Are you a military veteran looking to buy a home? With congressional bill, H.R. 299, there is another major homeownership benefit for veterans as of Jan. 1, 2020. Thanks to this important piece of legislation, also known as the Blue Water Navy Veterans Act, exciting changes are here for VA Home Loans.
Here’s What the VA Has to Say…
According to the VA website:
“VA does not set a cap on how much you can borrow to finance your home. However, there are limits on the amount of liability VA can assume, which usually affects the amount of money an institution will lend you. The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment. These loan limits vary by county, since the value of a house depends in part on its location.
The basic entitlement available to each eligible Veteran is $36,000. Lenders will generally loan up to 4 times a Veteran's available entitlement without a down payment, provided the Veteran is income and credit qualified and the property appraises for the asking price.”
Other Changes to VA Loans
The new law also provides that members of the military, National Guard and the Reserves are charged the same funding fees. In addition, service members who were awarded a Purple Heart will be exempt from the funding fee. Veterans receiving any disability benefits will continue to be exempt as well.
Impact on the Housing Market
Overall, the new bill allows veterans across the country more buying power along with the ability to choose from a wider selection of homes to purchase—that includes homes in costlier housing markets. These changes allow veterans to stay competitive with conventional buyers. It should also be noted that lenders will still require sufficient income and credit requirements in order for veterans to qualify for funding.
VA Home Loan Benefits
VA loans provide borrowers the following advantages:
- No down payment required: For many service members, this is the most attractive feature of a VA loan. You can become a homeowner without having to save for a down payment.
- Lower interest rates:VA loans typically offer interest rates below those of conventional loans.
- No monthly mortgage insurance premiums: These payments can cost borrowers hundreds every month, an expense you'll never have with a VA loan. VA does require payment of a guarantee fee if borrower is not exempt.
- No prepayment penalty:With a VA loan, you can sell or refinance at any time without having to pay a penalty.
- Less than perfect credit usually accepted: You don't need to have perfect credit to qualify for a VA loan.
- 100% cash out refinance, including the funding fee: Use your home's value and pull cash out to pay off debt, make repairs to your home, remodel, or spend any way you wish.
Are you eligible for the exceptional advantages that a VA Home Loan has to offer? A New American Funding loan officer knows the ins and outs of a VA loan and is ready to help you realize your dreams of homeownership. For more information, contact us today!