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PA state veterans home loan eligibility

US flagThe VA loan is a excellent mortgage for eligible veterans. Listed below are a few benefits of a VA home loan:

  • There is no down payment requirement as long as the purchase price doesn't exceed the appraised value and conforms to the lending limits established by the lender.
  • No private mortgage insurance premium (pmi or mip) is required on VA home loans.
  • The Veteran's administration limits the amount the lender can charge the vet for closing costs.
  • All reasonable and customary closing costs may be paid by the seller. The lender is prohibited from charging the veteran a penalty fee if the veteran pays the loan off early.

    . . . and, there is no first time homebuyer requirement with VA loans. The VA home purchase benefit may be re-used.

A VA loan is a mortgage loan that is guaranteed by the United States Department of Veterans Affairs (VA). The VA does not originate or lend money to the veteran, but backs the loan that is made by private lenders such as banks, savings and loan associations, or mortgage companies. The VA guarantees the loan to the lender . . . not the veteran. This means that if the VA loan goes into default and the lender forecloses on the house, the VA will reimburse the lender a percentage of the mortgage. The reimbursement depends on the size of the loan, but in general, the guarantee is 25% of the outstanding balance.

The VA does not guarantee that the house will be free of defects whether it is new or previously occupied. And the guarantee does not mean that eligible veterans are guaranteed a mortgage. The VA lenders must meet the underwriting guidelines established by the Veteran's Administration to obtain the VA backing. The VA lenders must be approved by the VA before offering VA home loans.

The VA guarantee is made possible by a funding fee charged to the borrower. Every VA borrower pays the funding fee, except veterans who are recognized by the VA as 10% disabled. The funding fee is the source of funding for the guarantee reimbursement. See funding fee calculationMilitary hats

Who is eligible for a VA loan?

In general . . .
You have served 181 days of active service during peacetime,
OR
You have served 90 consecutive days of active service during wartime,
OR
You have more than 6 years of service in the National Guard or Reserves,
OR
You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.

See more information about veteran eligibility

How much can a veteran borrow?

There are no established lending limits by the VA, however, the VA lenders will stay within a formula to make sure that the loan meets the 25% guarantee by the VA. The lender limit conforms to the VA's single family loan limit released annually by the Federal Housing Finance Agency's limits. Some US counties and Hawaii, Alaska, Guam, and the U.S. Virgin Islands loan amounts that exceed the typical lending limit. The lending restrictions on “VA jumbo loans", were eliminated and veterans can take advantage of higher loan amounts, however a small down payment may be required.

In addition to the maximum lending limit is the veteran's debt to income ratio. The debt to income calculation compares the monthly debt (i.e. car loan(s), credit cards, school loans, etc.) against the gross monthly income. The ideal debt ratio is 41%. That means that the monthly debt, including the proposed mortgage payment is at or less that 41% of the veteran's monthly income.

Eligible veterans are able to use a VA loan to . . .

  • Buy a 1 to 4 unit home or purchase a condominium unit in a VA approved project.
  • Build a home
  • Simultaneously purchase and improve a home
  • Improve a home by installing energy-related features or making energy efficient improvements
  • Buy a manufactured home and/or lot.

Rotating question mark  Frequently Asked Questions About VA Home Loans

Q. Are there closing costs with a VA loan?
A. Typical closing costs are charged and permitted on a VA loan, (i.e. title insurance, transfer taxes/fees, settlement, etc.), however, the Veteran's Administration does prohibit a number of fees that benefit the lender.

Q. Are VA loan appraisals tougher?
VA loan appraisals tend to be more stringent than other loan appraisals. Homes purchased with a VA loan must meet the VA’s Minimum Property Requirements (MPRs). In short, the home must be structurally sound, safe and sanitary.

Q. Can a child of a veteran qualify for a VA loan?
A. Unfortunately, the VA loan benefit is non-transferable to dependants and non-dependents. (i.e. children). Spouses may be eligible for a VA loan provided they meet the VA guidelines.

Q. Can a VA loan be denied?
A. The VA loan can be denied by the lender. VA loan applicants must meet income, debt to income, employment requirements and credit guidelines like any other mortgage.

Q. Can a VA loan close in 30 days?
A. Closing in 30 days is possible, but unlikely. Lenders must verify income, credit, and other criteria. The appraisal usually slows down the loan application.

Q. Can a veteran cosign a VA loan?
A. The VA permits co-signers on VA loans. Legally married spouses can co-sign a VA loan. A fellow unmarried veteran is permitted to co-sign a VA loan. Some lenders will allow unmarried, non-military individuals to co-sign a veteran's loan, however, this option may limit how much the veteran can borrow or may require a down payment.

Q. Can I buy a house with a VA loan with bad credit?
A. Yes, maybe. The VA loan is similar to other home loans with regard to credit quality. But unlike other loan options, there is no minimum score requirement, but most lenders require a 620 minimum credit score. The VA does extend some bad credit options to vets with credit issues.

Q. What can a veteran do who has lost his or her original discharge papers and does not have a legible copy?
A. The veteran should obtain a Certificate in Lieu of Lost or Destroyed Discharge. Any VA office will assist the veteran in obtaining necessary proof of military service.

Q. Does a veteran's home loan entitlement expire?
A. No. Home loan entitlement is generally good until used. However, the eligibility of service personnel is only available so long as they remain on active duty. If they are discharged or released from active duty before using their entitlement, a new determination of their eligibility must be made, based on the length of service and the type of discharge received.

Q. May a veteran join with a non-veteran in obtaining a VA loan?
A. Yes, but the guaranty is based only on the veteran's portion of the loan. The guaranty cannot cover the non-veteran's part of the loan. This does not apply to a loan to a veteran and spouse when the spouse is not a veteran. (Consult lenders to determine whether they would be willing to accept applications for joint loans of this type.) SOURCE: VA-GUARANTEED HOME LOANS FOR VETERANS