Over the past 20 years, we have heard all of the questions regarding VA loans, and so we reached out to Andrew Cady, a Loan Officer with Fairway Independent Mortgage Company, a lender based in Ponte Vedra Beach, Florida. (He’s also known as the “epic mortgage guy” at his company!)
Is it true that you can only have one VA loan at a time?
No, you can have multiple VA loans at the same time. The VA allows the veteran additional entitlement (known as bonus entitlement) that allows them to purchase a second home using a VA loan. However, there is a minimum purchase on these homes, and the lender would need the veteran’s Certificate of Eligibility to determine this minimum and maximum loan amount.
If you’ve lost a previous VA home to foreclosure, you lost your future eligibility.
This is false. The same bonus entitlement eligibility mentioned above applies here. Also, you have the option to restore the original entitlement by paying back the VA what their actual loss was by guaranteeing your original loan, which is often less than the foreclosed amount.
If you do a short sale with a VA home, there’s a 2 year wait to buy again.
This is also false. The Veterans Benefit Administration does not see a short sale as a derogatory event. Instead, it is looked at as the same as a charged off credit account. With that being said… if the short sale was on a VA loan, there could still be a loss to the VA and at that point, losing the bonus entitlement mentioned above AND possibly paying the loss back come into play.
The VA writes or gives loans directly.
False, the VA simply guarantees loans written by lenders. Often, we see lenders falsely masquerading as “the VA” and this is HIGHLY frowned upon by the VA – they have taken action in multiple cases against such lenders.
The VA requires the home to be perfect and there are lots of extra inspections.
This does vary by state, but here in Florida, the only additional inspections specifically required by the VA are for Wood Destroying Organisms (termite, fungi, etc.) and a water sample if the property you are purchasing has well water. Any other inspection-related requirements from the VA are also seen while working with a lender using a traditional loan.
The VA inspects the home if you will potentially purchase the home.
False, the VA does not inspect the home. However, as with any home purchase, a home inspection can help you identify any major problems and save you a lot of money in the long run, so it’s always best to have one done, regardless of what type of loan you use.
A VA loan needs extra time to close.
This is false, as in my experience, VA loans are some of the fastest we close. Mostly this is because of the inherit organization with the active duty or military veteran themselves. For example, in 2018 we averaged just 14.7 days from contract receipt to clear to close on nearly 200 VA loans.
What type of inspection does a VA home have to go through, and what types of requirements must the home meet to utilize a VA loan?
Home inspections are actually not required for a VA loan, but a home appraisal is still required. The purpose of a VA appraisal is to protect the homebuyer from purchasing a home that is unsafe, unsound, or unsanitary. The VA appraisal also will establish the market value for the property. Not every problem or recommended repair will be reported in the VA appraisal, so it is still extremely important to have a home inspection.
Do you have to have excellent credit for 0% down through a VA loan or is it extended to anyone that is eligible for a VA loan, regardless of credit score?
There is no credit score minimum from the VA for their $0 down loan. However, some lenders do have their own requirements of a score near 580, which is the most common we see.
If you are a service member or veteran hoping to use your VA-guaranteed loan through the Veterans Benefits Administration (VA), the most important thing that you can do is to use a realtor and lender that understand and have years of experience working with VA loans. At Bold City Real Estate, we love helping veterans and their families get into the perfect home here in Jacksonville and Northeast Florida.
(And Brokerage Owner, Allison Rodrigues, has nearly 15 years working to close VA loans as a Title Agent with an additional 5 years of experience working with VA loans as a Realtor… and we work with lenders that specialize in working with VA loans!)
We’d love to help walk you through the process – obtaining the Certificate of Eligibility through closing.
For more information about Andrew Cady, including contact information, visit his website: https://www.fairwayindependentmc.com/Andrew-Cady