Posts Tagged “VA underwriting”

The VA Home Loan just got better a few days ago, in case you didn’t know. If you are a Veteran Homebuyer or know someone who is, see below. The upfront Funding fee has been lowered! This means lower monthly payments for Veterans who even need to pay a funding fee. Click on the Chart image to make it bigger. Get the word out to all the Veteran Homebuyers !

VA Funding Fee chart

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Many Veterans and their families ask this question: Can the Veteran (homebuyer) who knows he/she is about to be deployed, purchase a home using a VA loan with the intention of occupying the property?
Yes and No!
Yes in that the Veteran can actually sign the initial Loan application and then ‘take off’ (be deployed), leaving a specific Power of Attorney for his trusted family member to execute to continue and complete the home purchase.
The Veteran must return home for a brief period within 6 months

The Veteran must return home for a brief period within 6 months (even for Rest & Recuperation) -for more details on this visit

The Veteran must purchase in the immediate vicinity of where he/she is stationed, and not their hometown necessarily. This means a Veteran who has been relocated to Camp in South Carolina for example, from California could not purchase an owner occupied-home in California at that time.

Another requirement is the need for an “Alive & Well Letter” immediately prior to the funding of the VA loan; this can be obtained from the Unit he/she is serving in.

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The answer is yes, with some restrictions.
The Veteran homebuyer has to live in/occupy one of the units as his/her principal residence.
The Veteran homebuyer cannot use the rental income he/she will acquire from the other units, to qualify for the VA loan.

The good news is that the VA Loan will finance 100% of the purchase price, even on 2, 3, or 4-unit property.

For more information on VA loans, check out the VA Homebuyer Webinar recording here . . .VA Homebuyer Webinar

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If the mortgage the Veteran was foreclosed on was a non-VA loan (e.g. FHA, CONV etc) then he/she is eligible for VA financing after 2 yrs. However if the loan that was foreclosed on was a VA loan, some restrictions come into play.
The Dept of VA is going to assess how much their $ loss was through that foreclosure. If the loss from the previous VA loan foreclosure has not been repaid, then there may not be enough entitlement remaining to allow the Veteran to borrow 100% of the purchase price on the new home being purchased. Here’s an example of how the figures may look: The following example shows how a foreclosure on a VA loan and failure by the Veteran who experienced foreclosure to repay the losses to the VA, can detrimentally affect his/her ability to fully enjoy the VA benefit:

A veteran has used $36,000 of his basic entitlement on a VA loan that was foreclosed. The loss was not repaid. It’s been two years since foreclosure and the borrower would like to purchase another home using the Program. The loan amount will be $300,000 where the county limit is $417,000.

$417,000 x 25% = $104,250 maximum guaranty with full entitlement
$104,250 – $36,000 (not restored) = $68,250 entitlement available
$68,250/ $300,000 = 22.75% is the max allowed VA Guaranty on this loan

In other words, the typical 25% VA Guaranty is not in play in this scenario, forcing the Veteran to come in with cash downpayment.($27,000)

For complete VA homebuyer information visit the Youtube Channel at

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Basic Facts First: On a VA home loan, the Veteran’s spouse’s debt obligations have to be counted against him/her when qualifying even if the Spouse will not be a borrower on the VA loan (i.e. “non purchasing spouse”).
Underwriters therefore add up all the monthly debts belonging exclusively to the spouse and count them against the Veteran (Borrower).
And since the spouse is not signing on the loan, his/her income, if working, is typically not used.
However a very little known fact is that VA actually allows *THAT PORTION OF THE SPOUSE’S INCOME THAT IS EQUAL TO THE MONTHLY DEBT OF THE SPOUSE**** to be used to offset the debt.
Here’s an example

Veteran has $5000/mo income and $1000/mo debt of his/her own
Spouse has $2000/mo income and $700/mo debt of his/her own

We can use $700 ** of the spouse’s $2000mo but no more*** to offset the debts.

This gives us total debt of $1700/mo but total useable income of $5700/mo.

Thanks Vets for serving our country! :)

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