Lauren Bunting

Lauren Bunting

(Jan. 22, 2021) Most people are familiar with the VA Loan, which is a loan program through the Department of Veterans Affairs.

These loans are available to veterans and active-duty military members and they offer no down payment requirements, no mortgage insurance, lower than average interest rates, limits on closing costs and more lenient credit requirements than traditional financing.

To qualify for a VA Loan, you need to have served 90 consecutive days during wartime, 181 consecutive days on active duty during peacetime, six or more years in the National Guard or Reserves. Also, some spouses of military members who died in the line of duty are eligible to apply for a VA Loan.

VA Home Loans are provided by private lenders, such as banks and mortgage companies. VA guarantees a portion of the loan, enabling the lender to provide the home buyer with more favorable terms.

In addition to the service eligibility requirements above, home buyers must also have satisfactory credit, sufficient income to meet the expected monthly obligations, and a valid Certificate of Eligibility (COE) on the property. The COE verifies to the lender that you are eligible for a VA backed loan.

Generally, all veterans using the VA Home Loan Guaranty benefit must pay a funding fee.

The funding fee is a percentage of the loan amount, which varies based on the type of loan and your military category, if you are a first-time or subsequent loan user, and whether you make a down payment.

You have the option to finance the VA funding fee or pay it in cash, but the funding fee must be paid at closing time.

Another benefit for disabled veterans with a permanent and total service connected disability rated 100 percent disabled by the VA may receive a complete exemption from real property taxes. Each state will have a form that disabled veterans must submit to qualify for this property tax exemption.

– Lauren Bunting is an Associate Broker with Atlantic Shores Sotheby’s International Realty in Ocean City.

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