General Questions

questionsGeneral Questions

  1. Can I use my VA loan to buy a rental property?
  2. Do I have to take a fixed-rate VA loan?
  3. Am I limited to buying an existing home with a VA loan?
  4. What can I do if I lost my DD214 form?
  5. What happens if I die before paying off my VA loan?
  6. Will the VA give me help if my property is has structural problems?
  7. What is the maximum loan amount guaranteed by the VA?
  8. What happens if I file bankruptcy and want to buy another home in the future?
  9. Can I have a co-signer on my VA home loan?
  10. Does the VA Home Loan benefit cover Construction Loans?
  11. If I was discharged years ago and want to qualify for a VA loan, what forms or other documents will I need?
  12. What types of repayment options are available?
  13. Does a veteran’s home loan entitlement expire?
  14. Reservists are eligible for VA Loans, too. Who qualifies?
  15. Can a veteran get a VA farm loan?
  16. Can I build a home with a VA Home Loan?
  17. Can you take out a VA loan for a second home or vacation cabin?
  18. Can a veteran obtain a VA loan for the purchase of property in a foreign country?
  19. What is a VA-guaranteed manufactured home loan?
  20. If a borrower has used a VA loan in the past, can that person be eligible again?
  21. I am a Veteran who purchased a home with my spouse utilizing my VA eligibility. I am now divorced and my spouse was awarded the home. How do I get my eligibility back?
  22. I heard the VA has an inventory of foreclosed homes. How can I find out more about this?
  23. What service is not eligible for a VA Home Loan?
  24. My husband is 100% disabled. We need a home that is disabled friendly. Does the VA Have a loan program that will allow us to buy a home, convert it for the disabled, and have it financed through the loan?
  25. We have NO credit. Can we still get a VA Home Loan?
  26. What is the $ 36,000 Basic Entitlement about?

    1. Can I use my VA loan to buy a rental property?The idea of buying a building intended as a rental property is sound-but VA mortgages aren’t intended for this purpose. If you buy a home with a VA home loan, you must certify that you intend to “personally” live in the house. There are naturally exceptions made for houses that are in the building stages when the sale is made, but the general rule is you must occupy the house within sixty days of the loan closing. The occupancy requirement applies to all VA guaranteed loans except one; the Interest Rate Reduction Refinancing Loan or IRRRL. For these loans, the veteran is required to certify that the dwelling was previously occupied as the home.
      Furthermore, you can buy you home as a primary residence and then, afterwards, rent it out. But you cannot purchase a 2nd home with VA until that 1st one is paid off.

 

    1. Do I have to take a fixed-rate VA loan?Veterans who shop around will learn it’s possible to get a fixed rate loan, negotiated with the lender of your choice. Another option? The adjustable rate loan, where interest may be adjusted one percent annually, up to five percent over the duration of the loan period. Which to choose? No matter which way you think is best, do your homework, shop around and get the best rate possible. Some make the mistake of taking the first offer that sounds fair, but don’t be intimidated by the process. You may be eager to get the “hard part” over with and get into a home. Take some time to research the biggest purchase of your life! When in doubt, consult an expert, a legal advisor or a trusted friend in the real estate business. The more research you do, the better you’ll feel at closing time. The VA is in the business of loan guaranty, but the choice of which loan to take is strictly up to you. It’s also a good idea to look for businesses who make a habit of cultivating customers who are veterans–you may find their expertise in VA matters quite valuable to reduce unnecessary waiting times on paperwork.

 

    1. Am I limited to buying an existing home with a VA loan?A VA home loan has more flexibility than you might think. While many use this benefit to purchase existing homes, there are many other applications. Did you know you a VA home loan may be used to purchase and improve a home at the same time? You may also use a VA loan to improve your existing home by increasing energy efficiency. There is also a provision for people to use a VA loan to purchase a manufactured home and lot, under the right conditions. There are many applications for a VA home loan, sometimes all you need to do is ask!

