Since November is host to Veteran’s Day and is Military Family Appreciation Month, I thought that it’s an ideal time to review the unique advantages of the VA home loan program. It’s a great program that provides servicemen and women with financing to purchase a home while they are on active duty or after they have retired from military service – often without a down payment, and with plenty of other advantages.
I also want to emphasize the growth potential for your business. In October 2019, the U.S. Census Bureau released statistics that 7.3% of U.S. adults have served in the military. That’s 18.2 million Americans! In addition, service members may qualify for a VA loan after just 90 days of active duty. Many aren’t aware that this benefit is available to them so soon.
A well-deserved reward for service and sacrifice
VA loans were created in 1944 as part of the Servicemen’s Readjustment Act, which created a variety of benefits for members of the military returning home from WWII. Although some people still assume that only military veterans can qualify for VA loans, this was amended in 1992 to include active duty servicemen and women, many reservists, and some spouses of deceased veterans.
Highlights of today’s VA loan products
The biggest advantage is that applicants may qualify with no money down. They will need “full entitlement” to do this, which simply means they aren’t already using their VA loan benefit to buy another property.
Also, your listings’ sellers are allowed to pay a portion of the buyer’s closing costs, so it’s possible for your military clients to ended up with no out-of-pocket costs by using a VA home loan to finance their home purchase.
These are just two of the advantages our military clients will appreciate. Here are more:
- They don’t have to be first-time home buyers.
- If they’ve paid off another VA loan, they can qualify for a new one.
- Mortgage rates are typically lower than conventional loans.
- Instead of mortgage insurance, VA loans require a Guarantee or Funding Fee. This fee may be financed into the loan amount for borrowers who want to keep their out-of-pocket closing expenses low. The Funding Fee may not apply to veterans with service-related disabilities.
“Don’t VA loans take forever to close?”
Sometimes borrowers and real estate agents ask me this. While this was true a long time ago, things have changed.
In the days before the internet, VA home loans could take longer to process than conventional mortgages because obtaining the required paperwork could be difficult. This is no longer a problem, and here’s why.
Almost all of the documents that may be required for VA home loans can be ordered online at the eBenefits web site at www.ebenefits.va.gov. If your buyer doesn’t have Internet access, they can permit me to order the most important document – the Certificate of Eligibility (COE). The following certificates are also available from the eBenefits site:
- Form DD-214, Certificate of Release or Discharge from Active Duty.
- Form 28-8937 is required for veterans who qualify for service-connected disability benefits.
Work with an experienced mortgage lender
When you work with an experienced mortgage loan originator, they can offer these services to you and your buyers which should eliminate any perceived disadvantages from property sellers:
- Pre-qualify your prospective buyers quickly
- Assist with obtaining a Certificate of Eligibility (COE) and other documents if necessary
- Walk your buyers through the application process
- Explain fees and closing costs in everyday language
- Provide fast, accurate status updates from application to closing
It’s always particularly rewarding to help our military reap the rewards they so richly deserve, and to thank them for their service. When you work with a loan officer who offers VA home loans, it’s a simple way you can give back.
