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Loan Guaranty Service

Loan Guaranty Service. What is a VA Guaranteed Home Loan?. VA-Guaranteed Home Loans are made by private lenders, such as banks, mortgage companies and credit unions. These loans are made to eligible Veterans for the purchase of a home for their own personal occupancy.

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Loan Guaranty Service

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  1. Loan Guaranty Service

  2. What is a VA Guaranteed Home Loan? VA-Guaranteed Home Loans are made by private lenders, such as banks, mortgage companies and credit unions. These loans are made to eligible Veterans for the purchase of a home for their own personal occupancy. VA guarantees the loan to protect the lender against loss if the payments are not made. 2

  3. What can a VA-Guaranteed Home Loan be used for? VA-Guaranteed Home Loans can be used to: • Buy or construct a home • Buy a condo • Buy a manufactured home and lot • Repair, alter, renovate and improve a home • Refinance an existing lien • Can be used for property located in the US, its territories or possessions • Cannot guarantee Business Loans (contact SBA) • Cannot guarantee Farm Loans (unless residence) 3

  4. What are some advantages of a VA-Guaranteed Loan? Advantages of VA-Guaranteed Home Loans • Generally no down payment • No Private Mortgage Insurance (PMI) • Freely negotiable interest rate • No prepayment penalty • Benefit never expires - can be used more than once • Entitlement may be restored • VA assistance to Veteran borrowers experiencing temporary financial difficulty (877) 827-3702 4

  5. Loan Limits There is no maximum loan amount; however, there are maximum loan “limits” – loans above this limit will likely require a downpayment. Loan limits vary by county. • Minimum guaranteed loan limit is $417,000 (assuming full entitlement) • Find the county loan limit: http://www.benefits.va.gov/homeloans/ 5

  6. Native American Direct Loans VA makes direct loans to Native Americans living on Trust Land (reservations, homelands) • Maximum loan limit is the same as for guaranteed loans • Veterans must meet credit and income qualifications 6

  7. Funding Fee The law requires a funding fee to be paid on VA loans • Fee ranges from .5% to 3.3%, depending on loan type and if first-time or second-time user • Fee can be included in the loan • Fee is waived for Veterans entitled to VA disability compensation* and surviving spouses in receipt of Dependency and Indemnity Compensation 7

  8. What are the steps to obtaining a home? Here are the typical steps to obtaining a VA-Guaranteed Home Loan: • Apply for a Certificate of Eligibility (eBenefits) • Obtain pre-approval from a lender • Find a property to buy • Complete application process with lender • Lender obtains a VA appraisal • Close the loan and move in 8

  9. Eligibility • Active Duty: Generally, must serve 24 months of continuous active duty or the full period for which called or ordered to active duty (at least 90 days) unless discharged for a service-connected disability. • Guard/Reserve: Requires a total of 6 years of service unless activated or discharged for service-connected disability. • Certificate of Eligibility (COE) shows Servicemember’s or Veteran’s eligibility for the benefit - COE must be updated upon separation/retirement 9

  10. Requirements • Must satisfy eligibility criteria • Loan must be for eligible purpose • Must occupy or intend to occupy (spouse and dependent children may satisfy occupancy requirement) • Income must be stable, reliable, and sufficient • Must have satisfactory credit • Must satisfy lender requirements 10

  11. Useful Information • Loan Guaranty Service: http://www.benefits.va.gov/homeloans/ • VA Pamphlet 26-7, VA Lender’s Handbook • Title 38 – United States Code, Chapter 37 • Regional Loan Centers: http://www.benefits.va.gov/homeloans/rlcweb.asp 11

  12. Specially Adapted Housing/Special Home Adaptation Grants • SAH grant programs improve the quality of life for severely disabled Veterans by allowing them to live more independently in their homes. • Over the last two years, the SAH workload has increased significantly; the number of grants approved has increased over 50%. • Legislative changes have expanded eligibility criteria, allowed for multiple grant uses, increased grant amounts and allowed for yearly adjustments based on a cost of construction index. 

  13. Specially Adapted Housing/Special Home Adaptation Specially Adapted Housing (SAH)/Special Home Adaptation (SHA) Grants can be used to help accommodate home, purchase adapted home, purchase land to build home, build home on land owned by veteran. Temporary Residence Adaptation (TRA) Grants can be used to modify the home of a family member. CURRENT Maximum Amounts • SAH: $64,960 • SAH TRA: $28,518 • SHA: $12,992 • SHA TRA: $5,092

  14. SAH Program Structure 38 USC §2101(a) Specially Adapted Housing (SAH) Grant Eligibility Loss or loss of use of both lower extremities Blindness in both eyes plus loss of one lower extremity Loss or loss of use of one lower extremity together with: 1. residuals of organic disease or injury, or 2. the loss or loss of use of one upper extremity Loss of both upper extremities, at or above the elbows Certain severe burn injuries

  15. Specially Adapted Housing Public Law 112-154 changes • Applies to Veterans who served and became permanently disabled after September 11, 2001 due to the loss or loss of use of one lower extremity, severely affecting the functions of balance or propulsion • Expires September 30, 2013

  16. SHA Program Structure 38 USC §2101(b) Special Housing Adaptation (SHA) Grant Eligibility • Blindness in both eyes with 20/200* visual acuity or less • Anatomical loss or loss of use of both hands • Certain respiratory ailments • Certain severe burn injuries

  17. SAH/SHA Grants • Can be used a maximum of 3 times • Can be adjusted annually based on the Turner Index • In FY2010,VA approved • 1,421 §2101(a) grants totaling over $64.97M • 128 §2101(b) grants totaling over $1.17M

  18. TemporaryResidence Adaptation Grant 38 USC §2102A Temporary Residence Adaptation (TRA) Grant Eligibility • Based on eligibility for 2101(a) or 2101(b) grant • Used to modify the home of a family member • Can be used only once • Is counted as one of the three allowable uses • Is deducted from the total maximum grant amount*

  19. St. Paul Cleveland Denver Roanoke Phoenix Atlanta 5 St. Petersburg Houston Honolulu Regional Loan Centers

  20. Questions? You can find a list of RLCs and Specially Adapted Housing agents (and their contact information) at: http://benefits.va.gov/homeloans/ Betty Rhoades Chief, Specially Adapted Housing betty.rhoades@va.gov Thank you for your time!

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