VA fixed rate
As a benefit to veterans, the Department of Veteran Affairs guarantees repayment of loans made to veterans with no down payment, in most cases, and liberal qualifying guidelines. This makes it easy for veterans to finance their homes.

VA Loan Program Synopsis

Borrowers	Features
Low Cash To Close	• Up to 100% financing • Seller can pay all closing costs and/or discount points, with no limit! • Seller can pay prepaids, funding fee and temporary buy down funds up to a maximum of 4 points • No cash reserves required after closing
Home Affordability	• Single qualifying ratio • Alternative income sources must continue only 5 years
Easy Qualification	• No cash reserves required after closing • Liberal qualifying ratio • Alternative income sources must continue only 5 years
Speed	• VA loan inhouse underwriting*
Special Advantage	• Some loans are assumable with qualifying

Some of the best loans available. The goal is to make housing affordable and more accessible for U.S. veterans. Available to veterans, reservists, active-duty personnel and un-remarried surviving spouses of veterans with 100% entitlement.

The features here are excellent. No down payment. And seriously competitive interest rates. No application fee and lower closing costs. And no cash reserve is required for the purchase of an owner-occupied single-family residence.

Administered by the U.S. Department of Veterans Affairs, but made available through us, these are fixed rate loans. Maximum loan amounts vary by county and state.

VA loans are available for home buying and, in most states, for refinancing.

Why a VA loan?
The more you know about our home loan programs, the more you will realize how little "red tape" there really is in getting a VA loan. VA loans are often made without any down payment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans. Aside from the veteran's certificate of eligibility and the VA-assigned appraisal, the application process is not much different than any other type of mortgage loan.

What is a VA guaranteed loan?
VA's guaranty on the loan protects the lender against loss if the payments are not made, and is intended to encourage lenders to offer veterans loans with more favorable terms. The amount of guaranty on the loan depends on the loan amount and whether the veteran used some entitlement previously. With the current maximum guaranty, a veteran who hasn't previously used the benefit may be able to obtain a VA loan. Qualified veterans and active duty military can obtain a loan of up to $417,000, or $625,500 in high-cost areas, with no money down. The amount depends on the borrower's income level and the appraised value of the property. Let a knowledgeable, courteous VA loan specialist help you to maximize your VA benefits today!

VA loans - who is eligible?
Almost 30 million veterans and service personnel are eligible for VA financing. Even though many of that 30 million have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.

• Veterans with active duty service, that was not dishonorable, during World War II and later periods are eligible for VA loan benefits.
• World War II (September 16, 1940 to July 25, 1947)
• Korean conflict (June 27, 1950 to January 31, 1955)
• Vietnam era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days' service.
• Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days' active service.
• Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years.
  
• Persian Gulf Conflict—Generally, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged are eligible.
• Selective Reserve—Members of the Selected Reserve, including National Guard, who are not otherwise eligible and who have completed 6 years of service and have been honorably discharged or have completed 6 years of service and are still serving may be eligible. Expanded eligibility for Reserves and National Guard individuals will expire October 28, 1999. Contact the local VA office to find out what is needed to establish eligibility. Reservists will pay a slightly higher funding fee than regular veterans.

Financing - a good deal for veterans
Before arranging for a new mortgage to finance a home purchase, veterans should consider some of the advantages of VA home loans:

• Most important consideration, no down payment is required in most cases.
• Qualified veterans and active duty military can obtain a loan of up to $417,000, or $625,500 in high-cost areas, with no money down.
• No monthly mortgage insurance premium to pay.
• Limitation on buyer's closing costs.
• Thirty year loans with a choice of repayment plans:
  1. Traditional fixed payment (constant principal and interest; increases or decreases may be expected in property taxes and homeowner's insurance coverage);
  2. Adjustable Rate Mortgage-ARM (lower initial interest rate may allow qualification for a higher loan amount. Annual interest rate adjustments are limited to 1 percent and maximum increase in the interest rate over the life of the loan is capped at 5 percent).
  3. Graduated Payment Mortgage-GPM (low initial payments which gradually rise to a level payment starting in the sixth year)
• For most loans for new houses, construction is inspected at appropriate stages to ensure compliance with the approved plans, and a 1-year warranty is required from the builder that the house is built in conformity with the approval plans and specifications. In those cases where the builder provides an acceptable 10-year warranty plan, only a final inspection may be required.
• An assumable mortgage, subject to VA approval of the assumer's credit.
• No early prepayment penalty.

