Today is Veteran’s day, and I’m not quite sure what the appropriate greeting is. Saying “Happy Veteran’s Day” seems a bit flip, since the entire point of today is to take a moment to honor and remember the lives and sacrifices made by the members of our armed forces. Regardless of your political affiliation, I’d like to think you’d agree that there is nothing happy about the loss of life or injuries sustained by our soliders, both past and present. So while I might beÂ befuddledÂ by the appropriateÂ salutation, I’m certain that we’d all agree on the value of their service. Heck, the only surviving founder of Zephyr Real Estate is himself a Veteran – I won’t mention which war, but let’s just say it’s not recent…
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