The payout terms and conditions of each US military loan should be measured against your particular situation to find the US military loan solution to meet your needs. In doing so, we consider the home you want to purchase and your yearly gross anticipated earnings.
The first question you need to ask yourself is: "How long will I (or we) stay in this home?" The answer determines your program.
Here are the programs available to VA eligible borrowers:
30-year fixed mortgage
15-year fixed mortgage
5/1 ARM (for temporary stationed personnel)
30-year fixed Jumbo ($417K to $1M: strict guidelines apply)
In 1944, the Servicemen's Readjustment Act also known as the GI Bill of Rights, was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed mortgage loans with no down payment.
Veteran home loans are guaranteed by the U.S. Department of Veteran Affairs (VA). The guaranty means the lender is protected against loss if you fail to repay the loan.
What VA Does Not Do
Guarantee that a home is free of defects. VA guarantees only the loan. It is the veteran's responsibility to assure that he/she is satisfied with the property being purchased. The VA appraisal is not intended to be an "inspection" of the property. A veteran should seek expert advice (a qualified residential inspection service), as necessary, BEFORE legally committing to a purchase agreement.
If you have a home built, VA cannot compel the builder to correct construction defects although VA does have the authority to suspend a builder from further participation in the home loan program.
VA cannot guarantee that a veteran is making a good investment.
VA cannot provide a veteran with legal services.
VA Loan Limits
Click here to view your state and county 2010 VA loan limits. (For last year, here are the 2009 VA loan limits.) For all counties that are not listed on this document, the 2010 limit is $417,000.
VA will guarantee a portion of the Veteran home loan to the lender. This guaranty protects the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms. There is no maximum VA home loan but lenders generally limit VA home loans to $417,000 This is because lenders sell VA home loans in the secondary market, which currently places a $417,000 limit on the loans.
Note: For properties in Hawaii, Guam, Alaska and the U.S. Virgin Islands loan limits can be up to $625,000.
For loans up to this amount, it is usually possible for qualified veterans to obtain no down payment financing. A veteran's basic entitlement is $36,000 (or up to $104,250 for certain loans over $144,000). Lenders will generally loan up to 4 times a veteran's available entitlement without a down payment, provided the veteran is qualified by income & credit and the property appraises for the asking price.