Had a VA loan before?
Veterans who have already taken out a VA home loan in the past may be eligible for remaining entitlement for any unused previous balance. Because entitlement amounts have increased over time, many people with prior VA loans may be eligible for more money now than they were previously. Complete our form or call us today to find out if you qualify.

Restoration of Entitlement
Veterans can have previously-used entitlement "restored" to purchase another home with a VA loan if:

• The property purchased with the prior VA loan has been sold and the loan paid in full, or
• A qualified veteran-transferee (buyer) agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller. Remaining entitlement and restoration of entitlement can be requested.

VA Appraisal - Certificate of Reasonable Value
The CRV (Certificate of Reasonable Value) is based on an appraiser's estimate of the value of the property to be purchased. Because the loan amount may not exceed the CRV, the first step in getting a VA loan is usually to request an appraisal. The appraiser will send a bill for his or her services to the requester according to a fee schedule approved by the VA. To simplify things, VA and HUD/FHA (Department of Housing and Urban Development/Federal Housing Administration) use the same appraisal forms. Also, if the property was recently appraised under the HUD procedure, the HUD conditional commitment can usually be converted easily to a VA CRV.

It is important to recognize that while the VA appraisal estimates the value of the property, it is not an inspection and does not guarantee that the house is free of defects. Home buyers should be encouraged to carefully inspect the property themselves, or to hire a reputable inspection firm to help in this area. VA guarantees the loan, not the condition of the property.

Application
The application process for VA financing is no different from any other type of loan. In fact, the VA application form is the same as that used for HUD/FHA and Conventional loans. We'll verify the applicant's income and assets, and obtain a credit report to see that other obligations are being paid on time. If all is well and the appraised value of the property is enough to cover the loan needed, we can, in most instances, then close the loan under the VA's automatic procedure. Only about 10 percent of VA loan applications have to be submitted to a VA office for approval before closing.

Requirements for Loan Approval
To obtain a VA loan, the law requires that:

• The applicant must be an eligible veteran who has available entitlement.
• The loan must be for an eligible purpose.
• The veteran must be a satisfactory credit risk.
• The veteran must occupy or intend to occupy the property as a home within a reasonable period of time after closing the loan.
• The income of the veteran and spouse, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the costs of owning a home, take care of other obligations and expenses, and have enough left over for family support.

Costs of Obtaining A VA Loan
Funding fee (as of Oct. 1, 1993)

A basic funding fee of 2.00 percent must be paid to the VA by all but certain exempt veterans. A down payment of 5 percent will reduce the fee to 1.50 percent and a 10 percent down payment will reduce it to 1.25 percent.

A funding fee of 2.75 percent must be paid by all eligible Reserve/National Guard individuals. A down payment of 5 percent or more will reduce the fee to 2.25 percent and a 10 percent down payment will reduce it to 2.00 percent.

The funding fee for loans to refinance an existing VA home loan with a new VA home loan to lower the existing interest rate is 0.5 percent.

Note: For all VA home loans, the Funding Fee may be paid in cash or it may be included in the loan.

Other Closing Costs
Reasonable closing costs may be charged by the lender. These costs may not be included in the loan. The following items may be paid by the veteran purchaser, the seller, or shared. Closing costs may vary among lenders and also throughout the nation because of differing local laws and customs. Here are some of the costs you may be expected to pay at closing:

• VA Appraisal
• Credit Report
• Loan Origination Fee (usually 1 percent of the loan)
• Discount points
• Title Search and Title Insurance
• Recording Fees
• State and/or Local Transfer Taxes, if applicable
• Survey