VA Lending

Question 1

Who is eligible?

Answer 1

Veteran’s entitlement to loan benefits

Question 2

How much service must a vet fulfill to be eligible?

Answer 2

24 continuous months of active duty

Question 3

Are Members or Reserves/National Guard eligible?

Answer 3

Yes, after 6 years

Question 4

Do vet spouses qualify?

Answer 4

Yes; unmarried surviving spouse also qualifies

Question 5

What documents are required?

Answer 5

Certificate of Eligibility; discharge papers (DD214)

Question 6

Is there a max loan limit?

Answer 6

No

Question 7

What is the vet’s entitlement?

Answer 7

Stated on COE; $36000

Question 8

What if the entitlement is less than $36k or missing?

Answer 8

Either it was changed by law or vet already used entitlement

Question 9

What loan products are eligible?

Answer 9

Fixed rate with temporary buy-downs; ARM product minimum 3 years with 1/5 caps

Question 10

Is there mortgage insurance?

Answer 10

No

Question 11

What does the funding fee do?

Answer 11

Helps defray costs of administering the VA program and to help cover defaulted loans

Question 12

How much is the funding fee?

Answer 12

Depends on if it has been used before and how much downpayment is. Refer to chart

Question 13

Are there usually down payments?

Answer 13

No

Question 14

Who is exempt from funding fee?

Answer 14

Those receiving compensation for service connected disabilities; purple heart recipients on active duty; Vets who receive compensation for disabilities; surviving spouses

Question 15

What fees can vets pay for?

Answer 15

Reasonable customary amounts for itemized fees and charges; 1% flat fee from lender; reasonable discount points

Question 16

What % of seller’s concessions?

Answer 16

4% of appraised value

Question 17

Is the VA strict about credit?

Answer 17

Yes

Question 18

Does child care count in the DTI?

Answer 18

Yes

Question 19

Are condos permitted?

Answer 19

Yes, but must be approved by VA

Question 20

Are PUDs permitted?

Answer 20

Yes and does not need to be submitted for approval

Question 21

Are there public water and sewage requirements?

Answer 21

Yes, mandatory hook up required by local building, planning, or health authorities

Question 22

What is the max LTV for VA loans?

Answer 22

100%

Question 23

In what 2 scenarios are standard reserves required?

Answer 23

6 months PITI for a 3-4 unit prop; 3 months PITI on each rental prop owned by vet but not secured by VA loan

Question 24

When is military employment income not considered stable?

Answer 24

Within 12 months of release from active duty

Question 25

What are compensating factors to offset income?

Answer 25

10% down payment; significant cash reserves; clearly strong ties to community coupled with non-military spouse's high income

Question 26

How much of rental income counts towards income?

Answer 26

75%

Question 27

What is the Interest Rate Reduction Refinance Loan?

Answer 27

Refinances existing VA loans to a lower rate. No appraisal, credit info, or u/w required

Question 28

When can an IRRRL have a cash out?

Answer 28

Reimbursement of energy efficient improvements; computational errors; changes in final payoff figures; upfront fees; refund of escrow balances

Question 29

What is the max loan amount of IRRRL?

Answer 29

Existing VA loan amount and late payments and charges, fees and charges, cost of energy efficient improvements, va funding fee

Question 30

What is the max loan term of IRRRL?

Answer 30

Remained of old term plus 10 years, not to exceed 30