Is 100% financing still available and, if so, is it possible to get favorable loan terms with no money down? For veterans of the U.S. military, the National Guard or U.S. Reserve the answer is a definitive “yes” and the rates and terms do not get any better! Qualified veterans seeking financing in high cost Bay Area counties like Alameda, San Francisco, San Mateo, and Marin may be eligible for the lowest rates available on 30-year fixed mortgages up to $1,094,625. 100% financing is available for other Bay Area counties to lower maximum limits.
VA loans are mortgages guaranteed by the U.S. Department of Veterans Affairs and offered to the public through program-approved lenders. It is important to keep this in mind when shopping for a VA loan as some lenders limit the scope of their offerings according to their investor channels. For instance, some VA lenders may limit the loans they underwrite to just $417,000, regardless of VA allowances for a given county.
All VA loans include a funding fee that ranges between 1.25% and 3.3% of the loan amount, depending on down payment size, status as active duty military, Reserve, or National Guard, and whether the borrower is seeking financing through the VA for the first time or is a past beneficiary of the program. The funding fee can be rolled into the loan and first time participants with no money down generally see a funding fee of 2.15%. This fee serves to underwrite the VA guarantee and, along with providing 100% financing, it removes the need for mortgage insurance so that borrowers aren’t saddled with an additional monthly payment. Because payments are lower, it is easier to qualify for a VA loan than other government loans such as FHA. Other benefits of VA loans include:
- No asset or reserve requirements.
- More lenient with employment and credit histories, allowing for discharged chapter 13 and chapter 7 bankruptcies after one and two years, respectively, and foreclosure after just three years.
- Non-taxable income is grossed up 25%.
- Up to 4% seller concessions plus buyer’s normal closing costs, including pre-payment of property taxes and insurance, paying down of credit card debts.
- Loans are assumable for qualified borrowers.
To qualify for a VA loan, one must first secure a Certificate of Eligibility from the Department of Veteran’s Affairs and provide proof of military service. VA loans are offered to veterans and surviving spouses (providing they haven’t remarried) exclusively for owner-occupied properties. One to four-unit properties are allowable and an acceptable VA appraisal and termite report with clearance are required.
Nicholas Ballard is both a mortgage broker and banker specialized in the residential Marin market. For assistance, please call or e-mail:
Nicholas Ballard: 415-526-1941; firstname.lastname@example.org
Real Estate Financing
CA Dept. of Real Estate #01356374
California Mortgage Advisors, Inc.
CA Dept. of Real Estate #01170868
Redwood Highway, San Rafael 94903