Military service has often been called “the quiet sacrifice” Over the course of our nations’ history, heroic men and women have defended the ideals of our country while asking for little to nothing in return. Congress recognized this selflessness by creating the military VA loan program. This program represents perhaps the most beneficial entitlement available to active duty military personnel and veterans. Since its inception in 1944, the VA home loan has directly helped a seemingly countless number of service members become homeowners, many who otherwise would not have been able to. Today, the VA home loan is more popular than ever. Veterans constitute nine percent of the total population, yet account for a ten percent share of the new housing market.
What is the Military Loan Progam?
The VA home loan (military loan program) is a government insured mortgage product intended for military members (both active duty and former duty), surviving spouses, and some civilians. The Department of Veterans Affairs, in lieu of making an actual loan insures the principal investment made by a lender, thus guaranteeing the investor will receive a re-payment in the event of a borrower default. The amount of the guarantee will vary depending on the state and the loan amount. If the VA home loan is less than $144,000.00 the VA will insure a claim of up to $36,000.00. In the event that the VA loan amount is in excess of $144,000.000, the Veterans Administration will insure up to 25% of the loan amount (subject to the VA county loan limit).
This makes financing more accessible for qualified participants, lessens the underwriting requirements and establishes more competitive interest rates.
Furthering the appeal of the VA mortgage loan is the no down payment requirement, available refinancing options, service related disability options, no pre-payment penalties and no private mortgage insurance, among numerous other advantages.
Eligibility is dictated by length of service (90 straight days during war-time, 181 during peace) and contingent upon an honorable discharge.
The VA loan program can be used for a purchase or a refinance transaction and is intended to be used on the primary residence of the borrower.
A qualified applicant may use this benefit as many times as the recipient chooses. The exception is that usually, only one VA home loan may be taken out at a time.