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FAQS Frequently Asked Questions about VA home loans
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Below you will find our comprehensive VA loan question and answer database, compiled by our highly trained staff after several years of direct experience working with veterens. We hope that you find the information you are looking for, but please remember that every situation is unique and the VA loan guidlines change on a reqular basis. Therefore we recommend you contact on of our VA Specialists at 866-946-1233 or Apply Now Online for a VA Purchase or VA Refinance.

Appraisals and Inspection
→ Are VA appraisals extremely critical of the condition of the property

No, the VA controls the process of assigning a randomly selected appraiser in your area who has taken the necessary requirements to become a VA approved appraiser. These appraisers will not only appraise or give an approximate value of the property but also look for major repairs that could come up within the next 2 years or possible safety hazards. If such problems are identified it is up to the seller to make the necessary repairs before financing can be obtained. However, in our experience almost all sellers are receptive to the repairs requests by the VA appraisers.

→ Is the VA appraisal the same as a home inspection?

No, the appraiser is not an inspector. VA does not guarantee the condition of the house you are buying. VA guarantees only the loan. If you have any doubts about the condition of the house which you are buying, it is in your best interest to seek expert advice before you legally commit yourself in a purchase agreement. Particularly with a previously occupied house, most sellers and their real estate agents are willing to permit you, at your expense, to arrange for an inspection by a qualified residential inspection service. Also, most sellers and real estate agents are willing to negotiate with you concerning repairs to the property. Steps of this kind can prevent many later problems, disagreements, and major disappointments.

→ Which inspections are required for VA home loans?

A termite inspection is required for most VA mortgages in most areas but not all. In most cases where properties in rural locations don’t have access to public drinking water and use a well, the well will need to be inspected. An additional inspection will be needed if the VA appraiser has a concern about a particular item such as the foundation after he/she inspects the property.

→ If the appraised value of the house I’m purchasing is lower than the amount I agreed to pay for the house, is there any way I can still buy it?

You have three options:

  1. You can renegotiate the purchase price down to the appraised value of the home.
  2. You can pay the difference between the selling price and the appraised value yourself, since the loan amount cannot exceed the appraised value plus the funding fee.
  3. If you believe there is an error in the appraisal, you can ask the local VA office to review it. Be sure to specifically identify where you believe the appraisal is in error and why.
Credit Concerns and Bankruptcy
→ What kind of credit scores do I need to have in order to qualify for a VA home loan?

VA mortgages are not credit score driven. However, it is up to the appropriate VA lender to review all past credit history especially the within the last 12 months when considering loan approval. Special consideration is given to those with a lack of sufficient credit. Often times VA lenders are allowed to recognize monthly payments made to non traditional trade lines such as utility bills, cell phone bills, renters and auto insurance that don’t often report to the 3 credit bureaus. Our team has extensive experience approving veterans borrower’s with less than perfect credit. To get started apply now for a VA Purchase or VA Refinance and see how easy it can be to get approved for a VA loan.

→ I’ve had a recent Chapter 7 Bankruptcy (liquidation of assets). How long do I need to wait before I’m eligible for the VA home loan?

Generally, with a Chapter 7 bankruptcy the VA loan requires 2 years from the discharge date of the Bankruptcy before financing becomes available. There are, however, certain uncontrollable circumstances such as medical conditions that allow for financing 1 year after the discharge date but these are very rare.

→ Is there anything I can do now that my Chapter 7 bankruptcy has been discharged to help me get a VA home loan once my 1 or 2 years are up?

As VA specialists we strongly recommend after the bankruptcy has been discharged to mail in a full copy of your discharge paperwork with all of the appropriate schedules to all three credit bureaus. Often time some of the accounts included in the bankruptcy won’t reflect that they were discharged accurately. We suggest you start by pulling your credit reports through This central site allows individuals to request a free credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. We also recommend reestablishing your credit if you have not already done so. Even after your cooling off period is up you still will need to show VA lenders that you can make your payments on time.

→ I’ve had a recent Chapter 13 Bankruptcy (rehabilitation with a payment plan). How long do I need to wait before I’m eligible for the VA home loan?

A veteran may be eligible for a VA mortgage while in the chapter 13 bankruptcy; but will need to have at least made 12 on time payments and have approval for the loan by the court trustee.

