What is a VA Home Loan?

VA Home Loans – A Valuable Benefit

A VA home loan is a great benefit to military personnel during and after their service. PrimeLending understands the importance of a “home base” for military and their families and is proud to be able to help active and retired military use this product to meet their unique needs.

VA home loans are partly guaranteed (typically a quarter of loan value) by the U.S. Department of Veterans Affairs and offers the following advantages:

• No down payment
• Higher loan value
• No private mortgage insurance
• Limit on closing costs
• Option for seller to pay closing costs
• No penalty fee for early payoffs
• Possible VA assistance if you have difficulty with payments

Who is Eligible?

To obtain a VA home loan, an applicant must obtain a Certificate of Eligibility.

Chart 1: COE eligibility requirements
Qualifying Event	Active Duty	Veteran
	Any	Gulf War	24-month rule	Post-Vietnam	Vietnam
Active Duty Dates	Any	8/2/1990 – Present	9/8/1980 - 8/1/1990*	5/8/1975 - 9/7/1980**	8/5/1964 - 5/7/1975***
Qualifying Event	Veteran
	Post-Korea	Korean War	Post-WWII	WWII	Nat. Guard & Res. (Gulf War)
Active Duty Dates	2/1/1955 - 8/4/1964	6/27/1950 - 1/31/1955	7/26/1947 - 6/26/1950	9/16/1940 - 7/25/1947	8/2/1990 – Present
Active Duty Service	181 cont. days	90 total days	181 cont. days	90 total days	90 days active service
Spouse of a veteran
Unremarried spouse of a veteran dying in service or from a service connected disability Spouse of a service member missing in action or a prisoner of war Surviving spouse who remarries on or after age 57, and on or after 12/16/03**** Surviving spouses of certain totally disabled veterans whose disability may not have been cause of death
National Guard and Reserve
Six years of service in the Selected Reserve or National Guard, and 1) Honorable discharge; (2) Placed on the retired list; (3) Transfer to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after honorable service, or (4) Continued service in the Selected Reserve
Others eligible
Certain U.S. citizens with military service for U.S. WWII allies Merchant seaman with World War II service Academy cadets or midshipmen (Army, AF, Navy, Coast Guard) Certain public health service officers or officers of the National Oceanic & Atmospheric Administration Not enough service but discharged due to hardship, convenience of the government, reduction-in-force, certain medical conditions or a service-connected disability
*Officer start date: 10/17/1981 **Officer end date: 10/16/1981 *** Start date for service in the Republic of Vietnam: 2/28/1961****A surviving spouse remarried before 12/6/03 and reaching age 57, must have applied by 12/15/04 for eligibility.

Once certified, an applicant can apply to use the guaranty on these financing and refinancing opportunities:

• Purchase or build a residence
• Purchase a condominium or duplex
• Purchase and improve a residence
• Purchase a manufactured home/lot
• Refinance an existing home loan
• Install energy improvements

Qualified service members are those that have received a discharge other than dishonorable from an eligible branch of the service, including the U.S. Army, Navy, Air Force, Marines, Coast Guard, Nat. Guard and Reserve and US. Military academies. They also meet the service requirements charted below.

There is a VA Loan to Fit Your Needs

VA Fixed Rate Home Loans

A 30-year fixed rate option gives you a stable, predictable monthly payment. These loans are great for people settling down in one house over a long period of time. They give deployed soldiers a warm place to come home.

A 15-year fixed-rate option could help current service members who would like to build equity more quickly. You pay more monthly, but this pace builds more equity in your home.

VA Adjustable-Rate Mortgages

The flexibility of an adjustable rate mortgage can be appealing to current military service members expecting to move in the next few years. ARM homeowners pay a low introductory interest rate for the first few years, then move or refinance before it adjusts upward.

VA Jumbo Home Loan

The VA will guarantee a maximum of 25% on your home loan up to the conforming loan limit of $453,100. For a loan greater than that amount a VA Jumbo Loan is needed. With a VA Jumbo Loan you can apply for a home up to $1,000,000 and will only need a down payment of 25% on the difference between $453,100 and the asking price of the home.

For example, you want to purchase a home that costs $500,000. You would be required to pay 25% down on the amount over $453,100.

$500,000 - $453,100 = $46,900. Then $46,900 x 25% = $11,725. This would be your down payment. This payment is still considerably lower than the 10% traditionally required for jumbo loans.

Cash-Out Refinance Loans

A cash-out refinance helps you handle big-ticket items – college, health expenses or debt, for example. Effectively, you pay off the remaining balance and take out a new loan for the appraised value of the house. Much of the difference goes into your pocket as cash.

Interest Rate Reduction Refinance Loan (IRRRL)

An Interest Rate Reduction Refinance Loan (IRRRL) helps service members refinance at a lower interest rate. Refinancing can help lower your monthly payment, change your term or turn an ARM into a fixed rate. Other advantages include:

• No appraisal or credit underwriting
• No Income and/or asset verification
• No out-of-pocket expenses
• Rolling all costs into the new loan
• No new COE - just validation of loan