What is the VA Web site address and what can be found there?
Lenders can reach the VA Lender and Servicer Home Page at:
http://www.homeloans.va.gov/ls.htm
At this site you can download the
VA Lender's Handbook, find out about recent changes, plans for upcoming satellite training and access other useful information.
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Which Regional Loan Center (RLC) would I report to?
Telephone numbers and addresses of VBA Regional Loan Centers provides a listing of each RLC, associated territorial jurisdiction and contact information.
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What is the maximum loan amount VA will guarantee?
VA does not have a maximum loan amount. It is understood that lenders must generally have at least 25% of the loan guaranteed by VA to sell the loan on the secondary market. Based on this factor the following limits may apply:
| Refinance Loan Types |
Limit |
| Purchases or construction * |
$417,000 including VA's Funding Fee |
| Regular or Cash Out * |
$144,000 including VA's Funding Fee |
| Interest Rate Reduction |
VA will guaranty 25% of the final loan amount as long as it is in compliance with VA regulations |
* Please Note: The entitlement amount will increase as needed to keep up with loan amounts specified by Freddie Mac for single family residences. The guaranty will not exceed 25%. This does not apply for regular (or cash out refinances.)
* It is suggested that any deviations on loan amounts for purchases or construction and regular or cash-out refinances listed above be discussed with your secondary mortgage market representative prior to closing to ensure that you have the proper coverage needed to satisfy your investor's requirements.
Specifics on loan amounts and guaranty percentages can be found in Chapters 3, 6 and 7 of the
VA Lender's Handbook.
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Can a Veteran purchase a home with his fiancée using a VA loan?
The Veteran can purchase a home with any individual s/he chooses but VA will only guarantee the portion of the loan attributed to the Veteran and a spouse.
For example, if the Veteran intends to purchase a home with his fiancée prior to marriage and will share the same interest in the property, VA would guarantee half of the loan.
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What is the maximum guaranty on a joint loan for two Veterans?
The loan amount and guaranty percentage would be the same as for one Veteran. The use of two certificates does not mean you can double the guaranty or loan amount.
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Can a Veteran refinance over the 90% LTV on a cash out refinance?
The loan amount may not exceed 90% of the appraised value (referred to as the base loan amount) plus the VA funding fee. For example, the maximum loan amount for a home with an appraised value of $115,000 would be:
| $103,500 |
Base loan amount at 90% of the appraised value |
| + $ 2,225.25 |
VA Funding Fee (e.g. 2.15% for first time use Veteran, $2,225.25) |
| $105,725 |
Maximum loan amount |
It is understood that the loan amount may not exceed $144,000 to sell the loan on the secondary mortgage market. The exception to this is an addition for an Energy Efficient Improvement Loan (EEI). For EEI mortgages, the loan amount may be increased by the cost of the energy conservation improvements up to $6,000.
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How do you process a loan for a Veteran who has been rated incompetent?
- Obtain proof that the person signing the documents for the Veteran is authorized.
- Obtain VA Form 26-8937, Verification of VA Benefits.
- Submit a complete package (including a NOV) to VA for review and acceptance prior to the closing.
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Does VA require a 2.4% funding fee if the borrower is currently in the Reserves or National Guard but the Veteran has a green certificate?
If the Veteran possesses a valid green certificate it was obtained because s/he served full time active duty and is subject to the lower funding fee.
The fact that a person is in the Reserves or National Guard presently does not mean they automatically have to pay the higher funding fee. They may have qualified for the benefit as a Veteran with full time active duty service previously. Reserve/National Guard certificates are clearly annotated as such and list the fact that the Veteran is subject to a higher funding fee on the certificate. Any unusual scenarios may be clarified with your Regional Loan Center or questionable certificates may be addressed with the Atlanta Eligibility Center.
Information concerning VA Funding Fee may be found in Chapter 8 of the
VA Lender's Handbook.
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What documentation is acceptable to establish exemption from the VA Funding Fee?
- VA Form 26-8937, Verification of VA Benefits, completed and signed by VA.
- A current award letter dated within the past 12 months.
- Letter from the Veteran Service Center Manager confirming the extension of compensable service connected disability income.
- Proof that the Veteran elected to receive service retirement pay in lieu of VA compensation, such as a copy of the original VA notification of disability rating and proof of receipt of retirement income.
- A Certificate Of Eligibility (COE) which indicates that the borrower is eligible for VA benefit as an unmarried surviving spouse as stated on the COE.
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If a Veteran purchased a home with a VA home loan, paid off the loan and had entitlement restored, is s/he considered a multiple user?
Yes, s/he is considered a multiple user and subject to a higher funding fee unless exempt. Additionally, if the benefit was used before and the borrower is using remaining entitlement to purchase another home, s/he would be subject to a higher funding fee.
Information on funding fees can be found in Chapter 8 of the
VA Lender's Handbook.
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How many properties can a Veteran own through VA?
A Veteran can reuse the VA benefit multiple times as long as s/he has sufficient benefit to cover the new loan. In addition, the new home purchased must be the primary residence.
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Is an off base housing authorization required for Veterans currently serving in the Armed Forces to process a loan package?
No, the DD 1747 is no longer required by VA.
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Will VA accept a partial package for credit approval prior to the appraisal being ordered?
No. VA requires a complete loan package to underwrite a loan for commitment. A complete list of required package content is contained in Chapter 5 of the
VA Lender's Handbook.
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Where can I find information about lender approval, automatic authority or agents?
Chapter 1 of the
VA Lender's Handbook contains all of the requirements lenders must follow to be approved and participate in our program. The
VA Lender's Handbook can be viewed or downloaded from our site at
http://www.benefits.va.gov/warms/pam26_7.asp.
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Can you give a mortgage for an Interest Rate Reduction Refinance Loan (IRRRL) when the Veteran no longer occupies the property?
Yes, prior occupancy of the property is sufficient. The IRRRL is the only VA loan where the Veteran or his spouse does not have to occupy the property as a primary residence when the new loan closes. Specifics on occupancy requirements can be found in Chapter 3 of the
VA Lender's Handbook.
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Is there any exception to the 10-year rule for Interest Rate Reduction Refinance Loans (IRRRLs)?
In general, the new term for an IRRRL may not exceed the term listed on the note of the original loan being paid in full by more than 10 years. The Graduated Equity Mortgage (GEM) loan is the only exception. If a GEM loan was amortized over a longer period than the term indicated on the original note, the lender may base the term of the IRRRL over the GEM amortization period. A copy of the note showing the payment schedule would have to be obtained to document this.
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