As with the FHA and USDA home loan programs, the purpose of VA loans is to make homeownership more accessible and affordable for qualifying military service members, veterans, and surviving spouses. Up to one hundred percent of the purchase price can be financed, eliminating the need for a down payment. There are a variety of VA loan options including purchase loans, cash out refinance, the streamline refinance loan, and adapted housing grants. Unlike other federally insured home loan programs, VA loan borrowers do not have to pay mortgage insurance regardless of the loan-to-ratio value.
How Do VA Loans Work?
The Department of Veterans Affairs guarantees a portion of the VA mortgage loan issued by a private lender so they are protected from some of the risks of default. This makes it possible for lenders to work with homebuyers who have less than perfect credit and provide mortgages at low interest rates with no down payment. While there is no official limit on the amount you can borrow under a VA loan, the VA has caps on the amount it will provide insurance for. Compared to the other federal home loan programs, FHA and USDA, the VA loan program is notable for its lack of a mortgage insurance requirement.
Eligibility Requirements for VA Loans
Generally, VA loans are open to active service members, veterans, and surviving spouses. Your specific eligibility for a VA loan depends on the type of financing you apply for as well as your length of service, service commitment, duty status, and character of service. VA loan lenders will also examine your credit score, employment history, and other financial paperwork.
Partner with Your Local VA Loan Bank!
As one of Northern Virginia’s few remaining community banks, TFB is proud to serve military homebuyers in and around Prince William and Fauquier Counties. We offer friendly service, local decision-making, flexible terms, and competitive rates. Our VA loan lenders are also knowledgeable about and experienced with the local real estate market today. Call our mortgage lenders today, visit your nearest TFB branch, or start an online application. You can count on your local VA lender to be with you throughout the mortgage application process.