What are the benefits of the VA Loan Program
Created in 1944 the VA home loan program was part of the original Servicemen's Readustments Act, better known as the GI Bill of Rights. The program was originally created to help returning service members purchase homes without needing a down payment or excellent credit. This historic program has guaranteed over 25 Million VA loans helping Veterans, active duty military members and their families purchase or refinance a home.
Benefits
- 100% Financing
- Lower credit score requirements
- More flexible debt to income requirements
- Lower Interest Rates
- Lower fees
- Assumable
- No mortgage insurance
- VA guarantees 25% of the loan obtained by the private lender
Who is eligible?
- Any active service member who serves at least 90 days active duty during wartime
- Any service member who served at least 181 days of active duty during peacetime
- Select Reserve or National Guard with 6 creditable years of service
- Surviving spouses of deceased veterans who have not yet remarried
The facts on entitlement
Every Veteran has two sets of entitlement
Basic Entitlement
- Veterans get $36,000 Max Basic Entitlement
- This is 25% of $144,000
- $0-$144,000 Sales Price will always be $36,000 entitlement used
Bonus Entitlement
- Veterans also get Bonus $181,550 entitlement IF the purchase price is over $144,000
- This is 25% of the County maximum conforming loan limit or loan amount, whichever is less
- Must purchase a hoe $144,001 +
Are there loan limits?
- With a full entitlement, there are no loan limits, so long as the borrower can quality for the loan amount
- With partial entitlement, borrowers can purchase a home that keeps combined entitlement up to $726,200 with no money down
- You can own multiple homes using your entitlement. If your amount goes over $726,200, you must put 25% of the amount above entitlement amount down.
- Once an entitlement has been restored (home sold or loan paid off), you are back to having full entitlement
Funding Fee, what is it?
The VA funding fee is a one-time payment that the buyer pays on a VA backed loan. The fee helps to offset costs for taxpayers since the loan program does not require a down payment or monthly mortgage insurance.
The following borrowers are exempt from the VA funding fee
- Surviving spouse of a veteran who died in service or from a service-connected disability
- Purple Heart recipients
- Service related disabled veterans
You can pay the VA funding fee by including in your loan or pay it in full at closing.
Serving the military members of our approved states is a great honor for the team here at Plum Creek Funding, if you have any questions about VA loans please contact a team member today.
