VA Home Loan:
Your Pathway to Homeownership
The VA-Guaranteed Home Loan program has helped generations of Veterans, Servicemembers, and their families enjoy the dream of homeownership and the opportunity to retain their homes in times of temporary financial hardship.
What is a VA Home Loan?
The VA Home Loan is a mortgage option specifically designed to help veterans, active-duty service members, and eligible surviving spouses achieve the dream of owning a home. The VA home loan guaranty is an agreement that VA will reimburse a lender (such as banks, credit unions, mortgage companies, etc.) in the event of loss due to foreclosure. This guaranty takes the place of your down payment. This loan program offers numerous advantages:
- No down payment as long as the sales price is at or below the home’s appraised value (the value set for the home after an expert review of the property)
- No loan limit with full entitlement if you can afford the loan, VA will back loans in all areas of the country, regardless of home price.
- No need for private mortgage insurance (PMI) or mortgage insurance premiums (MIP)
- PMI is a type of insurance that protects the lender if the borrower ends up not being able to pay the mortgage. It’s usually required on conventional loans if the down payment is less than 20% of the total mortgage amount.
- MIP is what the Federal Housing Administration (FHA) requires borrowers to pay to self-insure an FHA loan against future loss.
- Not having to pay PMI could save a borrower on their monthly mortgage payment.
- Fewer closing costs, which may be paid by the seller, lender, or any other party.
- No penalty fee for paying off the loan early.