Department of Veteran Affairs – VA
Section 501 of The Servicemen's Readjustment Act, more commonly known as the GI Bill of Rights which was signed into law in 1944 provides for a real estate loan, partially guaranteed by the Department of Veteran's Affairs (VA). The VA loan is a mortgage loan made by a lender which is guaranteed by the federal government in the event of a default by the homeowner. As a result, lenders are able to provide loans to veterans with less stringent guidelines as a conventional loan. This has made the dream of homeownership possible for over 20 million veterans and their families.
VA Funding Fee
The law requires that VA be paid a funding fee on guaranteed loans. This fee goes to the VA to ensure the program stays funded to provide loans to future military personnel. The funding fee is determined by a veteran's type of service and does not apply to those with service-connected disabilities. For example, for regular military, the fee is typically 2.15% of the loan amount if using the program for the first time and 3.3% for any subsequent use. The funding fee may be financed into the loan amount (over and above the appraised value of the property).
Why is the VA Loan such a Great Loan for Veterans?
Although this program was created for service men and women returning from World War II to help them assimilate back into civilian life, it is still going strong today. Some of the reasons include:
- No down payment
- Low interest rate
- No Private Mortgage Insurance (PMI)
- Fewer restrictions
- Seller can pay up to 4% of buyer's closing costs and prepaids
- Maximum loan amount – $417,000
We specialize in VA loans in Spring, Woodlands, Conroe and Houston Texas.
If you're a U.S. veteran wanting the comforts of a home for you and your family, call me at 281-928-7994 or click Apply Now!