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VA Loans in Baker County, Florida: Take Advantage of the Zero Down Payment

Veterans and military service members have a difficult time achieving the goal of buying a home. As a military service member, you might not have sufficient time to engage in income-generating activities. What options can you exploit to own a home? VA loans offer a suitable option that can help you achieve this goal.

Military service members rely on VA loans to buy, build, or refinance their dream home. Private lenders provide the loans while the US Department of Veterans Affairs (VA) backs the loan.

The VA loan allows active service members, veterans, and surviving spouses to buy their preferred homes. The VA introduced VA loans in 1944, and the loan's popularity has grown steadily over the years. Ease of qualification and the zero down payment benefits have fueled much of this popularity.

The VA department partners with private lenders to ensure service members, veterans, and surviving spouses access this benefit. With this loan, beneficiaries don't make any down payment. Besides, you won't pay private mortgage insurance as the government pays a certain percentage of the VA home loan.

VA loans have distinct differences from conventional home loans. The VA department usually repays part of the loan for borrowers who can't make payments. Also, borrowers who face foreclosure will have part of their loan repaid.

Lenders face less risk from these loans, so they can quickly offer approvals. However, lenders will only approve loans if you're buying a home that you will live in. Lenders will not approve a VA loan if you intend to use the funds for a vacation home or investment property.

Different Types of VA Loans

Here's an overview of the different types of VA loans and how they can help you buy your first home or refinance an existing one in Baker County, Florida.

Interest Rate Reduction Refinance Loan (IRRRL)

This VA loan option lets you refinance your existing loan for a lower rate. Also known as the VA Streamlines, these low-cost refinance loans don't always require income verification or underwriting. With this loan, you can pay lower interest rates without out-of-pocket fees.

This loan option is available for veterans with an existing VA loan. Besides, the IRRRL ensures that beneficiaries have full financial benefits.

Cash-out Loan

Get cash from the home's equity with this loan option. This loan option lets you refinance up to 90% of your home's value. Veterans are eligible for this loan regardless of whether or not they have an existing VA loan.

Different lenders have specific loan-to-value requirements and lending guidelines.

VA Purchase Loans

Veterans can leverage this loan to buy homes at competitive interest rates thanks to the backing from the government. The fixed-rate VA loans provide a fixed rate throughout the loan's life. The interest rate remains fixed whether the market interest rates increase or decrease.

Besides, your monthly payments will remain the same. Also, this loan has limited closing costs while you won't need to pay Private Mortgage Insurance.

VA Refinance Loan

Do you already own a home in Baker County, Florida? Have you built up sufficient equity in the home? The VA Refinance or Streamline Refinance Loan is a suitable option for your needs. This cash-out refinance lets you get cash for various needs, including home improvements and paying off debts.

VA Energy Efficient Mortgage

The VA energy-efficient mortgage is a suitable option if you need to add energy-efficient improvements to your home. With this loan option, you can find an extra $6000 for improvements in your home. Typical energy-efficient home improvements include heat pumps, cooling systems, solar heating, and thermal windows.

Determining VA Loan Eligibility

Qualification for VA loans is open to anyone serving in the US military who meets stipulated service requirements. Active military, veterans, surviving spouses, and reserve and national guard members can all qualify for a VA loan.

VA Home Loan Requirements

You must meet specific VA requirements to get approval for VA loans in Baker County. Eligible members usually fall into top categories, including:

  • Spouses of service members who passed while on duty

  • Active duty service members

  • Honorably discharged veterans

  • Veterans who served more than six years in the Selected Reserve or National Guard

  • Veterans who have completed 90 consecutive days during wartime

  • Veterans who've served 181 active service days during peacetime

Qualifying criteria for surviving spouses can be confusing for different borrowers. Typically, service member's spouses can qualify if they meet any of these requirements:

  • Be a spouse of a disabled veteran

  • Be a spouse of a war prisoner

  • Be a surviving spouse of a military member who's missing in action

  • Be a surviving spouse of a veteran who died in service

  • Be a surviving spouse of a veteran who passed away from a service-related injury

Applying for a COE

Most lenders require you to provide a Certificate of Eligibility (COE) to indicate that you meet the qualification criteria. Besides, you might also need to have sufficient income streams and suitable credit to qualify for the loan.

The most straightforward way of getting a COE is through a lender. VA-approved lenders can access a lender-only VA website where they can get your COE in a short time. Alternatively, you could apply for the certificate online. In this case, you'll need to access the VA's eBenefits portal.

In certain circumstances, the VA can allow you to complete your COE application via mail. For this option, you'll need to fill out VA Form 26-1880. However, this process takes several weeks.

Work with an experienced VA lender to simplify the VA loan application process. Besides the Certificate of Eligibility, your lender might require you to provide your tax returns and bank statements. Also, prepare to share your pay stubs.

Before approving your loan, lenders usually need to ascertain that you have a minimum credit score of 620. Some lenders may approve your loan with a lower credit score if you meet specific conditions.

A reliable VA home loan lender might offer tips on improving your credit score and boosting your chances of getting approved.

Lender Requirements

Besides the VA eligibility requirements, lenders might require you to meet certain specifications before approving your loan. Top lender requirements include:

  • Good Debt-to-income Ratio - As a borrower, you must prove that you have sufficient income to complete the mortgage payments consistently. Your lenders will assess the percentage of your monthly income to pay your other loans.

  • Reserve Funds - Lenders will typically require you to have adequate reserve funds. Some VA loan lenders might need assurance that you have two to three months of mortgage payments in reserve.

  • Credit and Income - Different lenders have specific minimum credit score requirements. Most lenders require a mortgage credit score of at least 620. Also, you might need to have enough residual income once you complete your major monthly bills. The residual income requirement ensures you have enough income for your financial obligations.

VA Loan Application Process

Borrowers apply with a mortgage lender or banker as the VA doesn't issue loans. Working with a lender specializing in VA loans can help ease the application and approval process. A specialty lender can help streamline your borrowing experience, thanks to their expertise.

Here are the steps of the application process.

  • Get Pre-approved - You'll see your chances of getting the VA loan during this step.

  • Find a suitable home - Remember that your lender will not approve a VA loan for a vacation home.

  • Complete the purchase contract - Work closely with the seller to draft and sign the purchase contract.

  • Submit Additional Documents - Prepare all the documents required to finalize loan processing. You will need to fill out the necessary paperwork from the VA.

  • Remit Closing Cost Payments - Once you pay the required closing costs, proceed to sign the closing documents.

A typical VA loan application process takes between 30 and 45 days. However, different lenders offer different experiences. Always remember that you are not under any obligation to proceed with the home buying process after the loan application. Also, you don't have to stick with one lender.

Military father with his family on sofa at new home

VA Loans Closing Costs

Most conventional loans have high closing costs that hinder borrowers from finalizing their loans. Unless a borrower has significant savings, they might experience difficulty owning their dream home.

Closing costs include credit checks, discount points, and VA appraisal fees. Sometimes, you might pay title insurance and local and state taxes.

For VA loans, sellers may have to part of the purchase to reduce the overall closing costs. Alternatively, you could opt to roll the costs into your loan. While this option might feel expensive, you can become a homeowner sooner than expected.

VA Loan Limits

Typically, any borrower who has not used the VA loan benefit doesn't have a VA loan limit. Also, eligible service members who have not restored their benefit to full entitlement can borrow limitless amounts.

If you have remaining entitlement, expect to have a county-based loan limit on your VA loan. These situations arise when you have other active VA loans. Borrowers who lost their previous loans to foreclosure will also have specific loan limits.

Also, a typical loan limit will depend on how much you can pay without straining.

VA Loan Entitlements

Usually, the VA guarantees up to 25% of your loan amount without requiring a down payment. This amount is what constitutes your VA loan entitlement. If you've not leveraged the VA loan previously, you'll have full entitlement to the loan.

Your entitlement will be less if you have an existing VA home loan. You are also not eligible for full entitlement if you've gone into foreclosure on a previous loan. Borrowers with partial entitlements will have a limited loan amount.

VA entitlements also refer to the amount that the VA pays your lender if you default on your loan. This guarantee reduces the risk exposure to lenders who approve loans with no down payment.

Working with an experienced VA-approved lender will reveal how you can borrow.

Can you use the VA Loan More than Once?

Unknown to many veterans, VA loans are not one-time options. As long as you earn the benefit, you can use it for the rest of your life. The second-tier entitlement lets you leverage this benefit. Besides, there are no restrictions on having simultaneous VA loans simultaneously.

Essentially, this benefit doesn't expire after a certain period. Also, you don't need to finish paying your existing VA loan before signing up for another one.

VA Funding Fee

The VA advocates for a funding fee that lowers the loan's cost. Also, the VA relies on this fee to ensure that future service members and surviving spouses can make the most of the loan.

The VA funding fee almost takes the place of the conventional PMI. Veterans and service members contribute to the loan's guarantees through this fee. However, this fee is less expensive than mortgage insurance as you only pay it once.

You'll be making payments to a program that will benefit you and future service members. Depending on your preference, you could pay the fee during closing or refinance it with the rest of your mortgage.

The VA usually waives the fee for veterans with service-connected disabilities. However, certain service members qualify for an exemption from the VA funding fee. Also, active duty service members with a Purple Heart might get exemptions.

Benefits of a VA Loan

Overall, VA loans make it easier for qualified service members and veterans to own a home. The VA loans offer unmatched financial benefits that are not available with other mortgage types.

The top benefits of the VA loans include:

Zero down payment

VA loans are 0% home loans that ease homeownership for qualified veterans. The loans consider that Veterans don't have the time to earn extra income. Veterans and service members don't have to spend years saving money for a typical down payment.

No private mortgage insurance

Typically, lenders don't require borrowers to pay the monthly Private Mortgage Insurance. The guarantee from the VA and the funding fee contribute to the significant savings veterans accrue with this loan.

For conventional or FHA loans, lenders require you to pay at least a 20% down payment to get the exemption. With no monthly mortgage insurance, qualified borrowers save on mortgage insurance costs. Besides, this benefit stretches your buying power to incredible levels.

Low-Interest Rates

Lenders have better safety and flexibility from the VA guarantee. Consequently, borrowers get to enjoy more competitive interest rates. With this benefit, you can get a more suitable home for the same monthly payment compared to a conventional loan.

Also, the VA has no specific credit score limits for this loan. Therefore, lenders qualify members with a credit score of 620 or more.

Minimal Closing Costs

Typical mortgages have multiple fees and closing costs. However, the VA limits what you will pay with the VA loans. With these safeguards, qualified homebuyers can purchase homes at affordable rates. Ensure you ask the seller to foot part of the bills during the negotiation process.

No Prepayment Fees/ Penalties

You might have prepayment penalties for some loans if you pay off a home loan before it matures. Lenders enforce such penalties to cover the interest payments they might miss out on. You can pay off the loan with VA loans without a prepayment penalty. Also, you'll be able to consider financing options with no penalty.

Simplified Qualification

Lenders have less stringent qualification standards for VA loan applications. Eligible veterans have an easier time getting approval for these life-saving loans.

No Credit Score Requirements

For VA loans, the VA doesn't have minimum credit score requirements for borrowers. Lenders only set credit score requirements to minimize the risk involved. Besides, Baker County mortgage guidelines offer extended flexibility for veterans.

You can still get approval for the VA loan if your credit score is less than 620.

Exciting Things to Do in Baker County, Florida

  • Explore the Oregon Trail - Make your way to Highway 86 and explore the open high desert with rolling hills. Check out the local pioneer history and find a souvenir at the gift shop.

  • Ride the Sumpter Valley Railroad - Enjoy scenic steam train rides as you explore the expansive valley. The narrow-gauge railroad will take you through Sumpter, the former mining town, and offers multiple special events.

  • Check out the Exhibits at Baker Heritage Museum - Take a walk down history at the Baker Heritage Museum. Learn about local history and culture in the Natatorium building that features pioneer and homestead eras.

  • Visit the Carnegie Art Center - Are you an art lover? Find time for the re-purposed grand old Carnegie Library. This center will treat you to diverse visual and performing arts from local and regional artists.

  • Enjoy Craft Brew - Spare some time to explore Barley Brown's Brew Pub in downtown Baker. Here, you'll find a range of hand-crafted beers and pub grub.

Find a Suitable VA loan

Assess different loan terms and mortgage rates to find the best possible deal. Also, familiarize yourself with the loan process before you start applying.

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

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