A VA Loan is a mortgage loan that is guaranteed by the United States Department of Veteran’s Affairs (VA). It was introduced in 1944 Serviceman’s Readjustment Act or GI Bill (and was later amended). Under the law, as amended, the VA is authorized to guarantee loans made to veterans by lending institutions including us at Lendia. The Veteran’s Administration (VA) does not make VA loans it only guarantees part of the loan. The VA loan program comes with huge advantages and has been instrumental in securing financing for service members.

What is the VA Funding Fee?

Most veterans must pay a funding fee to VA at loan closing.  This fee is used to defray the cost of administering the VA home loan program. The VA Funding Fee,
if applicable, may be financed or paid in cash. The fee is imposed on both VA purchase loans and VA refinance loans (VA Streamline Refinance (IRRRL) or VA Cash Out Refinance)

Exemptions from the VA Funding Fee

The following individuals are exempt from the Funding Fee:

1. Veterans that are receiving compensation for service connected  VA disability
2. Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay
3. Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan)
4. Veterans still on active awaiting discharge and who were rated eligible to receive compensation as a result of a pre-discharge disability examination and rating will be considered as receiving compensation as of that date; and
5. Veterans entitled to receive VA compensation for service-connected disabilities, but who are not presently in receipt because they are on active duty.

Documentation must be provided to verify eligibility for exemption and a signed VA Form 26-8937, Verification of VA Benefit-Related Indebtedness, must be completed and reviewed for eligibility of exemption prior to closing.

What are the actual VA Funding Fees?

Lendia broke down the VA funding Fees by transaction type, use type and complied the chart below to help you understand what you VA Funding Fee will be.

VA Loan limits generally follow the same published limits as Fannie Mae and Freddie Mac. For example a single family home in Orange county California the maximum loan limit is $726,525. However there is no maximum VA loan amount a veteran can obtain. There is a maximum you can borrow without a down payment and you can lookup the 2019 VA maximum loan limits by property type here. For any loan above the published VA loan limit, the borrower must pay 25% of the difference between their loan amount and the loan limit. Find out 2019 VA Loan Limits by zip code search.

To find out the VA Loan Limit in your area, give us a call at 1-949-333-4636

Lendia has also compiled a database of VA loan limits for every zip code nationwide. Check 2019 VA Loan Limits here

Lendia has compiled a selection of frequently asked questions regarding VA Loans with answers below. Although this list does not cover all questions feel free to give Lendia a call at 949-333-4636 with any other questions you may have.

What can a VA loan be used for?

A VA loan may be used to purchase a primary home or to refinance an existing mortgage loan. When buying, property types include single family homes, town homes or condominiums in VA approved projects. When used in a refinance transaction the borrower can refinance an existing VA loan or  refinance an existing non VA loan.

What are the advantages of a VA loan?

VA Loans have several advantages over other types of loans.

• Purchase Transactions: A VA Loan gives you the ability to purchase a home with no money down (100 percent financing), that is by far the biggest advantage. Although a VA funding fee may be required, an added feature is that there is never any monthly private mortgage insurance (PMI) associated with a VA loan. It is easier to qualify than traditional loans due to more relaxed credit and income guidelines and a VA loan comes with NO pre-payment penalty. In addition Interest rates are generally lower given the VA is backing of the loan.
• Refinance Transactions: VA Loans are extremely flexible when it comes to refinancing. Two great options are offered
  • VA Streamline IRRRL Refinance whereby no appraisal, no income and no assets are needed to complete the refinance. you simply go with this option to lower your rate.
  • VA Cash Out Refinance is the only program that allows you to cash out up to 100% of the value of your home for any reason.

Best of all whether it is used for a purchase or refinance the VA Loan never comes with mortgage insurance or a pre payment penalty.

How do VA loan interest rates compare to other loan types?

Generally, VA loan rates are typically lower than other loan types such as conventional loans. This is due to the fact that the loan carries a federal guarantee against loss that conventional loans do not have. It’s easier to qualify for a VA loan and they come with no private mortgage insurance and no pre-payment penalties.

