Chapter 12 VA Guaranteed Loans

Chapter 12 VA Guaranteed Loans - Financing Residential Real...

Info iconThis preview shows pages 1–14. Sign up to view the full content.

View Full Document Right Arrow Icon
Financing Residential Real Estate Lesson 12: VA-Guaranteed Loans
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Introduction In this lesson we will cover: characteristics of VA loans, eligibility requirements, VA guaranty, VA loan amounts, and underwriting guidelines for VA loans.
Background image of page 2
Introduction VA loan program was established to help veterans finance the purchase of their homes. Offers many advantages over conventional financing.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Characteristics of VA Loans VA-guaranteed loan is made by institutional lender, but a portion of loan is guaranteed by Department of Veterans Affairs. Protects lender against losses from default.
Background image of page 4
Characteristics of VA Loans VA loans may be used to finance purchase or construction of a one- to four-unit residence. Can’t be used for investor loans. Veteran must occupy home.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Characteristics of VA Loans No downpayment required (100% financing). No maximum loan amount set by VA. No maximum income limits. Less stringent qualifying standards. Can be fixed-rate loan or ARM. No mortgage insurance required. No reserves after closing required.
Background image of page 6
Characteristics of VA Loans Lender may charge flat fee of no more than 1% of amount financed to cover cost of making loan. No prepayment penalties. Can be assumed by creditworthy buyer, veteran or non-veteran. Forbearance extended to veterans in financial difficulties.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Characteristics of VA Loans Instead of mortgage insurance premiums, VA borrowers must pay VA a funding fee to defray administrative costs of loan program. I Funding fee is percentage of loan amount. I Can be paid at closing or financed. Funding fee
Background image of page 8
Characteristics of VA Loans Regular military veteran: funding fee is 2.15% of loan amount, unless veteran makes downpayment of 5% of more. Reserves or National Guard: funding fee is 2.4% of loan amount, unless vet makes downpayment of 5% of more. Funding fee
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Characteristics of VA Loans Exempt from funding fee requirement: Veterans entitled to receive VA compensation for service-related disabilities. Surviving spouses of veterans who died in service or from service-related disabilities. Funding fee
Background image of page 10
Eligibility for VA Loans Eligibility for VA loans is based on length of active duty service in U.S. armed forces. Minimum requirement ranges from 90 days to 24 months, depending on whether service was during wartime or peacetime period. Veterans should check with the VA to determine their eligibility.
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Eligibility for VA Loans No minimum active duty service requirement for veterans discharged for a service-connected disability. Disabled veterans
Background image of page 12
Dishonorable discharge will prevent eligibility (although veterans whose discharge was neither honorable nor dishonorable are eligible). Dishonorable discharge
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 14
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/30/2011 for the course REAL 102 taught by Professor N/a during the Spring '10 term at City College of San Francisco.

Page1 / 64

Chapter 12 VA Guaranteed Loans - Financing Residential Real...

This preview shows document pages 1 - 14. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online