VA Home Loans

KEY POINTS OF A VA LOAN

• A VA loan is a mortgage offered through a Department of Veterans Affairs program.
• Available to active and veteran service personnel and their families, VA loans are backed by the federal government, but issued through private lenders.
• VA loans have generous terms, such as no down payment, no mortgage insurance, no prepayment penalties and limited closing costs.

VA loans assist active service members, veterans, and surviving spouses to become homeowners. The individual presents a certificate of eligibility from the VA to the lender in the course of a loan application. Although some of the lender’s own underwriting requirements must still be met, in most cases, VA loans are easier to qualify for than conventional loans.

The Veterans Administration offers a home loan guaranty benefit and other housing-related programs to help qualified veterans or their eligible family members buy, build, repair, retain or adapt a home for personal occupancy. VA loans offer up to 100% financing on the value of a home. VA loan recipients do not have to be first-time home buyers. Also, they may reuse the benefits and assign the loan to another qualifying person.

The terms of VA loans are quite generous, compared to other mortgages and even other federal loan programs. Among the benefits:

• No down payment is mandated unless required by the lender, or if the residence’s purchase price is above the established property value.
• There is no private mortgage insurance premium requirement.
• Closing costs are limited and may be paid by the seller.
• The lender may not charge a prepayment penalty if the borrower pays off the loan early.
  Assistance is available from the VA to help borrowers avoid default.

VA loans, FHA loans, and other loans insured by departments of the United States government have securitization through the Government National Mortgage Association (GNMA), which is also known as Ginnie Mae. These securities carry the guarantee of the United States government.