• FHA loans are available with a credit score of 580 and a down payment as low as 3.5%.
• You may qualify for an FHA loan after a foreclosure or bankruptcy if you’ve maintained good credit.
• You can use gift money to cover up to 100% of the down payment.

VA Residual income requirements are important in order to qualify for a VA loan. You must meet a specific residual income threshold, which varies depending on the size of your family and where you live.

Residual income is the amount of net income remaining each month after deduction of all of your major expenses (including housing, taxes, and debt payments). What is left over is to cover family living expenses such as food, healthcare, clothing, gasoline and other regular household and family needs.

Residual income is sometimes confused for debt-to-income ratio, which is your monthly income vs. your monthly debt. Your debt-to-income ratio is used by your lender to determine VA loan eligibility. However, the Department of Veterans Affairs wants to make certain that you have enough money left over to take care of your day-to-day expenses.

The VA’s minimum residual income is considered a guide instead it’s most often considered in conjunction with other credit factors.

Factors that are included in the VA Residual Income calculation are, but not limited to:

Location of property as defined by the VA using the residual income chart listed below

• Loan amount
• If the veteran or spouse is an active-duty or retired veteran and is able to take advantage of the benefits resulting from the use of military facilities located near the subject property, the residual income requirement is reduced by 5%
• Number of persons residing in the home, regardless of relationship to the veteran, and/or whether they will take title to the property
• Non-taxable income may not be grossed up when calculating the veteran’s residual income
• Even children who reside in the home part-time must be included in the household size

The following items must be deducted from the total gross income when calculating residual income:

• All items used in calculating the ratio
• Maintenance and utility expense
• Social Security taxes – 4.200% of monthly income
• Federal income taxes
• State income taxes

VA Residual Incomes by Geographic Region for loan Amounts $79,999 and below

VA Residual Incomes by Geographic Region  for Loan Amounts of $80,000 and above

Key to VA Residual Income Geographic Regions

• You’ll have to pay an upfront mortgage insurance premium (MIP) as well as annual MIP, which is included in your monthly mortgage payment.
• FHA loans are not available for second homes or investment properties.
• In most counties, the FHA loan limits are less than conventional loans.

At Lendia we make the process for applying for a VA loan extremely simple. Simply follow the steps below and if you are unfamiliar with any of them give us a call at 949-333-4636 and speak to a Lendia VA loan specialist and we will gladly explain it.

1. Find out if you are eligible for a VA Loan and obtain a Certificate of Eligibility we can help with that
2. If this is your first home you need to know how much you can afford and what your maximum purchase price is. Let us help you figure that out
3. If you are refinancing you have three options:
   1. Streamline Refinance your existing VA loan to lower your payment and interest rate
   2. Refinance your existing VA loan and get cash out up to 100% of the value of your home (income and liabilities are important here).
   3. Refinance an existing FHA or Conventional loan into a VA loan (income and liabilities are also important here)

Steps To Buying A House:

Before you start looking for that perfect home, you need to ensure that you have a strong credit score, money saved for a down payment and closing costs, preapproval for a loan, and the appropriate representation. You need to be prepared.

The best way to prepare is to know exactly what to expect. Here are the 12 steps that you will need to accomplish before you can receive the keys for your new home.

10 Steps to Buying Your Home with a VA Loan

1. Budget: Figure out what monthly payment you are comfortable with. Use our mortgage calculator or have Lendia figure out how much you can afford
2. Call a Lendia VA loan specialist at 949-33-4636 and let us help you get your Certificate of Eligibility
3. Find out how much you are approved for (in terms of purchase price and loan amount).
4. Have a Lendia  VA loan specialist go through the property types you are eligible for with a VA loan
5. Contact a Real Estate Agent and start looking for homes in the areas you wish to move into
6. Start making offers and present your Lendia Approval Letter with your offers to the sellers so they know you are a serious and VA loan approved buyer
7. Once you are under contract we begin processing your VA loan at which point we request documents from you see our VA purchase loan checklist and VA Contract Guidelines
8. While you are under contract with the sellers you will get your home inspected and appraised while we work on underwriting your loan
9. Once we are done underwriting your VA loan we issue your final loan documents for you to sign
10. After you sign we fund your loan (disburse funds) and Title or Escrow records the new grant deed with the county putting the home in your name

Before you begin the process of buying a house, you want to make sure that you’re actually in a position to take on this significant milestone. That’s why the first step is to check your credit score and review your finances.

Obtaining a loan is not always an easy feat. All mortgage lenders will look at your credit score and financial history before agreeing to provide you with a loan. You should be one step ahead of them.

To obtain a conventional loan, you’ll need a credit score of 620 or higher. However, if you qualify for an FHA loan, the minimum credit score requirement is 580.

Does your credit score meet the requirements? If you’re unsure, you can find out by contacting Lendia.

