It’s finally spring – a time for spring cleaning, dusting off those softball cleats and for some, looking for a new place to call home. The months of April, May, June and July typically account for more than 40% of all home purchases each year.
The VA home loan guaranty program is one of VA’s most utilized benefits. VA guaranteed more than 530,000 home loans last year, helping those Veterans and Service members across the country – from Guam in the Pacific to Puerto Rico in the Atlantic – find a place to call home. In 2012, VA guaranteed its 20 millionth home loan and 2013 is on track to be the biggest year in the history of the program dating back to 1944.
Here are a few things to keep in mind when using your VA Home Loan benefit:
Work with your Realtor
Most American families purchase only a few homes in their lifetimes. Your Realtor is an expert on finding and purchasing a home in your local area. VA has worked closely with realtors since the home loan program started in 1944. Use them as a resource to help you navigate the entire process, including accessing your VA home loan benefit.
What does the VA home loan guaranty benefit include?
Most VA Home Loans are handled entirely by private lenders. VA establishes minimum guidelines in order for Lenders to offer the program. VA guarantees a portion of the loan, which allows lenders to provide VA Home Loans to as many Veterans as possible with some of the most attractive terms in the industry. These terms include:
• A little or no down payment as long as the sales price doesn’t exceed the appraised value. In 2012, 89 percent of all VA loans had no down payment.
• No private mortgage insurance premium requirement. This saved Veterans who obtained VA loans last year $19 Billion over the life of their loan.
• VA rules limit the amount and type of charges that a Veteran will pay for closing costs. In addition, there are no prepayment penalties.
• VA maintains minimum property requirements that protect Veterans to help ensure the dwelling is safe, sound, and sanitary. An example of this requirement would be “no exposed wiring” in the home.
Where do I start?
1) Determine your eligibility in the program by getting your Certificate of Eligibility (COE), VA’s validation to the mortgage lender that you are eligible to receive the VA Home Loan benefit. You can yet yours one of three ways:
- eBenefits.va.gov – Veterans registered on eBenefits may log on and request their COE online, 24/7.
- Mortgage Lender – with this option, a lender requests a borrower’s COE from the VA directly using our Automated Certificate of Eligibility system.
- Eligibility Center – Veterans may mail applications for a COE to the Atlanta Eligibility Center or call toll-free at 1-888-768-2132.
2) Check out our Home Loans website to learn more.
3) Connect with a local realtor to help you navigate the home buying process from start to finish
4) Speak with several lenders to find one that offers a loan product that best meets your needs
We are here to help
You are not alone. A third of VA’s Home Loan program staff assist Veterans who have a VA-guaranteed loan and are experiencing financial hardship. These employees are based in offices across the country and serve as liaisons between Veteran borrowers and their mortgage servicers. If you need help – call 1-877-827-3702 and we will assign an individual loan technician to help you understand your current situation and work with your loan provider to explore potential options that may allow you to keep your home.
Adapting a home for your use
For certain severely disabled Veterans, VA offers grant funds to ensure independent living through modification, purchase, or home construction. Specially Adapted Housing grants can be used for renovations including: ramps, walkways, bathrooms, kitchens, handrails, grab bars and sliding doors.
For more information on VA’s home loan benefit, watch the recent Google+ Hangout with Mike Frueh, director of VA’s home loan program.
Samantha O’Neil is a communications specialist with the Veterans Benefits Administration.