Sunday, October 31, 2010

VA Loans Quick Reference Guide

Need a Quick Reference Guide for VA Loans? Here you go.

Down Payment and Seller Concessions
-- No down payment required – 100% financing
-- No limit on seller-paid closing costs
-- Pre-paids (insurance, taxes, permanent buydown points, etc.) are limited to 4% of purchase price

Declining Market Restrictions
-- VA does NOT have declining market restrictions

Borrower Eligibility
-- Limited to active and retired members of the military and their surviving spouses
-- NOT limited to first time homebuyers
-- NO income limitations

Occupancy Requirements
-- Primary residences only

Maximum Loan Size
-- $417,000 in all counties and some counties are much higher – it is possible to purchase a house over the limit, but 25% of anything over the limit must be paid in cash

Credit Requirements
-- Each lender has their own minimum credit score – typically 640
-- Non-traditional credit is OK (need 3 trade lines verified for the past 12 months)
-- Bankruptcy – Chapter 7 is 2 years from the discharge date, Chapter 13 is 1 year of timely payments
-- Foreclosure – 2 years from the recording date of the Public Trustee’s Deed
-- Collection accounts do NOT have to be paid

Mortgage Insurance
-- No mortgage insurance
-- VA funding fee of 1.25% - 3.3% is paid at closing (it can be financed into the loan)
-- Funding fee is waived if the borrower is receiving permanent military disability benefits

Appraisals
-- The property must be in good condition and safety issues must be addressed

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