Despite many common misconceptions, VA loans are one of the best loans available to veterans. There are a few situations where it makes more sense for veteran to get a Conventional loan, but that usually only applies when the veteran has a large down payment.
VA loans allow a veteran to purchase a home without having to come up with a down payment in most cases (jumbo VA loans being the exception). The guidelines allow the veteran to qualify with their spouse, but they cannot have someone that isn’t their spouse on the loan for qualifying purposes.
No down payment required (except for loans above the county limit)
MAX LOAN AMOUNT:
Depends on your county (See Limits Here)
VA FUNDING FEE:
2.15% of the base loan amount for First time VA buyers (can be financed)
3.3% of the base loan amount for Subsequent VA buyers (can be financed)
** – Reservists have a slightly higher VA funding fee (see here)
MONTHLY MORTGAGE INS.:
JUMBO VA LOANS:
These require the veteran to come up with 25% of the difference between the purchase price and the VA maximum loan limit for the county. In many cases this is still much less than if the veteran sought out typical non-VA jumbo financing.
VA guidelines give the underwriter quite a bit of discretion with regard to derogatory credit items like foreclosures, short sales, and bankruptcy. In general, below are the recommended waiting periods laid out by VA guidelines:
DERROGATORY CREDIT ITEMS:
VA guidelines generally require there to be 12 months of satisfactory payment history after the last derogatory credit item was satisfied. The guidelines specifically outline a situation where someone has a number of unpaid collections and describes the start date for the 12 month waiting period to be the date where all of the outstanding collections have been paid in full.
VA does not necessarily require isolated collection accounts to be paid, although the underwriter has discretion in determining whether collection accounts need to be paid. The underwriter will analyze whether or not the credit history meets VA guidelines and this could mean that the 12 months of satisfactory credit are not met if collection accounts haven’t been paid in full and a full 12 months of payments haven’t been made on time.
BANKRUPTCY CHAPTER 7:
2 year waiting period from the date of discharge is required. Situations where the bankruptcy is greater than 1 year but less than 2 years can be considered, but there are a number of variables to take into account. Contact one of our loan officers to see if you would likely fall into this provision of the guidelines.
BANKRUPTCY CHAPTER 13:
No waiting period required if Chapter 13 was completed successfully. If you are still in Chapter 13, you have to get permission from the court to proceed with a home purchase and you have to have been paying on the Chapter 13 successfully for 12 months or more.
In general, a 2 year waiting period from the date of sale is required. There are some situations that would allow for consideration of a less than 2 year waiting period, but you should contact one of our loan officers to see if you have a situation that might be considered an exception to the standard 2 year waiting period.
2 year waiting period from the public trustee’s certificate of purchase. There are some situations that would allow for consideration of a less than 2 year waiting period, but you should contact one of our loan officers to see if you have a situation that might be considered an exception to the standard 2 year waiting period.