VA Loans

Your Home Matters at Mabrey

A VA Loan at Mabrey

A VA Loan is a type of mortgage loan backed by the U.S. Department of Veteran Affairs. The VA serves veterans and active-duty military and their families by providing Federal guarantees to lenders that offer these loans. These guarantees allow lenders to offer mortgages that come with minimum requirements to ease the burden of a home purchase for military members.

There are several types of VA Loans including a standard home loan, Jumbo Loan, Renovation Loan and refinance options.

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Is a VA loan right for me?

A benefit that comes with serving and protecting the United States as a military member is the ability to have your home loan insured by Veteran Affairs. If you’re a current or former military member, this is a mortgage option you should give serious consideration to. Zero or low down payments offer borrowers flexibility with their loan, and often they can attain a lower interest rate than a traditional mortgage.

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Requirements

VA Loans do not require a down payment, one of the best benefits of a VA Loan. However, even a small down payment can reduce the VA Funding Fee (more on that below). Also, if the purchase price of the home is greater than its appraisal value, you could be required to make up a portion of the difference.

A VA Loan does not require mortgage insurance. However, a borrower using this type of loan will need to pay a funding fee unless the borrower has a VA recognized disability. This is a one-time fee for using the VA to help guarantee your mortgage which can be paid up front or rolled into the loan amount. A standard VA funding fee for a regular military member with a 0% down payment is 2.15% of the amount, however the funding fee can range anywhere from 0.5% to 3.30% depending on the down payment percentage and/or the type of veteran using the loan.

Mabrey Bank's credit score minimum for a VA Loan is set at 600.

Having a debt-to-income ratio, or DTI, capped at 57% should be enough to get approved for a VA Loan in most cases.

As of 2020, there is no federal VA loan limit outside of the conforming loan limit set by the Federal Housing Finance Agency (FHFA), which for most U.S. counties was $726,200 in 2023.

A lender will require a VA-approved appraiser to estimate the home’s market value and ensure that it meets the minimum property requirements while being structurally sound, safe and livable.

There are eligibility requirements for active-duty military members or veterans to meet to qualify for a VA loan. You can apply for a VA loan if…

You are on active duty and have served 90 continuous days.
You are a veteran who meets length-of-service requirements, which generally are 90 days in wartime and 181 days in peacetime.
You completed 90 days of active-duty service or six creditable years in the Selected Reserve or National Guard.
You are the surviving spouse of a veteran who died while in service or from a service-connected disability and you have not remarried. Or you remarried after age 57 or Dec. 16, 2003. Spouses of service members missing in action or prisoners of war are also eligible.

Benefits of a VA Loan

Easy to qualify as a current or former military member
No down payment required
No mortgage insurance payments
Lower interest rates than traditional loans
Lower closing costs
Assumable mortgage

VA Loan FAQs

Are VA Loans assumable?

Yes. VA Loans are assumable. That means that a borrower can take over the terms of an existing VA Loan on a mortgage, even if they themselves do not qualify for one. So, a non-military member can assume the mortgage payments and interest rate of a VA Loan on a home they are purchasing. There will be a VA funding fee for the new borrower, as well as all of the typical credit checks and other requirements by the lender.

How many times can you use a VA Loan?

As long as the borrower meets all of the eligibility requirements and remains financially qualified for a VA loan, there is no limit to the amount of VA loans that can be taken out during a person’s lifetime.

Can you have two VA Loans at the same time?

Yes, it is possible to have VA Loans simultaneously. But qualifying for two VA Loans will come down to the amount of a borrower’s “entitlement.” Every military member has a set entitlement, or the total amount the VA will insure on a home purchase. Most total entitlements in 2023 equal $181,550. Because the VA insures 25% of a home loan in case of a default, that amount will be taken out of a borrower’s entitlement (ie: $50,000 on a home loan of $200,000). In that scenario, a borrower will have $131,550 to use of their “entitlement” on another home loan. Two VA loans at once could be useful for a military member in the process of PCS orders.

Can you buy land with a VA Loan?

Yes, but the VA loan must also finance the construction of a proposed home on the land. You cannot purchase just the land itself, even if you intend to build a home on the land later.

Other options include financing the land through different means and using a VA loan to construct a home. Or you could finance both property and construction through separate loans, then refinance the construction into a VA loan.

Who is eligible & qualifies for a VA Loan?

A VA loan is meant for active-duty military members, veterans, or a surviving spouse. Here are the exact qualifications to apply for a VA Loan:

You are on active duty and have served 90 continuous days.
You are a veteran who meets length-of-service requirements, which generally are 90 days in wartime and 181 days in peacetime.
You completed 90 days of active-duty service or six creditable years in the Selected Reserve or National Guard.
You are the surviving spouse of a veteran who died while in service or from a service-connected disability and you have not remarried. Or you remarried after age 57 or Dec. 16, 2003. Spouses of service members missing in action or prisoners of war are also eligible.

How many times can you use a VA Loan?

A VA Loan will have the same county-specific loan limits set by the FHFA as a Conventional Loan. The limit for 2023 is $726,200. However, borrowers could qualify for a VA Jumbo Loan that exceeds those loan limits, but they will need to work with a lender to determine interest rate, down payment amount, credit score, cash reserves and more.