Is qualifying for a VA loan more or less difficult than other loan types?

VA loan guidelines are more relaxed than conventional loans. Both loans requires income and credit checks and full underwriting approval process but when compared to conventional underwriting requirements and guidelines VA loans tend to have more relaxed or less stringent requirements.

How large of a VA loan can I qualify for?

The amount of loan you qualify for is limited to what you can afford on a monthly basis. Your monthly income, residual income, credit rating, monthly liabilities and  entitlement amount are a mong a few things that are examined when applying for a VA Loan. Check with a Lendia VA Loan Specialist  to find out what you qualify for.

Is there a maximum VA loan amount?

No, there is no maximum loan amount but depending on your county, the maximum loan amount without a down payment and assuming full entitlement, would be $417,000. High cost areas have higher loan amounts. Your entitlement plays a big role in determining your maximum along with the VA county limits.

• For Loan Amounts ≤ $417,000, Lendia’s Minimum FICO Score is 600
• For Loan Amounts > $417,000 and < $1,000,000, Lendia’s Minimum FICO Score is 620
• Lendia Offers Mega Jumbo VA IRRRL with loan amounts as high as $3,000,000. Lendia’s minimum FICO for this program is 640

Does the VA set interest rates?

No, they do not. VA mortgage rates are set by the market but are typically lower than conventional mortgage rates since the loan is guaranteed by the VA. The VA offers an easy, straightforward process for veterans to refinance.

Do I need to occupy the home I am buying?

Yes when utilizing your VA benefit to purchase a home you will be asked to certify that they will occupy the home within 60 days of closing the loan. So you can only use a VA loan to purchase a primary residence.

Can I include any closing costs associated with the purchase of a home into the loan?

No. Closing costs can not be included in the loan amount on a purchase transaction. Lendia offers several programs where we provide Lender credit to cover your closing costs. In a refinance transaction, the required closing costs may be added to the new loan balance.

What effect do credit scores have on my loan approval?

Lendia’s minimum score for a purchase or streamline IRRRL transaction is 600 and 620 for a VA Cash Out transaction. Lower scores are accepted on a case by case basis so it’s best to contact one of our loan officers to get approved.

What if I have credit problems or have in the past?

Lendia will examine your credit history before issuing a pre-approval on your home purchase. Click here for Lendia’s detailed guidelines on VA Purchase Loans.

On VA Streamline IRRRL refinance Lendia only requires a mortgage trade report showing your mortgage payment history and FICO scores. Click here for Lendia’s detailed guidelines on VA Streamline IRRRL transactions

Can the lender use the credit report I pulled off of the internet?

No, Lendia will have to obtain our own credit report and scores when you apply for a purchase or refinance loan. We always recommend that you know your scores and credit worthiness before you apply though.

If I get pre-approved with Lendia, should I stay with the Lendia’s issued pre-approval?

Yes, Lendia will be issuing the loan and disbursing the funds for your loan, the VA does not. Although we do recommend you shop your loan diligently ahead of time we do also recommend that once you get pre-approved with Lendia you limit running your credit everywhere else as that does affect your score. In addition keep in mind that obtaining multiple pre-approvals will require you to redo all elements of the approval process.

What is the VA funding fee and do I have to pay it?

The VA funding fee is collected by the VA on all VA loan transactions. The funding fee is used by the VA to offset claims against the program due to defaults. Veterans that do not meet the exempt requirements are required to pay the funding fee. Find out more about Funding Fees.

Can the VA funding fee be included in the loan?

Yes, the VA funding fee can be included in the loan as long as it does not result in the loan going over the county maximum loan amount for the area the property is located in. Find out more about Funding Fees.

Why is the APR higher than my locked loan rate?

The APR is the cost of your mortgage loan as a yearly rate. The APR is generally higher than the interest rate disclosed on the Promissory Note as it takes into account ALL costs of credit incurred to obtain the loan. The APR includes interest, origination fees, discount points, and other fees you may have agreed to pay in conjunction with the loan. The APR is a good tool for comparison purposes.

