VA Mortgage Loans

A VA guaranteed mortgage is made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected from a  loss if you fail to repay the loan. In most cases, a down payment is not required on a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans.

Other benefits of a VA loans:

• Negotiable interest rate.
• Closing costs comparable – and sometimes lower - than other financing types.
• No private mortgage insurance requirement.
• Right to prepay loan without penalties
• Mortgage can be taken over (or “assumed”) by the buyer when a home is sold.
• Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.

Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount. The VA will sometimes wave the funding fee.

A VA loan can be used to buy a home, build a home, consolidate debt, and even improve a home with energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender.