On June 25, 2019, U.S. President Donald Trump signed the Blue Water Navy Act into law. This act was to increase and expand VA benefits for Veterans and Active-Duty Service Members.
Funding Fee Changes
The new law came into effect on January 1, 2020, and has brought temporary changes to the VA funding fee with an increase to the amount that is paid by qualifying Service Members from 0.15% to 0.30%. These changes will last for at least the next two years. They have also brought a decrease to the amount that National Guard and military reserves members must pay to their funding fee.
Also, disabled Veterans who were already not subject to the funding fee have not been affected by the new law’s changes to the funding fee. Active-Duty Service Members who have earned a purple heart can have their funding fee waived if they close on their home while they are still in active duty.
Removal of Loan Limits
Perhaps the biggest and most significant change to the VA home loan program is the removal of loan limits, which were previously determined by the property’s county. This removal of loan limits has enabled borrowers to look for homes in more affluent areas. Before the loan limit removal, they would not have been able to look at those areas due to their costs exceeding the loan limits for that specific county.
However, the government does not administer the VA loan; qualified lenders provide them. These lenders are still required to make sure that the borrower can afford to make their monthly loan payments. Also, even though the VA has removed all loan limits for first-time borrowers, specific lenders can still set up their loan limits. One such lender is https://www.vahomeloancenters.org/ VA Home Loan Centers, which has a VA loan limit of $5,000,000.
Additionally, Native American Veterans on Federal Trust Land who want to build or purchase a property in have had their loan limits entirely removed by this new law. Furthermore, borrowers who already have one existing VA home loan are still subject to their county loan limit, which is currently at $510,400 in most of the country.
VA Benefits
Currently, VA loans are amongst the best home loans available. Meant for Veterans, Active-Duty Service Members, and surviving spouses of Service Members who are either deceased or are missing in action. These loans offer several benefits which include:
- $0 Down Payments.
- Low Monthly Payments.
- 15- to 30-year Fixed Mortgages.
- No Prepayment Penalties.
- Low-Interest Rates.
- No Mortgage Premiums.
Also, as a government-guaranteed home loan, lenders are protected in case the borrower ends up not being able to make their monthly payments. As a result, lenders are more lenient with their eligibility requirements.
VA Eligibility
If you’re a Veteran or an Active-Duty Service Member, you will most likely qualify for a VA home loan. You must meet one of the following requirements:
- Served for at least 90 consecutive days of active duty service during wartime.
- If your service was during peacetime, you must have served for at least 181 days in active duty.
- If you are in the national guard or the reserves, you must have at least six years of service.
- If you are the spouse of a Veteran who is deceased, your spouse must have passed away while in active duty or as a disability-related to their service.
VA Credit Score Requirements
VA home loans do not have any credit score requirements. However, lenders, on average, require a credit score of 640 or above. Some VA lenders will approve borrowers who have lower credit scores. Still, they will be required to provide further explanation as to why their credit score is the way it is.
VA Property Requirements
Properties you apply for must meet the requirements that are set out by the VA. Qualifying homes include single-family residences, multi-family dwellings, and condos. Although condos must be VA approved, however, if they are not accepted, you can apply for approval at https://www.vahomeloancenters.org/instructions-to-submit-condo-pud-or-cic-for-expedited-military-loan-approval VA Home Loan Centers.
Conclusion
In a concerted effort to improve the rate of homeownership for our brave Service Members, VA home loans have had its loan limits removed. By signing this act, President Trump has emphasized the country’s dedication to members of our military and their families.
Phil Georgiades is the CLS for VA Home Loan Centers, a government-sponsored brokerage specializing in VA home loans. He has been practicing real estate professional for 22 years. To learn more about whether a VA loan is right for you or to apply for a VA loan, here.
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