Introduction to VA Loans
VA Purchase Loans
Due to the changing mortgage environment, we are currently not offering VA construction loans at this time.
This section of the website is designed to help veterans planning to purchase or construct homes, particularly those veterans who intend to finance with VA home loans. The most important topics discussed are:
- The cost of homeownership;
- Finding a suitable and affordable home;
- The agreement to purchase the home;
- Closing the loan (final settlement); and
- Before and after moving day.
We try not to discuss the arguments for or against homeownership. It is up to each veteran to decide whether homeownership is best for his or her family.
This information does not apply to manufactured (mobile) homes. See VA Pamphlet 26-71-1 for information about this type of home. See VA Pamphlet 26-4 for details about VA-guaranteed loans.
Since the end of World War II more than 14 million veterans have bought homes with the aid of VA loans. The great majority of these veterans have bought soundly constructed homes and are now making regular payments on their mortgages as satisfied homeowners.
However, a very small percentage of these veterans have had just cause to be dissatisfied with the outcome of their venture into homeownership. It is hoped that by stressing the important things that a prospective homeowner should know, we will help to reduce the number of these cases in the future.
What VA Does for the Home Buying Veteran
VA guarantees part of your loan--which helps you to get a VA loan featuring:
- No downpayment (unless required by the lender or the purchase price exceeds the reasonable value as determined by VA); and
- Competitive interest rate and the flexibility of negotiating interest rates with the lender;
- Assurance that you can pay off all or part of the loan in advance without penalty.
- VA appraises the house to determine its reasonable value in the housing market at the time the appraisal is made.
VA requires compliance inspections in most cases on proposed new construction to see that the house:
- Meets accepted standards of good construction.
- Conforms to the plans and specifications on which VA's appraisal is based.
VA will try to assist you in getting your builder to correct any defects about which you may have valid complaints.
What VA Does Not Do
VA does not have the legal authority to:
- Act as your architect. It does not supervise construction of the house you buy.
- Guarantee that the house is free of defects.
- Act as your attorney. It cannot provide you legal services if you run into trouble in buying or constructing your home.
VA cannot compel a builder to remedy defects in construction or otherwise compel the builder to live up to a contract with you.
VA cannot guarantee that you will be completely satisfied with the house, or that you can resell it at the price you paid.
VA cannot guarantee that you are making a good investment. That is a decision which only you can make.
Do Not Be Misled
VA does not guarantee the CONDITION of the house which you are buying, whether it is new or previously occupied. VA guarantees only the LOAN. You may talk to many people when you are in the process of buying a house. Particularly with a previously occupied house, you may pick up the impression along the way that you need not be overly concerned about any needed repairs or hidden defects since VA will be sure to find them and require them to be repaired. This is NOT TRUE! In every case, ultimately, it is your responsibility to be an informed buyer and to assure yourself that what you are buying is satisfactory to you in all respects. Remember, VA guarantees only the loan - NOT the condition of the house.
If you have any doubts about the condition of the house which you are buying, it is in your best interest to seek expert advice before you legally commit yourself in a purchase agreement. Particularly with a previously occupied house, most sellers and their real estate agents are willing to permit you, at your expense, to arrange for an inspection by a qualified residential inspection service. Also, most sellers and agents are willing to negotiate with you concerning what repairs are to be included in the purchase agreement. Steps of this kind can prevent many later problems, disagreements, and major disappointments.
VA Construction Loans
- The Cost of Homeownership
- Equal Housing Opportunity
- Future Costs of Homeownership
- Finding a Suitable and Affordable Home (part 1)
- Finding a Suitable and Affordable Home (part 2)
- Finding a Suitable and Affordable Home (part 3)
- The Agreement to Purchase the Home
- Final Settlement / Closing the Loan
- Before and After Moving Day