A VA (Veterans Administration) guaranteed home loan in one of the best loans for active, non-active, Reserve, National Guard, and retired military of the armed forces. No down payment is required, and there is no PMI (Private Mortgage Insurance).

And, VA loans are good for both home purchases – including building new – and refinancing existing home loans. And in these days of reduced equity, high loan to values are easy to get approved for.

So let’s get into a fairly in-depth overview of the benefits and function of a Georgia VA loan, as well as the eligibility requirements for a VA loan. Finally, and this presents the most questions at times, the documentation you will need to apply and get approved for a VA mortgage loan.

Did you know that more than 27 million veterans and active service personnel are eligible for VA financing? Yet many don’t realize that they can use this benefit to buy a home – and they can reuse the benefit to buy another home as well, even if used prior.

One more thing: the Veteran’s Administration (VA) does not make loans themselves. The VA simply guarantees a loan made by a lender such as myself to a Vet. It is a great benefit even if it does not come from the VA directly to you; because the Guarantee means that they will pay the lender a percentage of the loan balance in case of default. And that allows us to offer that great deal – 100% financing with no monthly MI.

*The word GUARANTY does not actually guarantee the veteran will qualify for a VA home loan; a common misconception.

Although the VA does not have a minimum credit score required for a VA loan, since early 2010, most VA lenders in the U.S. have tightened their lending and credit score requirements.

As a result, getting a loan without a down payment is more difficult, though one of the few remaining options for 100% financing is a VA loan. Major lending groups have generally resolved to set the minimum credit score requirement at 620. And, as you know, for those who may need it, I have teamed with a Credit Restoration company that has been delivering very good results to help veterans improve their credit score and qualify for a VA mortgage loan in a short time.

Primary Benefits of a VA Mortgage:

• 100% financing
• No monthly private mortgage insurance is required
• There is a limitation on buyers’ closing costs
• The loan is assumable, subject to credit approval of the person(s) assuming the loan
• 30 year fixed loan available
• Seller can pay up to 4% of the veterans closing costs and even pay down they buyer’s debt to help lower their debt-to-income ratio
• Interest rates are similar to FHA rates on all loan products
• You don’t need perfect credit

Frequently Asked Questions:

Q: My parent is a veteran. Can I obtain a VA loan if I have not served in the military myself?

No, the VA loan benefit does not extend to a veteran’s children.

Q: What is required to prove my record of military service?

You will be required to use Standard Form 180, Request Pertaining to Military Records, to apply for proof of military service. More on that in this post of VA loan eligibility.

Q: My spouse who has passed away was an eligible veteran. I am eligible for the home loan benefit myself?

A surviving spouse is eligible if they have not remarried, and the eligible veteran died during active duty service or as a result of a service-related disability.

Q: Is a VA loan better than a conventional mortgage?

In many ways, yes. VA guaranteed loans offer a lower interest rate than conventional mortgages, especially with a borrower that has less than a 740 credit score and is not planning on a large down payment. You see, VA loans do not require monthly private mortgage insurance when borrowing more than 80% of a home’s value, and they can be easier to get approved for.

Q: How long does it take to get approved for a VA loan?

It varies depending on the current loan volume we are seeing, and any stipulations per the purchase contract, but it is typically the same as for conventional mortgages – 3 weeks to 45 days.

Related posts:

1. Georgia USDA, VA and FHA Loan Changes
2. New Licensing Requirements for Georgia Loan Officers
3. Get a No Closing Cost Loan in Georgia

But, now that we are heading toward Halloween, several changes are upon us affecting the range of Government insured loans.

Trick, or Treat?

A quick review of the Georgia VA, USDA rural housing loans, and FHA loan changes. Then, you can decide.

In October, 2011, the changes are taking effect o all of these loans – and even though they are all government insured, they are managed by different goverment agencies, so the change date is simply coincidence.

• Georgia FHA Loans: Metro Atlanta FHA mortgages were available to a maximum loan amount of $346,250; but now that loan limit has been reduced to a maximum loan amount of $320,850.So, if you are looking at a home and planning to get an FHA loan due to the low down payment required, be careful, don’t get caught in the change and have to either change products or come up with a larger down payment.
• Georgia USDA Rural Housing Loans: For years, those buying in outlying areas outside of metro Atlanta have had access to a USDA rural housing loan, which does not require a down payment. The great thing about the Rural Housing loan has been that there is no monthly mortgage insurance.  Well, that is no longer. The Funding Fee, which took the place of mortgage insurance, is DROPPING from 3.5% of the loan amount to 2.0% of the loan amount. Concurrently, there will now be annual mortgage insurance.  It’s not much – adding $18 to the payment on a $100,000 loan, and adding $42 to the monthly payment on a $200,000 loan. Not bad, and still a very good loan.
• Georgia VA Mortgages:  Similar to USDA Rural Housing loans, VA loans have a ‘funding fee’ which takes the place of mortgage insurance.  Now the funding fee is simply decreasing. In general from 2.15% to 1.5%. But, the chart below will lay out the detail of the funding fee decrease for your situation. Good news for active duty military and veterans.  Oh, and remember, Georgia VA loans still do not require a down payment.