What is the maximum allowable VA IRRRL loan size?

Lendia Offers Mega Jumbo VA IRRRL with loan amounts as high as $3,000,000. Lendia’s minimum FICO for this program is 640

Maximum loan amount for a VA IRRRL is the sum of

• Existing VA loan balances plus
• Late payments and late charges, plus
• Allowable fees and charges (includes up to two discount points), plus
• The VA funding fee

Can I change the borrower-of-record with a VA Streamline Refinance?

Generally, the party(ies) obligated on the original loan must be the same on the new loan (and the veteran must still own the property). It is at the discretion of Lendia to require credit qualification in the cases where the obligor changes.

The following table has been provided as a guide to help determine when a change in obligor may or may not be acceptable.  Final determination of the acceptability is at the discretion of Lendia.

An IRRRL is possible in all of the following scenarios: Divorced veteran alone; Veteran and different spouse; and, spouse alone because the veteran died. An IRRRL is not possible for a divorced spouse alone, or a different spouse alone because the veteran died.

Can I use the VA Streamline Refinance for an investment property?

Yes, with Lendia you can use the VA Streamline Refinance for an investment property. You must certify that you previously occupied the property as your primary home. The property does not currently have to be your primary residence. Lendia requires that your FICO score for such a transaction be no lower than 620.

Can I get a VA Loan if I previously modified or restructured my VA loan?

Yes Lendia may offer VA Loans on previously modified or restructured VA Loans on both purchase transactions and refinances as follows:

• The modification/restructure adjusted the terms and /or payment only.
• The mortgage must be current with no lates within the last 12 months

Do I have to be eligible for a better interest rate to qualify for a Streamline Refinance?

• If you are refinancing from a fixed rate mortgage to another fixed rate mortgage then YES your new rate and payment has to be lower – it has to be beneficial to you
• If you are refinancing and decide to get a lesser term but this results in the payment being higher than you current one then that is OK as well.
• If you are refinancing from an adjustable rate mortgage (ARM) to a fixed rate mortgage with a higher rate then that is OK as well since you are moving to a more stable product

Do I have to go through the credit check and appraisal process again when refinancing?

Lendia will pull a mortgage trade report (to check your FICO scores) when you apply for a VA Streamline IRRRL refinance. No appraisal is required on a VA Streamline IRRRL refinance. If you are applying for a VA Cash Out Refinance then Lendia requires a full credit check and an appraisal on those transactions.

Can I get a VA Loan if I previously had a foreclosure?

Yes you can get a VA Loan with Lendia if you previously had a foreclosure. Lendia’s requirements are:

• 2 year seasoning or 24 months gap between your foreclosure and the application date of the new VA purchase loan
• Lendia requires a detailed explanation  with documentation supporting the circumstances that led to the foreclosure.
• Your credit has to be reestablished and you have no late payments on any other credit since the foreclosure
• If your prior foreclosure was on a VA Backed loan Lendia will need to check your Certificate of Eligibility to ensure sufficient entitlement and/or restoration of entitlement.

Can I get a VA Loan if I previously had a short sale?

Yes you can get a VA Loan with Lendia if you previously had a short sale. Lendia’s requirements are:

• No waiting period on getting a new VA Loan from the time of your short sale
• No mortgage lates in the 12 months prior to the short sale
• Lendia requires a detailed explanation  with documentation supporting the circumstances that led to the short sale

Can I get a VA Loan if I had a bankruptcy?

Yes You can get a VA loan with Lendia is you previously had a Bankruptcy according to the following condition:

• A Chapter 7 bankruptcy may be disregarded if discharged more than 2 years ago
• A Chapter 13 Bankruptcy may b disregarded if the following is provided
  • Documentation of debt restructure
  • Most recent 12 months acceptable payment history in accordance to the Ch. 13 Approved Plan
  • Court’s approval to proceed with VA loan
  • If borrower converts a Chapter 13 into Chapter 7 that was subsequently discharged within the past 12 months, then refer to Chapter 7 guidance above.