→ I’m currently enrolled in a debt consolidation program or Consumer Credit Counseling Services (CCCS). How long do I need to wait before I’m eligible for the VA loan?

VA stance on CCCS is similar to a Chapter 13 bankruptcy where the CCCS has negotiated with the creditors a repayment plan for their clients. VA requires proof of 12 on time payments and the veteran has approval by their CCCS for the loan before the veteran is eligible for a VA mortgage.

→ Are there any buyer paid closing costs with VA home loans or can I finance the closing costs into the loan balance?

Yes, there are closing costs associated VA home loans just like any other mortgage and just like the majority of mortgages you can not finance in closing costs. Closing cost must be paid by either the veteran or the seller may also contribute up to 4% of the purchase price of the house to pay for the veteran’s closing costs. If the veteran truly wants to purchase a house with no out of pocket costs negotiating these costs with the seller is extremely common. Contact one of our VA Loan Professionals for details.

→ Does the VA help protect me against excessive fees associated with the mortgage process?

The VA does restrict certain types of fees that can be charged to the veteran though the VA loan process, normally referred to as non-allowable fees. Under no circumstance can the veteran pay for such fees; however, the VA lender is authorized to charge up to a 1% origination fee equal to 1% of the loan amount to cover such fees. If the non-allowable fees total more than 1% either the lender or seller must cover these excess fees. As a direct VA Lender we very rarely charge the 1% origination fee. Contact one of our VA Specialists for more information.

→ What is the VA funding fee and why does the veteran borrower have to pay for it?

The VA funding fee is required by law. The fee is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduce the cost to taxpayers. The VA funding fee with a down payment of less than 5% of the purchase price is higher for subsequent veteran borrowers. The idea of a higher fee for second time use is based on the fact that these veterans have already had a chance to use the VA home loan benefit once, and have had time to accumulate equity or save money towards a down payment. Notably, VA funding fee is not an out of pocket cost and is only fee associated with a VA home loan that is financed into the balance of the mortgage. The only time the VA funding fee is waived is if the veteran borrower has a service related disability of 10% or more by the Veteran Affairs. Please reference the VA Funding Fee Table in the section below for a detailed breakdown of the current VA related funding fees.

→ Can I use the VA home loan more than once?

Yes, you may use the VA home loan as many times as you wish as long as you have enough VA guarantee to insure the next loan. Please note that the VA funding fee for subsequent use may increase. Please reference the VA Funding Fee Table below for more information. In fact, under some circumstances there is a possibility of obtaining two VA mortgages at one time. To get started apply now for a VA Purchase or VA Refinance and see how easy it can be to get approved for a VA loan.

→ What is the maximum VA mortgage limit?

The VA loan limit changes periodically and normally follows with the conforming limits set by Fannie Mae and Freddie Mac. The current maximum VA loan limit for 100% financing is $417,000 except for Alaska and Hawaii where the limit is $625,500. Interestingly, after September 1, 2007 VA lenders have been authorized to go over these conforming limits. However, the veteran borrower is required to contribute a mandatory down payment of at least 25% of the difference borrowed over the current conforming limit. Please note that for any VA mortgage the veteran will still need to credit and income qualify.

→ How long does the entire VA loan process take?

As a direct VA lender specializing in VA financing we can process your loan start to finish in as little as 1 to 2 weeks. However, every loan is unique and there are instances where the process may take longer.

→ Are there any restrictions on the type of properties that I can purchase?

The veteran may purchase a Single Family Residence, Townhome, Duplex, and up to a 4-plex for Multi Units. The veteran may also purchase a condominium, but the condominium’s organizational documents will need to be registered and approved with the VA before financing becomes available. You may reference the VA Condo and Builder Search Engine.

→ Can I get a VA home loan with someone who is not my spouse?

A veteran can purchase a home with any individual they choose, but the VA will only guarantee the portion of the loan attributed to the veteran and a spouse. For example, if the veteran intends to purchase a home with a fiancé prior to marriage and will share the same interest in the property, VA would guarantee half of the loan.

→ Can I have someone assume my VA home loan?

A VA loan may be assumable if the person assuming the loan qualifies based on credit and income. Your loan may be assumed by both veterans and non-veterans. As VA specialists we strongly encourage veterans against such actions. If someone other than you were to assume your VA loan it will tie up your guarantee and until the mortgage has been paid in full you will not be able to restore your VA entitlement. Furthermore, if the individual(s) that assumed your VA loan was foreclosed upon you will lose a portion of your VA guarantee until you paid it back.

