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VA Loan Facts
WHAT IS A VA LOAN?
The VA Loan became known in 1944 through the original Servicemen's Readjustment Act also known
as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt
and provided veterans with a federally guaranteed home with no down payment. This feature
was designed to provide housing and assistance for veterans and their families, and the dream
of home ownership became a reality for millions of veterans. The GI Bill contributed more
than any other program in history to the welfare of veterans and their families, and to the
growth of the nation's economy.
With more than 27 million veterans and service personnel eligible for VA financing,
this loan is attractive and has many advantages. Eligibility for the VA loan is
defined as Veterans who served on active duty and have a discharge other than
dishonorable after a minimum of 90 days of service during wartime or a minimum
of 181 continuous days during peacetime. There is a two-year requirement if
the veteran enlisted and began service after September 7, 1980 or was an officer
and began service after October 16, 1981. There is a six-year requirement for
National guards and reservists with certain criteria and there are specific rules
concerning the eligibility of surviving spouses.
VA will guarantee a maximum of 25 percent of a home loan amount up to $104,250, which limits
the maximum loan amount to $417,000. Generally, the reasonable value of the property or the
purchase price, whichever is less, plus the funding fee may be borrowed. All veterans must qualify, for they are not automatically eligible
for the program.
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, a condominium unit in a VA-approved project, or to purchase a unit in a cooperative (co-op), which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a
later owner fails to repay the loan. The guaranty replaces the protection the lender
normally receives by requiring a down payment allowing you to obtain favorable financing terms.
FREQUENTLY ASKED QUESTION # 5 [ -more VA Loan questions- ]
- - - - - -
Q: What can be done when both husband and wife are eligible?
A: They may acquire property jointly, but the amount of guarantee on the loan may no exceed the lesser of 40 percent of the loan amount or $36,000 ($104,250 for certain loans over $144,000).
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VA Loan Rates
for 7/02/2009
30 year fixed
-----------------
0.000 points
5.500%
5.610% APR
15 year fixed
-----------------
0.000 points
5.500%
5.686% APR
Serving the military community with personal loans from $500 to $10k.
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