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VA Loans

A VA financing is a mortgage in the United States guaranteed by the U.S. Department of Veterans Affairs (VA). The financing may be issued by qualified lenders.

The VA financing was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry). The basic intention of the VA direct home financing program is to supply home financing to eligible veterans in areas where private financing is not generally available and to help veterans purchase properties with no down payment. Eligible areas are designated by the VA as housing credit shortage areas and are generally rural areas and small cities and towns not near metropolitan or commuting areas of large cities.

The VA financing allows veterans 103.15 percent financing without private mortgage insurance or a 20 per cent second mortgage and up to $6,000 for energy efficient improvements. A VA funding fee of 0 to 3.15% of the financing amount is paid to the VA; this fee may also be financed. In a purchase, veterans may borrow up to 103.15% of the sales price or reasonable value of the home, whichever is less. Since there is no monthly PMI, more of the mortgage payment goes directly towards qualifying for the financing amount, allowing for larger financing with the same payment. In a refinance, where a new VA financing is created, veterans may borrow up to 90% of reasonable value, where allowed by state laws. In a refinance where the financing is a VA loan refinancing to VA loan (IRRRL Refinance), the veteran may borrow up to 100.5% of the total loan amount. The additional .5% is the funding fee for an VA Interest Rate Reduction Refinance.

VA loans allow veterans to qualify for loans amounts larger than traditional Fannie Mae / conforming loans. VA will insure a mortgage where the monthly payment of the loan is up to 41% of the gross monthly income vs. 28% for a conforming loan assuming the veteran has no monthly bills.

The maximum VA loan guarantee varies by county. As of 1 January 2011, the maximum VA loan amount with no down payment is usually $417,000, although this amount may rise to as much as $1,094,625 in certain specified “high-cost counties”. VA also allows the seller to pay all of the veteran’s closing costs as long as the costs do not exceed 6% of the sales price of the home.


This material is not from HUD or FHA and has not been approved by HUD or any government agency. Equal Housing Opportunity Lender

Clift Enterprises Inc.
CL-68323

360-683-4848 office
224 W Washington #103, Sequim, WA 98382

360-457-7654 office
330 E. 1st St., Ste 3, Port Angeles, WA. 98362

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