Do I need my Certificate of Eligibility (COE) for a Streamline Refinance?

No it is not needed since you used your Certificate of Eligibility to get your first VA loan. Lendia can always help obtain it for you regardless.

Can I use VA loans for a no money down mortgage?

Yes. The VA loan allows for 100% financing with no down payment and no mortgage insurance as well.

One of the most common questions asked by service men and women is whether they are eligible for a VA Loan. The fastest way to find out if you are eligible for a VA loan is to contact a VA Loan specialist at Lendia either by calling 949-333-4636 or by completing this short contact request form. We can help you obtain a certificate of eligibility from the VA.

While the certificate of eligibility is the best way to find out if you are eligible Lendia has put together an article detailing out VA loan eligibility requirements for the different military and service branches as well as service time periods.

Check out today’s VA loan rates

A one time upfront payment called a VA Funding Fee is required to be paid to the VA at closing when obtaining a VA home loan. This funding fee goes directly to the VA to ensure the program keeps running for future generations of military homebuyers by removing any additional burdens off tax payers and veterans. The funding fee varies by transaction type (purchase or refinance) and by down payment amount (if any) and does not apply for veterans with service-connected disabilities.

The Funding Fee can be rolled into the loan (i.e. you can finance the funding fee) or can be paid separately (by borrower or with lender credit or seller credit (if it’s a purchase transaction)).

Lendia complied a few charts that show the Funding Fee amounts

FHA loans are home loans backed by the Federal Housing Administration (FHA), a government agency created to help home buyers qualify for a mortgage. The FHA provides mortgage insurance on loans made by FHA-approved lenders, protecting them from the risk of borrower default.

Because lenders are protected, they can afford to be more lenient when offering mortgages. For example, this means it’s possible to get an FHA loan with a lower credit score than other types of loans.

To offset this, FHA loans will typically include mortgage insurance as part of the borrower’s responsibility.

VA Loans are one of the most powerful and unique loan programs that are only available to military homeowners and homebuyers. When a military homebuyer is looking for a home they can put no down payment (0% down payment) and pay no mortgage insurance.

The main advantages of VA Loans are:

1. No down payment when purchasing your first home.
2. No Private Mortgage Insurance (PMI)
3. Typically VA loan rates are lower than conventional mortgage rates. Learn more about Lendia’s Rates
4. No pre-payment penalty meaning you can pay off your loan anytime with no penalty
5. Ability to finance the VA Funding Fee into the loan (if applicable)
6. More lenient credit and income guidelines as opposed to conventional loans
7. VA Loan refinancing
   1. Ability to refinance your loan to a lower rate with no appraisal
   2. Ability to refinance your loan and get cash out (up to 100% of the value of the home)
8. Assumable financing meaning you can transfer your VA loan to a future home buyer if they are VA eligible.

The table below illustrates how a VA Loan compares to a traditional or conventional home loan.

FHA loans are home loans backed by the Federal Housing Administration (FHA), a government agency created to help home buyers qualify for a mortgage. The FHA provides mortgage insurance on loans made by FHA-approved lenders, protecting them from the risk of borrower default.

Because lenders are protected, they can afford to be more lenient when offering mortgages. For example, this means it’s possible to get an FHA loan with a lower credit score than other types of loans.

To offset this, FHA loans will typically include mortgage insurance as part of the borrower’s responsibility.

VA Loans are one of the most powerful and unique loan programs that are only available to military homeowners and homebuyers.

When a military homebuyer is looking for a home they can put no down payment (0% down payment) and pay no mortgage insurance.

The VA Loan is a federal program, the government generally does not make direct loans to veterans. Instead, private lenders including Lendia finance the loan while the Department of Veterans Affairs (the VA) offers a guaranty.

The table below illustrates how a VA Loan compares to a Conventional Loan

The table below illustrates how a VA Loan compares to an FHA Loan