→ Can I get a VA mortgage for a home outside of the United States?

Unfortunately, the law only allows VA to guarantee loans on property in the United States, its territories, or possessions.

→ If a veteran dies before the VA home loan is paid off, will the VA guaranty pay off the balance of the loan?

No. The surviving spouse or other co-borrower must continue to make the payments. If there is no co-borrower, the loan becomes the obligation of the veteran's estate. Mortgage life insurance is available but must be purchased from private insurance sources.

→ I’m currently serving overseas? Can my spouse or another family member purchase or refinance the property on my behalf?

Yes, as long as the individual signing on your behalf obtains a special, not a general, power of attorney for the specific property you are purchasing that person may close the VA home loan on your behalf. To get started apply now for a VA Purchase or VA Refinance and see how easy it can be to get approved for a VA loan.

New Home Construction
→ Can I use the VA loan to build a home?

Yes, the VA may be used to finance a newly built home, especially if the builder provides the construction financing. Otherwise you must provide your own construction financing. This type of financing can be more complicated. Please Contact a VA Specialist for details.

→ If I decide to build a home can I be my own contractor?

Although they are allowed by law, most lenders do not make construction loans for VA home loans, largely due to risks and costs of construction disputes. You can be your own contractor, but you will have to find your own source for construction financing. Once the home is complete, you could then get a VA loan to refinance the construction loan. Funds from the VA loan could also be used to pay off the balance of the loan on the land, provided that the total VA mortgage amount does not exceed the VA reasonable (appraised) value of the property. The house would be considered an existing home once construction was complete. It would have to meet VA Minimum Property Standards that apply to existing homes.

→ Is the builder required to offer a warranty on the home?

VA requires the builder to provide at least a 1 year warranty but most states and local areas also have the same restriction.

→ Does my builder need to be registered or approved with the VA before closing?

Yes. If you are considering building new construction or buying a spec home that is less than one year old your builder will need a special ID number. To become registered with the VA and obtain the ID number the builder will need to submit the 3 forms listed below to the VA Regional Loan Center for your state.

  1. Equal opportunities employment certificate
  2. VA affirmative marketing certificate
  3. Identifying and information certificate – Note must be put on builder’s own letterhead.

To get started Apply Now for a VA Purchase or VA Refinance and see how easy it can be to get approved for a VA loan. If you are looking for financing with us we’ll take care of the builder’s required documentation for you.

Payment & Interest Rates
→ Do VA loans have a prepayment penalty?

No. At any time, you have the right to pre-pay any portion/amount of your loan balance without penalty.

→ Are the VA interest rates different than Conventional Loans?

Most, but not all of the time VA mortgage interest rates are comparable to conventional mortgage rates with a 20% down payment.

→ What are the terms available for VA loans?

The typical VA loan is a fixed rate mortgage amortized over 30 years. If veteran chooses they can also go with a 25, 20, and 15 year mortgage. Most veterans go with fixed rate mortgages but there are also 2 adjustable rate mortgage (ARM) options the 3/1 and 5/1 ARMs. Both the 3/1 and the 5/1 ARMs VA loans are amortized over 30 years.

→ How do the VA ARMs work?

The rate is fixed for either a period of 3 or 5 years depending on the type of VA ARM. After the initial fixed rate period is up the loan would then adjust one a year. Each of the VA ARMs are caped at a 1% adjustment cap per year, and a total lifetime loan cap of 5%. The Margins (fixed component) are usually set at either 2% or 2.5% and the index (variable component) is the average yield on U.S. Treasury Securities adjusted to a constant maturity of one year.

To compute how your rate would simply add the current yield on the One year treasury lets say is 4% to the margin which is 2%. So if your rate were to adjust today is would be equal to a 6% interest rate.

→ What is Private Mortgage Insurance (PMI) and why is it important to lenders?

PMI is an insurance policy that insures your lender in case of future loan default. On almost all conventional loans PMI is required when the borrower doesn’t have the necessary 20% down payment, or in lieu of PMI the loan is broken up into two higher interest rates mortgages. Typically, PMI is very expensive and is paid on a monthly basis as part of your mortgage loan payment. VA loans do NOT require monthly PMI payments and may save you several hundred dollars per month. Please Contact a VA Specialist for details.

