This Veterans Day we remember those who have sacrificed so much for our country and sometimes it feels that there is no way to effectively thank them for their incredible bravery. One of the things that bother a lot of people is the outrageous number of homeless veterans. People that once gave everything they had to protect and serve are now living in the worst conditions on the streets they vowed to protect. Now as depressing as it might seem there are many services and organizations that are dedicated to helping these veterans get back on their feet. One of those programs is the VA loan program that has backed more than 21 million loans in its 70+ year history. This program gives veterans the opportunity to afford the dream home they deserve.
During a time of tight mortgage credit, veterans and military members have flocked in record numbers to the program’s $0 down payment benefit and looser credit requirements. We have compiled a list of some must-know facts about these VA Home Loans.
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9 out of 10 Buyers Purchase with $0 Down
This means that 90% of everyone who qualified for the VA Home Loan was able to purchase a home without paying a down payment. Which is a big deal considering normally you would put down 20% of the sale price. This helps veterans get into homes now, rather than spend a few months or years saving up.
They Are Incredibly Safe
Some say there is only a reward when there is a risk, well not in this case. Despite being able to put down $0, VA loans have the lowest foreclosure rate out of EVERY type of loan out there. The VA’s common sense guidelines and commitment to keeping veterans in their homes which makes this a model for other mortgage programs.
There is NO Mortgage Insurance
Unlike FHA and USDA loans, there is no mortgage insurance premium for these government – backed mortgages. However, VA buyers do pay a funding fee that most people choose to finance. Borrowers with a service-connected disability are exempt from this fee.
Millions of Veterans are Missing Out
This is probably the saddest of them all. 1 in 3 home-buying veterans don’t know about these benefits, according to recent VA survey. Now these loans are not the best fit for everyone, but for many this is the most powerful mortgage option on the market.
Significantly Lower Credit Benchmarks
VA Lenders are typically looking for a FICO score around 620. That is often more than 100 points lower than what buyers will need for conventional funding.
Qualified veterans and service members can obtain a VA loan just two years after a bankruptcy or foreclosure. Homeowners who experience a short sale may face no waiting period at all depending on the lender and their specific situation.
There are Occupancy Requirements
This program focuses on helping veterans buy primary residences, not vacation homes or purely investment properties. Buyers typically need to occupy the home within two months of closing. There are exceptions for deployed service members and other situations.
They are NOT a One-Time Benefit
There is a pervasive misconception that you can only use this program once. That is absolutely not true. In fact, it is possible to have more than one VA loan at the same time or obtain another after losing one to foreclosure.
If you want to learn more, check out the VA Home Loans website where you can get started on your home-buying journey.