VA Loans

What Is A VA Loan?

VA Loans are backed by the US Department of Veterans Affairs and are exclusively available for veterans and active military personnel. VA home loans were created by the United States government in 1944 to help service members returning from active military service to purchase homes without the need for excellent credit scores and the requirement of a down payment. Since then this historic VA benefit program has guaranteed VA loans to help more than 22 million veterans and active duty military members purchase homes for themselves and their families by refinancing their home mortgages.

VA Loan Benefits

This unique 0% down payment home mortgage option is available to all veterans and active military service members as well as select military spouses. These VA loans are issued by private lenders and guaranteed by the US Department of Veterans Affairs.

As lenders nationwide tightened lending requirements in the aftermath of the housing market collapse, the VA mortgage benefit became more critical than ever for veterans. For many veterans and military homebuyers who find it difficult to conform with tough down payment requirements and credit standards, the VA loan has become a lifeline.

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VA Loan Requirements

As with any home loan, there is a considerable amount of information and details to review before applying for a VA loan. You are encouraged to visit the Veterans United Home Loans website to familiarize yourself with the specific requirements and benefits of this exclusive home loan benefit.

VA Loans vs Traditional Mortgages

In the United States, military homebuyers have exclusive access to one of the most unique home loan programs ever. Below are some ways in which a VA loan compares to a traditional home mortgage:

Fees and Regulations

Although a VA loan program falls under federal regulations, the government does not make loans directly available to members but instead uses private lenders to finance the loans. The Department of Veteran Affairs guarantees the loan to protect the lender against loss in the event of buyer default. This arrangement provides private lenders with the incentive to offer home loans to veterans with better terms.

Loan Limits

In most parts of the United States veterans who have qualified for a VA loan are able to purchase a home to the value of $453,100 without a down payment. However, new loan limits were instituted in 2017 that allow borrowers in higher-cost counties to purchase homes that far exceed that amount without putting any money down.

Funding Fees

Funding fees that are charged, are sent to the US Department of Veterans Affairs to fund the program and prevent any additional burdens on veterans and taxpayers, and to keep it running for the benefit of future generations of military home buyers. Fees vary depending on the circumstances of the borrower and do not apply to veterans who have service-connected disabilities.

First-time military home buyers on the VA Home Loan Program will pay a funding fee of 2.15% based on the loan amount unless you are exempt from the fee. Subsequent use of the program will require a funding fee payment of 3.3%.
Funding fees are usually rolled into the overall amount of the VA loan. The VA also assists military home buyers by limiting closing costs and allowing for sellers to pay most or all of the expenses. Many military home buyers can purchase a home without putting any money down at closing. The VA funding fee can be calculated by using a Funding Fee Calculator.

All You Need To Know About A VA Loan

The VA loan is a mortgage loan available to service members, select military spouses and veterans offering a $0 down payment. This type of loan is typically issued via private lenders and is guaranteed by the United States Department of Veterans Affairs or VA. The VA mortgage loan was developed in 1944 by the US government as a means of assisting returning military service members in buying houses without the requirement of a down payment or good credit scores.

Nowadays, the VA home loan is more significant than ever. Recently, lenders across the nation have put forward stricter lending requirements based on the housing market collapse; thereby, making the VA home loan a life line for active military and veteran homebuyers. Most of these people find it difficult to meet credit standards and make down payments when they have no credit rating to speak of.

First-time military home buyers on the VA Home Loan Program will pay a funding fee of 2.15% based on the loan amount unless you are exempt from the fee. Subsequent use of the program will require a funding fee payment of 3.3%.
Funding fees are usually rolled into the overall amount of the VA loan. The VA also assists military home buyers by limiting closing costs and allowing for sellers to pay most or all of the expenses. Many military home buyers can purchase a home without putting any money down at closing. The VA funding fee can be calculated by using a Funding Fee Calculator.

What Are The VA Loan Limits?

In certain parts of the United States, veterans qualifying for the VA loan are able to purchase a house with a market worth of $453,000 or less without any down payment. However, according to the 2017 VA loan limits, borrowers residing in high-cost states can purchase houses exceeding the specified amount without making any down payment.

What Are The Funding Fees?

The VA funding fee is given directly to the VA ensuring that the program continues for future military and veteran homebuyers; thereby, removing any additional burdens from veterans and tax payers. The fee differs based on the borrower’s circumstances and does not apply to veterans with service-connected disabilities. For instance, if you are applying for the VA home loan program for the first time, the funding fee has a typical percentage of 2.15 of the overall purchase price of the property. For any further uses of the VA loan program, the purchase percentage is 3.3 percent.

All VA borrowers are able to roll the funding fee into the overall home loan amount. It should also be noted that the loan closing costs are limited for veterans and the VA allows sellers to pay the majority of these expenses. Most of the program’s borrowers will purchase houses with no money due when the sale is closed.

VA Loan Eligibility Requirements?

In order to be considered eligible for the VA loan, the individual must be an active duty service member, a veteran, a reservist or National Guard member; as well as meeting basic service requirements as stated by the Department of Veterans Affairs.

Military member spouses who die when on active military duty or as a consequence of service-connected disability can also be eligible for the VA loan.

Of course, it is the decision of the VA to determine a person’s eligibility for the VA loan program; however, one can gain an idea of their eligibility by reviewing the basic eligibility guidelines from the Department of Veterans Affairs.

How To Apply For The VA Loan Certificate Of Eligibility?

While the VA Certificate of Eligibility is not required to begin the home loan procedure with Veterans United, the certificate is a highly significant element of the loan application. This certificate indicates your character of service and the length of service; thereby, making you eligible to receive the benefit of a VA home loan.

A person can apply for the VA Loan Certificate of Eligibility using the following methods:

– Application through a VA approved lender
– Application via on online VA eBenefits website
– Application via the postal service using a VA Form 26-1880

What Are The VA Loan Income Requirements?

Despite not needing to present any type of income threshold to utilize the VA home loan benefits, it is essential for the borrower to indicate a reliable and stable income to cover monthly expenses including the new monthly mortgage repayment amount.

Furthermore, the VA requires borrowers to maintain a specific amount of income left over after all major expenses are paid per month. This additional income is required to cover any family demands, such as transportation, food and so forth; which is referred to as residual income. The residual income is one of the primary reasons why the VA mortgage loan program remains one of the most reduced foreclosure rates among all lending options.

prodigylending.com is not a mortgage lender or mortgage bank and does not directly offer any mortgage products. This site is not an advertiser for consumer credit as defined in 12 CFR1026.2(a)(2).

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