VA Home Loan Guarantees

You may be eligible for VA benefits, including home loans, if you were discharged from active duty under any condition other than dishonorable. Some benefits may be used by active-duty Servicemembers. Spouses, children, and survivors of Veterans or Servicemembers may also be eligible for VA benefits.

Buying a home using your VA loan benefits can be a frustrating and mystifying process with its highs and lows. Unfortunately, like everything connected with government transactions, the process is full of acronyms that need explanation like: COE (Certificate of Eligibility), GFE (Good Faith Estimate), APR (Annual Percentage Rate), MPR (Minimum Property Requirements) and others. All the more reason for using an experienced real estate agent and one of the VA-approved lenders that I work with.

Understand that once you earn the VA home loan benefit, it’s yours for life, not simply a one-time lending option or a program exclusively for first-time homebuyers. You can use these VA home loan benefits over and over again.

At some point in the VA loan process you will need to have your Certificate of Eligibility (COE). But don’t worry about this immediately unless it would make you feel better to obtain proof of your benefit. If that’s the case, use the VA’s eBenefits portal (https://www.ebenefits.va.gov/ebenefits-portal/ebenefits.portal).

Looking for a home to buy before you’ve got a clear idea of how much a lender is likely to extend doesn’t make sense. Hence you check with http://www.veteransunited.com/welcome-pages/va-home-loan-overview/ to get your VA loan prequalification and preapproval. As a prospective VA homebuyer with a preapproval letter, home sellers and their real estate agents will be much more welcoming.

Your credit profile will be important for your ability to get a home loan, but initially don’t worry about that either. You can get a copy of your credit report but even if it includes your credit score, a qualified lender will pull your credit score and use it in a formula weighted especially for mortgage lending.

The VA Loan Guaranty program does not set a maximum amount that the eligible veteran may borrow using a VA-guaranteed loan. Lenders may make loans to Veterans over the calculated maximum loan limit; however, lenders may require Veterans to make a downpayment in these types of transactions.

The VA released late last year its 2014 VA loan limits for the nation’s more expensive real estate markets, including Orange County. These latest VA loan limits apply to all loans closed through Dec. 31, 2014. The VA’s loan limits do not represent any kind of maximum loan amount or ceiling on how much you can borrow. There is no limit like that within the VA home loan program.

Qualified VA borrowers have two layers of loan entitlement. VA loan entitlement is basically a dollar amount that the VA promises to repay back to a lender in the event you default on your mortgage.

VA's guaranteed home loans have no maximum loan amount, only a maximum guaranty amount, which is set in law. However, lenders typically require that the VA guaranty, plus any downpayment provided by a Veteran, total 25 percent of the loan amount. As a result, an amount equal to four times the VA's maximum guaranty amount is customarily referred to as a "loan limit."

Loans for the loan limit or less are typically available to Veterans with no downpayment; loans for more than the loan limit generally require downpayments. VA's maximum guaranty amounts are established annually, and vary depending on the size of the loan and the location of the property.

The most that VA borrowers can obtain without putting money down in most parts of the country is $417,000. But in a costlier county, like Orange County, the VA has instituted higher loan limits, thereby increasing the amount qualified Veterans can borrow without having to put money down. In Orange County the VA limit for 2014 is $687,500. For more details, see:

http://www.va.gov/opa/publications/benefits_book/benefits_chap06.asp

and

http://www.va.gov/explore/home-loans.asp?gclid=CMOhkPrr4r0CFROVfgodwB0A1A