Veterans home loans
To provide the veterans in the country with home loans that have backing of the federal government guarantee, VA (Veteran Administration) Loan program was initiated in 1944 after passing the Servicemen's Readjustment Act (GI bill of rights). This bill ensured that eligible veterans would get home loans with no down payment and thus helped realize the dreams of thousands of veterans of having their own homes who served the country Eligibility criteria to get a VA home loan. Veterans who have done active duty for and get discharged honorably after a minimum of 90 service days if in wartime and 181 days otherwise.
Two years of service is required for veterans who started their service after the 7th of September 1980 or who served as officers starting after the 16th October 1981.
National guards and members of military reserve who satisfy certain criteria have a 6 year requirement with precise rules for the eligibility of surviving spouses.Veteran Administration home loan limitsAs per the
Veterans Benefit Act, the maximum allowable guarantee is an amount equal to 25% of the equivalent loan limit of Freddie Mac that is suggested under section 305(a) (2) of the Federal Home Loan Mortgage Corporation Act for a single family home regulated for the year in question. For example, the maximum guarantee for the year 2008 would be $104,250 which is calculated as the 25% of the equivalent 2008 Freddie Mac loan limit for a single family home, which is $417,000.
The recently signed Housing and Economic Recovery Act provides a temporary rise in the maximum guarantee amount for some of the home loans recognized by the Secretary if Veterans affairs. At present, barring Alaska and Hawaii, the maximum guarantee amount is calculated as the 25% of the bigger of the following: 1) $417,000 or 2) 125% of the median price of a single family house, up to a maximum of $729,750. Fees and other charges involved. As per the law, it is required that a fee should be paid for the processing of VA veteran home loan by all veterans who are not allowed exemption from paying loan fee. For first time home buyers, it is 2.15% for loans without down payment.
This fee is charged to reduce the burden on taxpayers through the contribution of the veterans for the loan taken for their benefit. For second timers, the fee is 3.3% for loans with no down payment. In the case of National guards and members of military reserve, the fee for loans with no down payment amounts to 2.4% of the loan amount and 1.75% for loans with a down payment of 10%. Refinancing loans carry a fee of 2.15% for first timers and 3.3% for others. For National guards and reservists, the fees are 2.4% and 3.3% respectively.
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