The VA home loan allows veterans to purchase a primary residence without putting any money down.  Veterans still need to income and credit qualify but this is a great program to help veterans. Typically, you still need to have money to bring into the transaction in the form of closing costs, however in some cases you can request sellers pay a portion of your closing costs to come in with very little if any at all.

Benefits

• 0% down payment required
• Flexible credit requirements
• Allowed for seller to contribute towards costs
• VA loans are assumable
• VA loans have no prepayment penalty
• VA has additional homeowner assistance hotline

VA (Veteran) Eligibility for Mortgage

Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses

VA will guarantee a maximum of 25 % of a home loan amount up to $104,250, which limits the maximum loan amount to $417,000. Generally, the reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed. All veterans must qualify, for they are not automatically eligible for the program.

VA (Veteran) Funding Fee

VA funding fee is required by law.  VA funding fees range depending on the down payment or if you have used your VA eligibility in the past. The fee, currently 2.15% on no down payment loans for a first-time use, is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduce the cost to taxpayers. The funding fee for repeat users who do not make a down payment is 3.3%. The idea behind the higher fee for repeat users is that VA believes that you should have had an opportunity to save money for a down payment and you have already had a chance to use the benefit once, so a higher Funding fee is required.

For purchase and construction loans, members of the regular military fall into the category of first time user or subsequent user. For first time users, no down payment requires a 2.15% fee, up to 10% down payment requires a 1.5% fee, and 10% or more requires a 1.25% fee. For subsequent users, no down payment requires a 3.3% fee, up to 10% down payment requires a 1.50% fee, and 10% or more requires a 1.25% fee.

For Reserves/National Guard and Cash out loans, please contact me for more detail. 

Some are classified as exempt from paying the funding fee:

• Veterans receiving VA compensation for service-connected disabilities.
• Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay.
• Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan).

Please note that the VA has the final say.