A VA mortgage is available to service members, veterans, and eligible surviving spouses.  It is a benefit provided and guaranteed by the Department of Veterans Affairs.  The amount that can be borrowed is determined by the Certificate of Eligibility provided by the VA.  

These loans may be for 15 or 30 years.  No down payment is required in most cases (if you have previously used your eligibility and it hasn't been fully restored, a down payment may be needed.)  The maximum loan amount is $766,550 as of January 1, 2024.

 

Benefits of a VA Mortgage Include:

•  No Down Payment - What may be the best benefit of a VA mortgage is the fact that you can borrow up to 100% of the purchase price of the home.  This is a tremendous opportunity for first time homebuyers, but anyone obtaining a VA mortgage that has the eligibility can buy with no money down whether you are a first time buyer or not. 

•  Easier to Qualify - Since the VA Mortgage program was established to make it easier for service members to purchase homes, the requirements to qualify are less strict than conventional mortgages.  Borrowers with less than perfect credit may qualify.  Credit scores as low as 620 can be acceptable.    

•  Gift Funds - If you have family members willing to gift you money, the VA Mortgage program allows for gift funds to be used to cover closing costs.  Sellers are also permitted to pay closing costs when it is a purchase transaction.  

•  Assumable - VA mortgages are assumable.  This means someone may assume your home loan when you sell, if they are eligible and qualify.  That can be a huge benefit when interest rates rise, as the low rate on your VA mortgage can be assumed by the new owners of your home.

 

Eligibility and Qualification:

Eligibility is determined by the VA.  Factors that can impact this include dates and duration of service as well as discharge status.  Eligibility does not mean you qualify for a VA mortgage; however,  you must obtain a Certificate of Eligibility (CoE) as part of the qualification process.  Some other factors considered include credit history, income, and debt to income ratios.  If you are a service member or veteran and need to obtain a Certificate of Eligibility, click here .

 

Other Considerations:

VA Funding Fee - While VA mortgages do not require mortgage insurance for loan with a high loan to value ratio like other mortgage programs, there is a funding fee payable to the VA.  The amount is determined by your CoE.  It is typically 2.15% of the loan amount and is paid at the time the mortgage loan is closed.  The percentage can vary depending upon certain factors including whether or not you have obtained a VA loan previously.  The fee can be added into the loan amount.  

 

VA Mortgage Options:

You can purchase or refinance a home using a VA Mortgage.  You can also obtain an Interest Rate Reduction Refinance, sometimes called an "IRRRL."  You can also re-use your VA Mortgage benefit to purchase a different home if you decide to move as long as you have the eligibility.