25 million active duty service members and veterans are eligible to qualify for the VA loan program. These brave men and women often ask, “how many times can I use the VA loan benefit.” The answer is in theory, as many times as they want. As long as the military member has paid off the original (or previous) VA loan and sold the property purchased by it, they may reuse the loan. Entitlement allotment is infinite as long as all borrower loan payments are current. Of course, all program eligibility requirements must be met in order to qualify for subsequent loans. Aside from the military service requirement, qualifying is based on lender/investor underwriting guidelines such as income, credit (no VA specified credit minimum, discretionary to lender), DTI and LTV, etc.
Benefits of a VA home loan include:
- A VA loan provides equal opportunity to the borrower.
- It’s a 100 percent no money down program, the only program right now that offers no money down.
- No mortgage insurance (PMI)! Borrowers do not have to worry about paying mortgage insurance each month as a result of the waived fee.
- VA home loans offer better interest rates than a conventional loan.
- Ability to finance the VA funding fee. 0-2.15 percent for first-time home buyers.
- Closing costs are comparable with other financing types (and may be paid on the behalf of the borrower).
- With a VA loan, a borrower can pay off the loan early without any penalties.
- VA assistance is provided to veteran borrowers that are in default due to temporary financial difficulty.
In the event of a previous foreclosure, short sale or bankruptcy a borrower will still be able to qualify for future VA loans. How soon a borrower may apply is contingent on whether they were up to date with their payments. If a borrower was current at the time of a short sale, there is no waiting time required for them to qualify for another loan. If they were not up to date, they must wait 24 months to receive another loan.
***For veterans in the process of a short sale, VA Home Loan Centers provides our services at no charge.
***VA loans call for a borrower paid funding fee, for 1st time user this fee is 2.15 percent. The fee for second-time use is 3.3 percent.
Mitigating restrictions for eligible borrowers using the VA loan additional times are:
- The property must appraise.
- The borrower must be able to afford the payment.
- The borrower must meet the underwriting criteria.
- The borrower may not exceed their eligibility.
Each lender has different criteria. To find out what you will qualify for; apply for a VA loan today, contact VA Home Loan Centers!