Related posts:

1. Georgia USDA Rural Housing Loans Getting Less Expensive
2. Georgia USDA Update
3. Update on Georgia USDA Rural Housing Funds

We are a direct lender, meaning that we underwrite, approve and fund mortgage loans right here, in this office where I am sitting right now.  That is a very comfortable place to be in this uncertain lending environment.  I mean, when a loan comes in and it makes sense, we approve it, and that borrower gets into their home.  Nice.

That said, we do not service loans.  Meaning, we close the loan, usually with a commitment from a loan servicing company to pick that loan up and mail the monthly statements and collect the monthly payments.  Why does that matter?  Well, yesterday the news hit that Taylor, Bean & Whitaker can no longer buy or service FHA loans.

Bummer.  And based on having seen this scenario play out over and again over the past 3 years, I would say that TBW will likely be closing their doors for good within hours, or days.  And this affects us because it was one outlet that we had to sell our FHA loans, and other government loans such as VA and Rural Housing Loans.

It is too bad.  I, thankfully, have other outlets to sell FHA loans, so we go on business as usual in that sense. I only had TWB as an outlet to sell my VA loans, however.  So, although as of this writing TBW is still in business and still, supposedly, taking VA loans, all that is likely to change any time now.  Which means we are setting up to sell VA loans to other outlets for servicing.  Could be 2-3 weeks before we get there, but we will have that ability again soon.

Oh, and in case you were wondering about the inner workings of an Atlanta mortgage lender even further, we only need these outlets for government and niche loans.  For the standard, conventional 30 year and 15 year fixed loans, we sell those directly to Freddie Mac, and Freddie in turn finds the servicer for the loan.  So, we are good there.  Right?

There you have it.  More information than you ever thought you would need to know about the back office workings of a mortgage lender.

Related posts:

1. What’s in a Lender?
2. Loans Serviced by Taylor, Bean & Whitaker: Your Loan Information
3. Beware of Loan Modification Paid Services

So, right now, with all that happening and while we sit in the middle of a credit crisis in the country, one good thing has happened for Veterans all over with recent changes to the VA loan guidelines.

Now, if funds are tight and a veteran’s household needs to tap into their equity for debt consolidation, to remodel or repair the home, or for any other reason, they can now to a loan for up to 100% of the home’s value, minus the funding fee that every VA loan has.  In reality, you are looking at about 97% of the home’s value as cash out.

That’s big news considering the continually tightening criteria for conventional loans.  And, it will help a lot of past and present military personnel and their families around Georgia, during these tough economic times.

If I can help you with a refinance that will help your family, give me a call.  I would be honored.

Related posts:

1. Georgia Veterans Still Get the $8000 First Time Home Buyer Tax Credit
2. Considering A Debt Consolidation Loan
3. Debt Consolidation Refinance Getting (Even More) Difficult

Those days are gone….almost.

I get a lot of calls from buyers, especially first time home buyers, around Atlanta who have good credit and good income, but do not have money saved for a down payment.  What can they do?  Just wait?

Not necessarily.  There are two good options for 100% financing on a home loan, right here, in Atlanta.  And, a third option that I put together with creative ways to come up with the down payment with an FHA Loan.

1.  VA Loans:  Military personnel and veterans can still do 100% financing for up to $417,000 loan amounts around Atlanta, with a VA Loan.  Great financing, easy qualifying.

2.  USDA Loans.  This is not a piece of Grade A, Top Choice Beef. It is a loan, otherwise known as the rural housing loan.  It is actually as 102% loan, if the borrower wants to roll in closing costs.  But, it is true to it’s name – only homes with a great grill out back for beef qualify.

Okay, not really, but only homes outside the metro area qualify.  And, there are upper income limits.  So, if you are buying a home on the outskirts of the metro Atlanta area, call me to see if the property qualifies.

3.  If you are financing with an FHA loan, you are probably sad like the rest of us that the Down Payment Assistance programs have gone away (at least for now).

Well, don’t give up.  CLICK HERE to go to my article on 26 creative ways to come up with the down payment.  Then, click the link in that article to get the document.  Okay, too may clicks, so HERE it is.  Read through, put your creative side of your brain to work, and maybe we can make an FHA loan work.

I’ll be we can.

Related posts:

1. 100% Financing? How about Laid-back, Country Living.
2. Creative Means to Come up with the Down Payment
3. Atlanta FHA Loan Highpoints