Yes, the VA loan program is a federal program. However, the government actually doesn’t make direct loans to veterans. Instead, private lenders are able to finance the loan while the Department of Veterans Affairs offers a guaranty. This guaranty protects the lender against total loss if the the buyer defaults. This provides a nice incentive for private lenders to offer loans with better terms. Lets take a look at some VA loan regulations and fees.
For the most part the VA loan program allows veterans who qualify for the VA loan to purchase a home worth up to $417,000 without putting any money down. That stands for most of the country, however there are certain parts of the country (certain high cost counties) where the veteran may be able to purchase a home that exceeds that amount, even without a down payment. This limit was adjusted for these counties in 2013. You can see that for all the Hawaii counties the VA loan limits are much higher. To find out more about loan limits in your area call Tiare Fullerton at (808) 254-3300.
VA Funding Fees go directly to the VA and that helps ensure that the VA program will continue to run for years to come. This also removes additional burdens off tax payers and veterans. Funding fees will vary based on the borrower’s circumstances, but the fees do not apply for veterans with service-connected disabilities. If this is your first time using the VA Home Loan Program you will find that the funding fee is typically 2.15 percent of the purchase price of the home. For future use of your VA Loan benefit, the fee is raised to 3.3 percent, which is still incredibly low.
VA borrowers are able to roll the funding fee into their overall loan amount, which leaves more wiggle rom for the overall purchase. The VA also limits closing costs for veterans and allows sellers to pay most or all of those expenses. Many veterans are able to purchase a home with little to no money due upon closing, which is another huge benefit of the VA loan program.
To learn more about VA loan regulations and fees give us a call. You can also learn more about VA loan eligibility.