The VA home loan program helps veterans purchase a home with little or no down payment, provided as one of the benefits, for their service for their country in the Armed Forces. The Veterans Administration issues a guaranty to lenders based on a person’s “entitlement” due to their service period to protect the lenders against loss from a homeowner’s default. The guaranty is designed to replace the protection a lender would normally receive by requiring a down payment.
The current maximum entitlement is up to $50,750. Many lenders will generally agree to make no down payment loans to qualifying veterans up to $203,000, which is four times the entitlement. Normally a lender will require 25% down payment for anything over that amount. This guaranty is only issued to veterans (with their spouses, if married). If a veteran joins in title with a non-veteran other than their spouse, VA will decrease the amount of guaranty by the percentage of shared ownership. For example, if two unmarried people joined in title equally and one was the eligible veteran, the VA would issue a guaranty of 50% of its normal amount.
For more information on VA Loans and other qualification requirements for mortgages, contact our offices in Joplin, MO and let us know how we can help you.