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Veteran Affairs Loan

01

REVIEW LOAN TERMS AND
CONDITIONS ONLINE

02

ENSURE ELIGIBILITY AND
RESIDENCY REQUIREMENTS ARE MET

03

GATHER BANK AND INCOME STATEMENTS,
IRS FILINGS, DD214, AND 
OTHER FINANCIAL 
DOCUMENTS

04

GET PRE-QUALIFIED BY
FILLING OUT A LOAN
APPLICATION

05

FIND LAND OR USE
VLB AVAILABLE LAND TRACTS

06

WORK WITH VLB LOAN 
PROCESSOR TO COMPLETE 
REQUIRED DOCUMENTATION
(INCLUDES SURVEYS)

07

SCHEDULE A CLOSING DATE
HAVE FINANCING FINALIZED
DOWN PAYMENT READY

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MORE INFO

NO DOWN PAYMENT REQUIRED

Most lenders require a down payment of at least 3 percent of the home’s purchase price, according to Bankrate.com. On a $200,000 loan, that’s $6,000 due up front.

NO PMI (PRIVATE MORTGAGE INSURANCE)

Many lenders require private mortgage insurance if you make a down payment of less than 20 percent of the purchase price. The most common way to pay for PMI is through a monthly premium, added to your mortgage payment. VA loans don’t require it.

NO MINIMUM CREDIT SCORE REQUIRED

Instead, VA requires a lender to review the entire profile of the borrower in making a lending decision. On average, those who qualify for VA loans have lower credit scores than those who apply for conventional loans, according to data in the Ellie Mae Origination Insight Report. In September, the average credit score for veterans who had closed on a VA loan that month was 709 for home buyers and 701 for refinancing; for those using conventional loans, those figures were 752 and 731, respectively.

NO MAXIMUM DEBT RATIO

However, if the ratio is more than 41 percent of income, the lender must provide information about factors that could compensate for that gap.

NO LOAN MAXIMUM

Instead, VA requires a lender to review the entire profile of the borrower in making a lending decision. On average, those who qualify for VA loans have lower credit scores than those who apply for conventional loans, according to data in the Ellie Mae Origination Insight Report. In September, the average credit score for veterans who had closed on a VA loan that month was 709 for home buyers and 701 for refinancing; for those using conventional loans, those figures were 752 and 731, respectively.

SAFEGUARDS IN PLACE

There are guidelines to ensure veterans have the capacity to repay their mortgage and other debts while accounting for all living expenses. There are also minimum property requirements to ensure the property is safe, sanitary and sound.

FIGHTING OFF FORECLOSURE

There are VA staff members dedicated to helping veterans who become delinquent on their loan. In 2016, these staff members helped 97,368 borrowers avoid foreclosure. There were 18,519 foreclosures. “It’s a start-to-finish program for us, not just close the loan and we’re out,” said Greg Nelms, chief of loan policy for the VA home loan program.