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Community First National Bank - McAllen, TX
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Your Complete Guide to the VA Home Loan

VA Loans A VA loan is a mortgage loan that's backed by the Department of Veterans Affairs (VA) for those who have served or are presently serving in the U.S. military. While the VA does not lend money for VA loans, it backs loans made by private lenders (banks, savings and loans, or mortgage companies) to veterans, active military personnel, and military spouses who qualify.

Who Is Eligible for VA Loans?

VA loans are designed for military personnel, veterans, and military families. The list of those who are eligible for this home-buying military benefit include:
  • Veterans
  • Active-duty personnel
  • Reserve members
  • National Guard members
  • Some surviving spouses
You must also have suitable credit, sufficient income, and a valid Certificate of Eligibility (COE). And you must use the home for your own personal occupancy. Still unsure if you're eligible? Check the Department of Veterans Affairs website for a detailed list of eligibility requirements for military service members, veterans, and military spouses.

What Are the Benefits?

The VA loan program is offers some of the most attractive and flexible loans available, and they are exclusively for military personnel, veterans and their families. Perhaps the two biggest benefits that make these loans more affordable than a typical loan are that the borrower typically does not need to make a down payment, and there is no private mortgage insurance (PMI) requirement.

Here's a look at the complete list of benefits, as taken directly from the Veterans Affairs site:
  • No down payment required (unless required by the lender or the purchase price is more than the VA loan limits)
  • Negotiable and competitive interest rate.
  • Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5 percent and exemption for veterans receiving VA compensation).
  • VA rules limit the amount you can be charged for closing costs.
  • Closing costs are comparable with other financing types (and may be lower).
  • Closing costs may be paid by the seller.
  • No private mortgage insurance premiums are required.
  • An assumable mortgage.
  • Right to prepay your mortgage without penalty.
  • For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
  • VA assistance to veteran borrowers in default due to temporary financial difficulty.
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