VA Loan Programs
The US Department of Veterans Affairs (VA) offers several different VA loan programs to help servicemembers and veterans with a home purchase or refinance. Being located near Naval Base Ventura County, there are many Ventura County residents who may be able to take advantage of one or more of the programs that they offer. Below is a brief description of some of the more popular programs that the VA has to offer. As criteria for any loan program is subject to change, it is recommended that you refer to the VA Home Loans page for the most up-to-date information.
VA Purchase Loan
VA purchase loans are handled by private lenders, but the VA guarantees a portion of it, meaning that the VA will cover any losses that the lender might incur due to the borrower missing payments. This guarantee helps veterans get more favorable terms than are usually offered to non-veterans, including the following:
- No down payment as long as the purchase prices does not exceed the appraised value of the home
- No Private Mortgage Insurance (PMI) is required
- The VA sets a limit on the amount of closing costs the lender can charge the borrower
- The lender cannot charge the borrower any prepayment penalties for paying off the loan early
- In some circumstances, the VA may provide financial assistance to those who are having difficulty making payments
A VA purchase loan can be used in the following circumstances:
- Buy a home
- Buy a townhouse or condo in a VA-approved complex
- Build a home
- Purchase a home and improve/repair it
- Buy a manufactured home
- Buy a lot
VA Cash-Out Refinance Loan
The VA Cash-Out Refinance Loan is for servicemembers or veterans who want to take cash out of their existing equity. Even more, the VA Cash-Out Refinance Loan can be used by servicemembers or veterans that currently have a non-VA loan to refinance into a VA loan. Just like the VA purchase loan, the VA will guarantee up to 100% of the appraised value of your home.
VA Interest Rate Reduction Refinance Loan
For those servicemembers or veterans looking to lower their interest rate on an already existing VA loan, there is the VA Interest Rate Reduction Refinance Loan (IRRRL). The IRRRL can also be used to refinance from an Adjustable Rate Mortgage (ARM) to a fixed rate mortgage. Unlike the cash-out refinance loan, the IRRRL is not used to take cash out of the existing equity. Some other facts about the IRRRL include:
- No appraisal is needed when applying
- The borrower can either include the costs in the new loan amount or pay a higher interest rate to avoid having to pay the costs out of pocket.
- Lenders are not required to give a borrower an IRRRL. However, borrowers can find another VA lender to apply for an IRRRL.
- Terms for an IRRRL may vary between VA lenders
- It can only be used to refinance a home that you have already used your VA loan eligibility on.
- It must be a VA loan to VA loan refinance.
Native American Direct Loan
The Native American Direct Loan (NADL) program began in 1992 and provides home loans to Native American Veterans to either buy, construct, or improve a home that is on Federal Trust Land. The NADL can also be used to refinance a previous NADL in order to achieve a lower interest rate. The fee to purchase a home under this program is currently 1.25% of the loan value, or a minimum of 0.5% for a refinance. In order to obtain a NADL, there must be a signed Memorandum of Understanding (MOU) between the tribal government and the Secretary of Veterans Affairs. Some of the benefits to using this program include no down payment, easy qualification, no PMI, a fixed interest rate, and a dedicated VA staff to assist you.
VA Housing Grants
The VA also provides grants to veterans and servicemembers with certain disabilities to help either buy, construct, or modify a home to accommodate disabilities. The two grants they have available are the Specially Adapted Housing (SAH) grant and the Special Housing Adaptation (SHA) grant.
To be eligible for a SAH grant, you must meet one of the following conditions:
- Either loss of use or total loss of both legs
- Either loss of use or total loss of both arms
- Blindness in both eyes, plus either loss of use or total loss of one leg
- Either loss of use or total loss of one lower leg and residuals of an organic disease
- Either loss of use or total loss of one leg AND either loss of use or total loss of one arm
- Certain severe burns
- If the loss of use or total loss of one or more lower extremity occurred after Sept 11, 2001, and you are unable to move about with the use of braces, crutches, canes, or a wheelchair.
To be eligible for a SHA grant, you must meet one of the following conditions:
- Blindness in both eyes with less than 20/200 vision
- Either loss of use or total loss of both hands
- Certain severe burns
- Certain severe respiratory injuries