Your credit and financial history will dictate whether you’re able to obtain a mortgage and at what interest rate. Buyers with higher credit scores tend to secure better interest rates, so you must get a sense of where you stand before you get deeper into the process.

To help you understand what collateral is acceptable at Lendia for obtaining a VA Loan we broke it down into two sections detailing what is eligible and what is not eligible.

Eligible properties or collateral for obtaining a VA Loan with Lendia:

• Single Family Dwellings, including townhomes and row homes
• 2-4 Family Dwellings
• Condominiums and Site Condominiums – For Condos the project has to be approved
• Planned Unit Developments (PUD)
• Doublewide Manufactured Housing – acceptable only if it has characteristics of site built housing and is legally classified as real property and confirms to all local building codes in the jurisdiction in which they are permanently located.
• New Construction – need 1 year builder warranty and 10 year protection plan
• Properties on leased land (need lease approved)

NOTE: Properties can not be vested in the name of irrevocable trust

Ineligible properties or collateral:

• Mobile Homes
• Mixed Use properties
• Multi family properties with more than 4 units
• Manufactured condos
• Bed and Breakfast properties

Agricultural-type properties (such as farms, orchards or ranches) where income is being produced from the property

Although a mortgage spreads out the cost of buying a house over many years, you’ll still need to provide some money up front to pay for your down payment and closing costs.

Unless you’re getting a VA loan or a USDA loan – which don’t require a down payment – you’ll need to make sure you have funds saved for a down payment. The minimum on a conventional loan, like a 30-year fixed loan, is 3%. An FHA loan is available with a down payment of 3.5%.

Keep in mind, the larger the down payment, the more equity you’ll have, and the lower your monthly mortgage payments will be. By paying more up front, you’ll save on interest and be less likely to have to pay private mortgage insurance.

Along with your down payment, you’ll have to save money for closing costs (fees associated with processing and securing your loan). Although the amount you’ll need will vary depending on your loan amount and the tax requirements in your area, you can generally expect closing costs to be 3% – 6% of the purchase price.

To ensure you know exactly what you’ll owe, your lender will provide you with a Loan Estimate within three days of receiving your home loan application. This three-page form, which is required by law, will itemize the loan terms, projected payments and closing costs for your potential mortgage, so you are aware of precisely what you’ll need to have saved.

The VA Home Loan program has provisions that allow qualified homeowners to take advantage of refinancing their existing loan into a new VA loan. There are two main programs that can help VA borrower refinance to a lower rate; the VA Streamline Refinance also known as Interest Rate Reduction Refinance Loan (IRRRL) and the VA Cash-Out Refinance program.

Those two main programs can be broken down into three scenarios however

1. VA Streamline Refinance IRRRL

This special program allows you to refinance you existing VA loan into a new VA loan with a lower interest rate and lower monthly payment and it comes with some pretty great guidelines that simplify the process

• No Appraisal is required
• No Income is required – we do require you to have a job (Lendia will verify employment only)
• No paystubs, No W2s, No tax returns
• No Bank statements or assets required
• Minimum FICO of 600*
• Only 0.5% Funding Fee
• No Equity in your home is required*
• Property does not have to be owner occupied

*See VA Streamline Refinance Guidelines and Credit Requirements

2. VA Cash Out Refinance

VA Cash Out Refinance (VA to VA Loans)

This program is very popular among veterans who want to lower the mortgage rate and at the same time tap into their home’s equity. At Lendia we allow you to finance up to 100% of your home’s value with a VA cash out refinance.

Find out if you are eligible for a VA Cash Out Refinance Loan

You can do any of the following with your VA cash out refinance:

• Obtain cash out to pay off credit card debts or consolidate other debts into one loan
• Obtain cash out to do home improvements or home upgrades
• Consolidate your 1st and 2nd mortgage into one low rate VA loan
• Obtain cash to pay for tuition expenses
• Obtain cash for emergency reasons
• Obtain cash for whatever you want
• Loan structured so you have no out of pocket expenses*
• Funding Feebetween 2.15 to 3.3% (unless exempt)

*See VA Cash Out Refinance Guidelines and Credit Requirements

VA Cash Out Refinance (Other Loans to VA Loan)

It is common that you might have financing on your current home that is not a VA Loan. Perhaps when you purchased the home you were either unaware that you qualify for a VA loan or you became eligible after you purchased. Regardless the VA has a great program that you can utilize to convert your current home loan into a VA loan. It falls under the bucket of a VA cash out refinance but there is no requirement for you to tap into your equity and get extra cash at closing. You can simply use it to convert your existing non-VA loan (conventional, FHA, USDA, or private loan) into a low rate VA loan. The same VA Cash Out Refinance Guidelines and Credit Requirements apply regardless of the scenario.

Convert your current loan to a VA Loan now!