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Advantages of VA's Home Loan Purchase Program

The VA allows a veteran who qualifies income and credit-wise to purchase a primary residence without putting money down towards the sales price, as long as the sales price does not exceed the appraised value.  Closing costs may be paid by the seller, which is an item to consider when the sales price is being negotiated.

• Loans are assumable, provided the assume is qualified.
• Veterans's closing costs are limited by VA.
• Additional assistance is offered by VA should veterans have problems making their home loan payments in the future.
• Prepayment of the loan without a penalty.

100% Financing no down payment required

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Here are some quick facts concerning purchase transactions

• VA does not have a maximum loan amount.  However, these loans are usually sold on the secondary mortgage market, so they will generally limit loans to $417,000 ($625,500 in Hawaii , Guam , Alaska and U.S. Virgin Islands) with no down payment.  With a down payment, loans may exceed these amounts .
• The veteran does have to qualify income and credit wise.
• The veteran does have to occupy the home as their primary residence.
• The veteran does not have to be a first time home buyer and may reuse his/her benefit.
• There is no private mortgage insurance, but VA does charge an up front VA funding fee, which may be financed.  The exception to this is that if a veteran is in receipt of VA service connect disability payments each month, he or she does not have to pay a VA funding fee.

The seller can pay for closing costs.  There is a requirement that seller concessions do not exceed 4%, but only certain items are considered as part of the concession; i.e., payment of pre-paids, VA funding fee, payoff of credit balances or judgments on behalf of the veteran, funds for temporary buydowns (not discount points).