honest lender that specializes in VA loans like Todd Abelson.
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If I was discharged years ago and want to qualify for a VA loan, what forms or other documents will I need?

Everyone is required to obtain a Certificate of Eligibility. If you do not have this Certificate, you will need to apply using VA Form 26-1880 and this will require a copy of DD-214 (Certificate of Release or Discharge from Active Duty) showing character of service. Please contact us and we can help you obtain your Certificate of Eligibility.
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What can a veteran do who has lost his or her original discharge papers and does not have a legible copy?

The veteran should obtain a Certificate in Lieu of Lost or Destroyed Discharge. Any VA Veterans Benefits Counselor at the nearest VA office will assist a veteran in obtaining necessary proof of military service. Please be sure to plan extra time for this effort as it can take several months to recreate a Veteran’s service history based upon the years served.
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Does a veteran's home loan entitlement expire?

No. Home loan entitlement is generally good until used if a person is on active duty. Once discharged or released from active duty before using an entitlement, a new determination of their eligibility must be made based on the length of service and the type of discharge received.
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Are Reservists eligible for VA Loans?

Eligibility extends to members who have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and received an honorable discharge; continue to serve in the Selected Reserves. Individuals who completed less than 6 years may be eligible if discharged for a service- connected disability. In addition, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged honorably are eligible. Eligibility for Selected Reservists is due to expire on September 30, 2009.
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Can you take out a VA loan for a second home or vacation cabin?

The law requires that you certify that you intend to occupy the property as your primary residence. You are also allowed to buy income property consisting of up to four units, provided you occupy one of the units.
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If a borrower has used a VA loan in the past, can that person be eligible again?

Veterans who had a VA loan before may still have "remaining entitlement" to use for another VA loan. The current amount of entitlement available to each eligible veteran is $36,000 plus an "override" of $68,250 if full entitlement exists AND the price of the home is over $144,000. Veterans can have previously-used entitlement "restored" to purchase another home with a VA loan if: the property purchased with the prior VA loan has been sold and the loan paid in full, or if a qualified veteran buyer agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full, but has not disposed of the property purchased with the prior VA loan.
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If a Veteran purchased a home with their spouse utilizing the VA eligibility and is now divorced, How can the Veteran get their eligibility back?

When the property is awarded to the Veteran's spouse as a result of the divorce, entitlement cannot be restored unless the spouse refinances the property and / or pays off the VA loan in full or the ex-spouse is a veteran who substitutes their entitlement.
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