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The VA Loan, A Must-Use Military Benefit

The VA Loan

The VA Loan, A Military Benefit You Should Use

As a service member or veteran, you have a very important military benefit you can use to help your family, the VA loan. The VA Home Loan program has been available for more than 75 years now. And can be a good way to get into a home of your own.

About the VA Loan

The VA Home Loan program started in 1944 as a part of the original Servicemen’s Readjustment Act. The goal of the VA loan was to level the playing field for those who served our country during WWII.

The loan can be used to buy, build, or refinance a home. It can save the veteran or service member a lot of money and allow them to purchase a home before they might otherwise be able to do so.

Finding a Good Realtor

A good real estate agent knows the area well and can offer advice on what is typical in that real estate market and whether there are known issues with poor weather, natural disasters, or related issues.

A good real estate agent will help you decide the size of the home you need based on your current goals and needs. They can also help you find a home that is specific to your needs; do you need nearby childcare, schools, or other services? A real estate agent can help you prioritize your house hunt.

No Down Payments

One of the benefits of a VA loan is that you don’t need a down payment in typical cases. You may need a down payment if the sales price is higher than the appraised value of the home or if you want to lower the amount of the VA loan funding fee (see below.)

VA Loan Limits

As of January 1, 2020, the Blue Water Navy Vietnam Veterans Act of 2019 made changes so that there will no longer be loan limits for those with 100% VA loan entitlement.

VA Loan limits are the maximum amount of money you can borrow using a VA-backed loan without having to pay a portion of the home’s total sale price upfront, which is the down payment. The limit is not a cap on how much you can actually borrow. This change allows veterans and service members in higher-cost markets to buy the home of their choice, no matter the price, without needing a down payment.

There are loan limits for those with more than one active VA loan, those with only partial entitlement available, and those who have defaulted on a previous loan.

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VA Funding Fee

The VA loan funding fee is required for typical transactions. It is calculated as a percentage of the loan amount. The VA loan funding fee is higher for those on their 2nd or subsequent use of the benefit.

If you make at least 5% of a down payment on your loan, your funding fee will be lower, which is a good incentive to make a down payment. Veterans who receive VA compensation for a service-connected disability do not have to pay the funding fee. And, as of 2020, active duty service members who have received a Purple Heart can avoid the fee as long as they close on a home while still on active duty.

Other VA Loan Tips

  • There is no VA-required PMI (private mortgage insurance.) This is true even if you don’t have a down payment, or your down payment is less than 20%.
  • You can use your VA loan benefit multiple times.
  • Your VA loan benefit doesn’t expire, but if you use it you may need to apply to have your entitlement restored to use it again.
  • Don’t be afraid to ask questions about your VA loan, before, and during the process.

The VA loan is a benefit you should use if you qualify for it. You can use it at your next duty station or on a forever home. The VA loan will allow you an easier path into homeownership.





About the author

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Julie Provost is a freelance writer, and blogger. She lives in Tennessee with her National Guard husband and three boys.