 

    1. What can I do if I lost my DD214 form?Those who have been discharged, separated or retired should keep multiple copies of the DD214–your discharge paperwork. It’s the most important military document in your records. This is proof of your military status, whether you are retired, separated, discharged. It also displays the nature of your discharge, and what your status is with the National Guard or a Reserve Unit. The lack of a DD214 form can bring some of your VA processes to a halt, but fortunately you can get a replacement copy by writing to the National Personnel Records Center. Enclose a completed form SF-180 along with a letter stating the reason for your request, you name, rank, social security number. If you are a recently discharged military member who separated or retired at an overseas location, remember that your DD214 form may be delayed overseas for up to a year before it becomes part of the National Record Center archives. If this is the case, you contact the orderly room, First Sergeant or Sergeant Major in charge of where you separated or retired and request a copy directly from your final base.

 

    1. What happens if I die before paying off my VA loan?Unless mortgage life insurance is purchased, the responsibility of a veteran mortgage passes to the spouse or the veteran’s estate in the event of his or her death. There is a continued obligation to make payments, but don’t forget the VA’s “Leniency Policy” with regard to forbearance for qualified borrowers who fall on temporary hard times. Mortgage life insurance can take care of this issue once and for all, but it is not offered through the VA. You’ll need to find a qualified private insurance company to make these arrangements. The terms of such insurance may vary from agency to agency.

 

    1. Will the VA give me help if my property is has structural problems?The VA has a great many ways to assist those seeking a VA mortgage, but there are also restrictions. When you purchase a home using a VA home loan, the VA does not offer guarantees that your home is free from defects. While the VA does conduct an appraisal of the property, this should not be misconstrued as an ‘inspection’ or approval of the condition of the property. The VA does not order builders to correct problems or defects in the construction of your home. It’s the buyers responsibility to seek expert advice about the condition of a property before purchase. Additionally, the VA cannot offer legal counsel of any kind. The buyer is responsible for being informed about rights and responsibilities with regard to new property purchases. When in doubt, hire a lawyer or an expert in property evaluation.

 

    1. What is the maximum loan amount guaranteed by the VA?VA Home Loan Pre-Qualify2009 VA Home Mortgage Loan Limit is $ 417,000. But there are exceptions for High Costs Counties.

      The Department of Veterans Affairs’ Loan Guaranty program does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan. However, the following county “limits” must be used to calculate VA’s maximum guaranty amount for a particular county. These limits apply to all loans closed January 1, 2009 through December 31, 2009. 2010 county loan limits will be made available as soon as possible.

      The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2009 VA Limit shown below. Therefore, a veteran with full entitlement available may borrow up to the 2009VA Limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran must be reduced accordingly. Lenders should check their own investor requirements regarding guaranty amounts and down payments. Questions about VA loans in a particular county may be directed to the VA Regional Loan Center (RLC) listed for that county.

      NOTE: For all counties other than those listed below, the 2009 Limit is $417,000.

      2009 VA County Loan Limits for High-Cost Counties

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    1. What happens if I file bankruptcy and want to buy another home in the future?Veterans who file for bankruptcy are still allowed to use a VA home loan if they are eligible. Unfortunately the process does require a waiting period. You are allowed to purchase another home two years after the “discharge date” of your bankruptcy. Keep in mind that the filing date does not factor in-you must wait the two years after bankruptcy has been discharged. Once you are eligible to buy another home, the usual credit and income requirements apply.

 

    1. Can I have a co-signer on my VA home loan?It’s true that the legally married spouse of a military member or veteran can co-sign a VA loan. There is no “penalty” for doing so, the veteran loan is still fully guaranteed by the VA. Two unmarried military members are also able to co-sign on a VA loan with the same results. When a military member or veteran wants to bring an unrelated, non-military cosigner, the VA allows this with one major exception. The VA guarantee is limited to the amount of the veteran’s interest in the property. Some companies won’t allow these types of “mixed” loans, so you may have a bit of shopping around to do before finding a lender willing to work with you. If you find yourself in this position, give yourself plenty of extra time to hunt for the right lender.

 

    1. Does the VA Home Loan benefit cover Construction Loans?No, the VA Home Loan Benefit does NOT offer construction loans. However, once you build you home, you can convert your construction loan into a VA Home Loan permanent mortgage. Construction loans are generally best provided by local lenders and banks in you area. The reason is that they understand the local market and can deal with general contractors well. That’s an important featured when building a home.

 

    1. 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. Along with the Certificate of Eligibility, loan applicants will need to document their credit, savings and employment information.