→ If a veteran has trouble repaying the VA loan, what should he or she do?

It is best to talk with the VA lender as soon as possible to explain why the payments are late and when and how those late payments will be made. If there was a job loss, divorce, or other serious problem, and the regular monthly payments cannot be made, then it may be best to sell the home to avoid foreclosure. VA may be able to assist in arranging a repayment plan or other alternative to foreclosure. VA offers home loan counseling through its 9 Regional Loan Centers (RLCs). Call VA’s toll-free number (800-827-l000) to request a call-back from a Loan Service Representative or click here for the phone number and address of the RLC closest to you.

→ Can I use the VA loan to refinance or get cash out on my current mortgage even if it’s currently not a VA loan?

Yes, but VA has specific guidelines when it come to any refinance that’s not considered a VA Interest Rate Reduction Refinancing Loan (IRRRL).

  1. The VA loan to value limit is 100% of the reasonable value of the property. *Note the state of Texas has its own cash out rules that may supersede the VA limits. Contact a VA Specialist for details.
  2. A cash-out VA refinancing loan is a VA guaranteed loan which refinances any type of lien or liens against the secured property. The liens to be paid off may be current or delinquent, and from any source. (tax or judgment liens, VA, FHA, or conventional mortgages)
  3. An appraisal is required and you must qualify based on income and credit.
  4. An appraisal is required and the veteran must qualify based on income and credit.
  5. Loan proceeds beyond the amount needed to pay off the liens may be taken as cash by the borrower for any purpose acceptable to the lender.
  6. The loan must be secured by the first lien on the property.
→ What is a VA Interest Rate Reduction Refinancing Loan (IRRRL)?

If you are looking to lower your interest rate and your monthly mortgage payment, you may want to consider an IRRRL. You may see it referred to as a “streamline” or a “VA to VA.” Completion of an IRRRL must result in a lower interest rate, except when refinancing an existing VA guaranteed adjustable rate mortgage (ARM) to a fixed rate mortgage. In this particular instance, the rate may increase. Below are some benefits and helpful tips when considering an IRRRL.

  1. No appraisal or credit underwriting package is required by VA.
  2. A certificate of eligibility is not required.
  3. An IRRRL may be done with "no money out of pocket" by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs. (Remember: The interest rate on the new loan must be lower than the rate on the old loan unless you refinance an ARM to a fixed rate mortgage).
  4. You cannot receive any cash from the loan proceeds.
  5. It must be a VA to VA refinance, and it will reuse the entitlement you originally used. You may have used your entitlement by obtaining a VA loan when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the loan.
  6. The occupancy requirement for an IRRRL is different from other VA loans. When you originally got your VA loan, you certified that you occupied or intended to occupy the home. For an IRRRL you need only certify that you previously occupied it.
  7. The loan may not exceed the sum of the outstanding balance on the existing VA loan, plus allowable fees and closing costs, including a funding fee and up to 2 discount points. You may also add up to $6,000 of energy efficiency improvements into the loan.
  8. No loan other than the existing VA loan may be paid from the proceeds of an IRRRL. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage.

To get started Apply Now for a VA Purchase or VA Refinance and see how easy it can be to get approved for a VA loan

VA Funding Fee Table
→ Purchase And Construction Loans

Note: The funding fee for regular military first time use from 1/1/04 to 9/30/04 is 2.2 percent. This figure drops to 2.15 percent on 10/1/04.

Type of Veteran Down Payment First Time Use Subsequent Use for loans from 1/1/04 to 9/30/2011
Regular Military None
5% or more (up to 10%)
10% or more
1.50% 1.25%
3.3% *
National Guard
5% or more (up to 10%)
10% or more
2.4% 1.75% 1.5% 3.3% *
→ Cash-Out Refinancing Loans
Type of Veteran Percentage for First Time Use Percentage for Subsequent Use
Regular Military 2.15% 3.3% *
Reserves/National Guard 2.4% 3.3% *

* The higher subsequent use fee does not apply to these types of loans if the veteran’s only prior use of entitlement was for a manufactured home loan.

→ Other Types Of Loans
Type of Loan Percentage for Either Type of Veteran Whether First Time or Subsequent Use
Interest Rate Reduction Refinancing Loans .50%
Manufactured Home Loans 1.00%
Loan Assumptions .50%