Housing

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Purchase & Cash-Out Refinance Home Loans

With a Purchase Loan, VA can help you purchase a home at a competitive interest rate, and if you have found it difficult to find other financing. VA's Cash-Out Refinance Loan is for homeowners who want to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements. The Cash-Out Refinance Loan can also be used to refinance a non-VA loan into a VA loan. VA will guaranty loans up to 100% of the value of your home.


Eligibility: After establishing that you are eligible, you will need a Certificate of Eligibility (COE). The COE verifies to the lender that you are eligible for a VA-backed loan. This page describes the evidence you submit to verify your eligibility for a VA home loan and how to submit the evidence and obtain a COE.

Interest Rate Reduction Refinance Loan

The VA Interest Rate Reduction Refinance Loan (IRRRL) lowers your interest rate by refinancing your existing VA home loan. By obtaining a lower interest rate, your monthly mortgage payment should decrease. You can also refinance an adjustable rate mortgage (ARM) into a fixed rate mortgage.

No appraisal or credit underwriting package is required when applying for an IRRRL. An IRRRL may be done with "no money out of pocket" by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs. When refinancing from an existing VA ARM loan to a fixed rate loan, the interest rate may increase. No lender is required to give you an IRRRL, however, any VA lender of your choosing may process your application for an IRRRL. Veterans are strongly urged to contact several lenders because terms may vary. You may NOT receive any cash from the loan proceeds.


Eligibility: An IRRRL can only be made to refinance a property on which you have already used your VA loan eligibility. It must be a VA to VA refinance, and it will reuse the entitlement you originally used.

A Certificate of Eligibility (COE) is not required. If you have your Certificate of Eligibility, take it to the lender to show the prior use of your entitlement. No loan other than the existing VA loan may be paid from the proceeds of an IRRRL. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage. You may have used your entitlement by obtaining a VA loan when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the loan. The occupancy requirement for an IRRRL is different from other VA loans. For an IRRRL you need only certify that you previously occupied the home.

Native American Direct Loan

The Native American Direct Loan (NADL) Program helps eligible Native American Veterans finance the purchase, construction, or improvement of homes on Federal Trust Land, or to reduce the interest rate on such a VA loan.

The interest rate is 4.0%.

Eligible Native American Veterans can use these direct loans to simultaneously purchase and improve a home or to refinance another VA direct loan made under NADL to lower the interest rate. These loans are only available if a memorandum of understanding exists between the tribal organization and VA. Veterans who are not Native American, but who are married to Native American non-Veterans, may be eligible for a direct loan under this program. To be eligible, the qualified non-Native American Veteran and the Native American spouse must reside on Federal Trust Land.


Eligibility: VA direct home loans are available to eligible Native American Veterans who wish to purchase or construct a home on trust lands. To obtain a NADL, the law requires that: The applicant must be an eligible Native American Veteran who has available entitlement. The tribal organization or other appropriate Native American group must be participating in the VA direct loan program. The tribal organization must have signed a Memorandum of Understanding with the Secretary of Veterans Affairs, which spells out the conditions under which the program will operate on its trust lands. The loan must be to purchase, construct, or improve a home on Native American trust land. Individually allotted land is considered trust land for this purpose. The Veteran must occupy the property as his or her home; a loan for rental or investment purposes is not permitted. The Veteran must be a satisfactory credit risk. The income of the Veteran and spouse, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the other costs of owning a home, take care of other obligations and expenses, and have enough left over for family support. All prospective applicants are encouraged to first contact either their local housing authority or VA to discuss their financial situation and obtain a general idea of whether or not they might qualify for a home loan. In addition to the requirements above, the Servicemember or Veteran must meet certain military service requirements.

Housing Grants for Disabled Veterans

VA provides grants to Servicemembers and Veterans with certain permanent and total service-connected disabilities to help purchase or construct an adapted home, or modify an existing home to accommodate a disability. Two grant programs exist: the Specially Adapted Housing (SAH) grant and the Special Housing Adaptation (SHA) grant.


Eligibility for Specially Adapted Housing (SAH) Grant

Loss of or loss of use of both legs, OR Loss of or loss of use of both arms, OR Blindness in both eyes having only light perception, plus loss of or loss of use of one leg, OR The loss of or loss of use of one lower leg together with residuals of organic disease or injury, OR The loss of or loss of use of one leg together with the loss of or loss of use of one arm, OR Certain severe burns, OR The loss, or loss of use of one or more lower extremities due to service on or after September 11, 2001, which so affects the functions of balance or propulsion as to preclude ambulating without the aid of braces, crutches, canes, or a wheelchair

Eligibility for Special Housing Adaptation (SHA) Grant

Blindness in both eyes with 20/200 visual acuity or less, OR Loss of or loss of use of both hands, OR Certain severe burn injuries, OR Certain severe respiratory injuries

Sources

1. http://benefits.va.gov/HOMELOANS/purchasecashout.asp
2. http://www.benefits.va.gov/HOMELOANS/index.asp
3. http://benefits.va.gov/HOMELOANS/purchaseco_certificate.asp
4. http://www.benefits.va.gov/HOMELOANS/irrrl.asp
5. http://benefits.va.gov/HOMELOANS/nadl.asp
6. http://www.benefits.va.gov/HOMELOANS/adaptedhousing.asp