VA Loan and Mortgage

The US Department of Veterans Affairs has a mortgage program to help veterans purchase or build their own homes.

The government does not lend the money itself. Instead, it makes loans less risky to lenders by guaranteeing that it will repay a portion of the loan if the borrower goes into foreclosure. For this reason, these mortgages are called VA Guaranteed Loans.

The following information is adapted from the government's website on the VA Guaranteed Loan program.

• Equal opportunity for all qualified veterans.
• No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property).
• Buyer informed of reasonable value of property
• Negotiable interest rate
• Competitive closing costs
• No mortgage insurance premiums (MIP)
• An assumable mortgage
• No early payment or pre-payment penalty
• VA assistance to veteran borrowers in default due to temporary financial difficulty
• Borrow up to $417,000 in most locations, or more in high-cost areas.

• While you do not pay mortgage insurance, you do pay a funding fee, which can be financed -- split up and combined with the monthly mortgage payment. (Funding fee can be reduced with a down payment of at least 5%. Additionally, some veterans may request exemption from this fee.)
• You must meet eligibility requirements (listed below).

• Veterans
• Active duty personnel
• Reservists/National Guard members
• Qualified surviving spouses

Visit the VA website for a detailed description of eligibility requirements.