THE PROCESS - 5 EASY STEPS
1) Eligibility
As with any benefit program, it must be determined
that you are eligible to participate. Your lender may
be able to obtain your Certificate of Eligibility online
through VA’s Automated Certificate of Eligibility
(ACE) system. You can apply for a Certificate of
Eligibility from the VA Eligibility Center. Just submit
your proof of service along with VA Form 26-1880,
Request for Certificate of Eligibility, to P.O. Box
20729 Winston-Salem, NC 27155.
2) Qualify with a Lender
Contact a mortgage lender to complete a loan
application. Your lender will obtain a credit report,
verify your income and help you determine what
loan amount you may qualify for.
3) Find the Home of Your Dreams
A real estate professional in your area may help you
find a home. VA cannot guaranty that the home
may be free of defects, so a property inspection is
always recommended. VA does require that the
home be safe, sanitary, and structurally sound.
Your lender will order an appraisal to determine the
reasonable value of the property.
4) Negotiate the Terms and Sign a Purchase
Contract
The seller can pay all or a portion of your loan
closing fees. The signed purchase contract should
be conditioned on the approval of your VA Loan.
5) Close the Loan
Borrower(s) will sign the Mortgage, Note, and other
related documents. Your lender, closing attorney,
or title officer will explain the terms and
requirements of your loan, including how to submit
your monthly mortgage payments.
TYPICAL CLOSING COSTS ON A
VA GUARANTEED LOAN
Origination Fee*
Discount Points
Appraisal Fee
Credit Report Fee
Prepaid Taxes and Hazard Insurance
Title Examination Fee
Title Insurance Fee
Flood Zone Determination
Environmental Endorsements
Recording Fees
VA Funding Fee
*The loan origination fee is limited to 1% of the loan
amount. The lender may charge this flat fee or
itemize the following fees not to exceed 1%:
Application and Processing Fees
Document Preparation Fee
Loan Closing or Settlement Fee
Notary Fees
Interest Rate Lock-In Fee
Tax Service Fee
Delivery/Wire Fees
Commitment or Marketing Fees
Trustee’s Fees or Charges
The seller may pay all or a portion of these fees.
This is not an all inclusive list of fees and
charges. If you have any questions concerning
fees and charges on a VA Loan, contact the
Phoenix Regional Loan Center.
Department of Veterans Affairs
VA Regional Loan Center
3333 North Central Avenue
Phoenix, AZ 85012
Website: www.vba.va.gov/phoenixlgy.htm
Toll-free number:
1-888-869-0194
Available Monday through Friday
7:30 a.m. to 4:00 p.m. MST
April 2008
A: Although they are allowed by law, most lenders
do not make construction loans for VA loans, largely
due to risks and costs of construction disputes. You
can be your own contractor, but you will have to find
your own source for construction financing. Once
the home is complete, you could then get a VA loan
to refinance the construction loan.
A: The law requires that you certify that you intend
to occupy the property as your home. Your spouse
may satisfy this requirement if you are unable to
occupy the property because of military service.
Single or married service members deployed from
their permanent duty station are considered to be in
a temporary duty status and able to provide a valid
intent to occupy certification.
Q: I want to buy a house with a VA loan. Do I need
to occupy the property?
A: VA cannot guaranty that a home is free of
defects. VA only guarantees the loan. It is your
responsibility to assure that you are satisfied with
the property being purchased. The VA appraisal is
not intended to be an "inspection" of the property.
You should seek expert advice (a qualified
residential inspection service), as necessary,
BEFORE legally committing to a purchase
agreement.
If you have a home built, VA cannot compel the
builder to correct construction defects although VA
does have the authority to suspend a builder from
further participation in the home loan program.
VA cannot guarantee that you are making a
good investment or provide you with legal services.
Q: Can I build a new home with a VA loan? Can I
be my own contractor?
Q: Can I get a loan for a home outside the U.S.?
A: You may obtain a VA loan on property in the
United States, its territories or possessions.
Q: What else do I need to know?
WHY VA?
There are several reasons a veteran should take
advantage of their VA Home Loan Benefit:
100% Financing - No Down Payment
Competitive Interest Rates
Limited Closing Costs
No Cash Reserve Requirements
No Pre-Payment Penalties
No Private Mortgage Insurance
Energy Efficient Mortgages
Fast and Easy Processing
Easy to Qualify - Flexible Credit Standards
Interest Rate Reduction Refinances Available
(No appraisal or credit qualifications required!)
VA Loans Are Assumable
VA Customer Service!
You can rely on our staff to answer any questions
you may have about the VA Home Loan process.
Whether you have a question about an appraisal or
a closing fee, we are available to provide the
assistance you need.
Even after your loan is closed, you can rely on us.
Homeowners never plan on having financial
difficulties or problems with their mortgage.
Our staff can provide assistance with repayment
plans and other alternatives to foreclosure.
With a VA Loan, you have someone in your corner.
JUST THE FACTS:
A: No, VA does not approve the majority of loans.
The majority of transactions are handled directly by
the lender with little VA intervention. VA cannot
compel a lender to make a loan that would violate
their lender policies. Lenders must also comply with
VA income and credit standards. If a lender is
unwilling to make a loan to you, we can only
suggest that you try other lenders.
A: There is no maximum VA loan limit. Lenders will
generally lend up to 4 times the amount of available
entitlement without requiring a down payment.
A: Your basic entitlement is $36,000. For loans in
excess of $144,000, to purchase or construct a
home, additional entitlement up to an amount equal
to 25% of the Freddie Mac conforming loan limit for
a single family home may be available. This loan
limit is adjusted annually and is currently set at
$417,000.
A: VA guaranteed loans are made by private
lenders, such as banks, savings & loans, or
mortgage companies to eligible veterans for the
purchase of a home. You must occupy the house
as your primary residence. The guaranty means
the lender is protected against loss if you fail to
repay the loan. The guaranty replaces the
protection the lender normally receives by requiring
a down payment, allowing you to obtain favorable
financing terms.
Q: Does my entitlement guarantee that I will get a
home loan?
Q: What is a VA Guaranteed Home Loan?
Q: Is there a maximum loan limit?
Q: How much is my entitlement?
