In 2016, the U.S. Department of Veteran Affairs guaranteed more than 707,000 home loans, making it the largest year in the history of the VA loan program. In honor of the men and women who have served our country, we’re highlighting the ways the VA loan program makes homeownership attainable and affordable for our veterans.
VA loans have a zero down payment requirement.
The VA Home Loan Guaranty Program was created in 1944 and designed to help level the playing field for veterans who were not able to build a financial nest egg during the time of their service. The no down payment requirement is arguably one of the biggest benefits the VA loan offers borrowers.
Veterans receive cost breaks other borrowers usually incur.
The VA limits the amount of closing costs a veteran borrower has to pay. VA borrowers are also not required to pay mortgage insurance, which is required for other government-backed loans like FHA and USDA. VA loan interest rates are often lower than market rates, as well.
VA loans are not a one-time benefit.
A common misconception among veterans is that the VA loan program can only be used once. Once you’ve earned the benefit, it’s yours for life. The loan program is available to first-time, repeat and refinance borrowers who have already used the program.
The VA loan is one of the lowest-risk mortgage programs.
The U.S. Department of Veteran Affairs says the VA loan program has “been the safest on the market since the housing crash”. The no down payment requirement, lower than market interest rate and the avoidance of mortgage insurance help keep costs affordable for veterans.
On top of helping veterans achieve homeownership, the VA makes it their mission to help veteran homeowners maintain their mortgage. Prudent underwriting and income requirements give lenders and the VA a greater sense of what a borrower can afford. The VA also helps borrowers who are behind on mortgage payments with home retention assistance. In 2015, more than 90,000 veteran homeowners avoided foreclosure due to efforts of the VA to reach a “mutually agreeable payment option”, according to The Mortgage Reports.
Even though the benefits of a VA loan are vast, surveys have shown that approximately one out of every three homebuying veterans are unaware of the VA loan program. If you have any questions about qualifying or applying for a VA loan, contact one of our mortgage bankers. To all veterans, thank you for your service and sacrifices! We are forever grateful.
For more information about purchasing and financing your first home, download our free Mortgage 101 Handbook.