As our community and Nation honors Veterans Day, it seems a perfect time to highlight Veterans Administration (VA) loans and how they may, or may not, be a good option for those who have earned this benefit by their service to our country.

The VA loan program was created as part of the original GI Bill, in 1944 and its purpose was to boost the postwar economy and broaden access to homeownership for returning veterans.  Decades later, VA loans are still fulfilling that original mission.  The VA basically insures a portion on behalf of eligible veterans and service members. That fiscal guaranty helps gives lenders the flexibility to extend financing with some significant benefits, chiefly the ability to purchase with $0 down.

Because it is a benefit program, these loans tend to be more forgiving when it comes to credit score benchmarks or previous foreclosure or bankruptcy.  The no-down payment benefit allows qualified borrowers to purchase up to $417,000 in most parts of the country before having to factor in a down payment.  Additionally, VA financing doesn't carry any recurring mortgage insurance.  

 VA borrowers have also emerged as a safe bet. These zero-down loans have had the lowest foreclosure rate of any mortgage on the market for most of the last six years.

Like most good things in life, VA loans also have their limitations.  The purchase of  a vacation home or purely investment property is not offered under VA loans and it may be more challenging to purchas a fixer-uppers due to the VA’s  property requirements.

While there are misconceptions by sellers and some Realtors about the program, not everyone is open to it; however, for veterans and service members, just knowing VA loans are an option is important. Being able to compare rates, costs and terms across different loan types can help ensure those who qualify get the most from their dollar.

Those who may qualify for a VA loan but who have great credit and cash to put down 20 percent may want to first look into a conventional loans.  But that option may not be possible for many veterans and military families, which is why the VA loan program is just as important today as when it was first created, if not more so. 

To all veterans who have served our country, a big salute and heartfelt thanks!

More information about VA loans can be found at: http://www.benefits.va.gov/homeloans/.  Also, feel free to contact Sandy or Shirley for referrals of lenders in our area who can help with VA loans: sandy@soldsisterssavannah.com; shirley@soldsisters.com.