 

    1. What types of repayment options are available?The guarantees thirty-year loans with a choice of repayment plans: Traditional fixed payment (constant principal and interest); Graduated Payment Mortgage, or GPM (low initial payments which gradually rise to a level payment starting in the sixth year); and in some areas, Growing Equity Mortgages, or GEMs (gradually increasing payments with all of the increase applied to principal, resulting in an early payoff of the loan). There is no prepayment penalty.

 

    1. 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.

 

    1. Reservists are eligible for VA Loans, too. Who qualifies?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.

 

    1. Can a veteran get a VA farm loan?No, except for a farm on which there is a farm residence that will be personally occupied by the veteran as a home. Other types of farm financing may be obtained through the Farmers Home Administration.

 

    1. Can I build a home with a VA Home Loan?Yes. But there are several clauses that may make this difficult to accomplish. Many veterans use their VA Home Loan Certificate of Eligibility to negotiate in good faith a private home construction loan and then refinance the completed home using VA Home Loans.

 

    1. 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 home. But it specifically provides that occupancy by the veteran’s spouse satisfies the personal occupancy requirement. However, there are no provisions for other family members. VA Home Loans are available for a variety of purposes including building, altering, or repairing a home; refinancing an existing home loan; buying a manufactured home with or without a lot; buying and improving a manufactured home lot; and installing a solar heating or cooling system or other weatherization improvements. You are also allowed to buy income property consisting of up to four units, provided you occupy one of the units.

 

    1. Can a veteran obtain a VA loan for the purchase of property in a foreign country?No. The property must be located in the United States, its territories, or possessions. The latter consist of Puerto Rico, Guam, Virgin Islands, American Samoa and Northern Mariana Islands.

 

    1. What is a VA-guaranteed manufactured home loan?A private lender makes a VA-guaranteed manufactured home loan. The VA will protect the lender against loss if the veteran or a later owner fails to repay the loan. The amount VA will guarantee is 40 percent of the loan amount or the veteran’s available entitlement, up to a maximum amount of $20,000. The guaranty amount is not the same as the amount a veteran can borrow.

 

    1. 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. 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.

 

    1. I am a Veteran who purchased a home with my spouse utilizing my VA eligibility. I am now divorced and my spouse was awarded the home. How do I get my 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.

 

    1. I heard the VA has an inventory of foreclosed homes. How can I find out more about this?The Department of Veterans Affairs (VA) acquires properties as a result of foreclosures on VA guaranteed loans. These acquired properties are marketed through a property management services contract with Ocwen Federal Bank FSB, West Palm Beach, Florida. Local listing agents through local Multi Listing Systems (MLS) list the properties. A list of properties for sale may also be obtained from Ocwen’s website at OCWEN.com. Or you can check Find VA Foreclosures

 

    1. 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.

 

    1. My husband is 100% disabled. We need a home that is disabled friendly. Does the VA Have a loan program that will allow us to buy a home, convert it for the disabled, and have it financed through the loan?Yes, the VA does have a loan program where they will allow you to finance the cost of making a home handicap accessible and friendly.

 

    1. We have NO credit. Can we still get a VA Home Loan?Yes, you can. In fact, having no credit score is OK. Okay, that’s not usual today in our modern credit society but it’s OK. So long as you you do not have a bunch of recent bad credit, a loan can be funded. If you have 0 credit, we get alternative sources for show payment history ie.. letters from landlord, utilities, car, insurance, phone bills etc…

 

  1. What is the $ 36,000 Basic Entitlement about?VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home which must be for their own personal occupancy. To get a loan, a veteran must apply to a lender. If the loan is approved, VA will guarantee a portion of it to the lender. This guaranty protects the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms. There is no maximum VA loan but lenders will generally limit VA loans to $417,000 This is because lenders sell VA loans in the secondary market, which currently places a $417,000 limit on the loans. For loans up to this amount, it is usually possible for qualified veterans to obtain no down payment financing. A veteran’s basic entitlement is $36,000 (or up to $104,250 for certain loans over $144,000). Lenders will generally loan up to 4 times a veteran’s available entitlement without a down payment, provided the veteran is income and credit qualified and the property appraises for the asking price.

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