In that vein, I’m going to mention two programs that are designed for Veterans thinking of buying a home. One program is the national VA home loan program that offers the following benefits to Veterans:
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 which must be for their own personal occupancy. To get a loan, a veteran must apply to a lender. If the loan is approved, VA will guarantee a portion of it to the lender. This guaranty protects the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms. There is no maximum VA loan but lenders will generally limit VA loans to $417,000 This is because lenders sell VA loans in the secondary market, which currently places a $417,000 limit on the loans. For loans up to this amount, it is usually possible for qualified veterans to obtain no down payment financing. A veteran’s basic entitlement is $36,000 (or up to $104,250 for certain loans over $144,000). Lenders will generally loan up to 4 times a veteran’s available entitlement without a down payment, provided the veteran is income and credit qualified and the property appraises for the asking price. Note: For properties in Hawaii, Guam, Alaska and the U.S. Virgin Islands loan limits can be up to $625,000.
VA Loans Offer the Following Important Features:
- Equal opportunity for all qualified veterans to obtain a VA loan.
- No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property).
- Negotiable interest rate.
- Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation).
- Closing costs are comparable with other financing types (and may be lower).
- No mortgage insurance premiums (PMI).
- An assumable mortgage.
- Right to prepay without penalty.
- VA assistance to veteran borrowers in default due to temporary financial difficulty.
For Veterans in California, the California Department of Veteran’s Affairs has the CalVet loan program, which features the following:
- Low interest rate
- Even lower rate for qualified first time home buyers
- Low or no Down Payment
- Loans up to $521,250
- Subsequent eligibility – Use the loan again
- Home and loan protection plans
- Home Improvement Loans