(May 30, 2023)
But not all mortgages are designed to favor borrowers with little savings. The VA loan, to be precise, targets veterans, service members, and surviving spouses who are finding it hard to raise a down payment for a home loan. It boasts a wide range of financial benefits for eligible borrowers who don't qualify for conventional loans.
But how do VA loans work, and what are the eligibility and lender's requirements? Learn more about how to get the zero-down VA loan in Calhoun County, Florida, below.
Are you a Hometown Hero? Find out your eligibility for the Hometown Heroes Loan Program in Calhoun County, Florida.
What is a VA Home Loan?
A VA home loan is a mortgage loan backed by the Department of Veterans Affairs to help veterans, service members, and surviving spouses in their homeownership journey. The loan requires little to no down payment and can entitle you to no mortgage insurance and competitive interest rates.
VA loans provide up to 100 percent financing on the current value of a property. You can take one to build or purchase a home, carry out home improvements, or repair or refinance an existing VA mortgage.
Besides backing the loan, the VA sets various qualifying standards that dictate the loan terms. Financing is done by private lenders such as mortgage companies and banks.
During the first stages of the application, you need to issue the lender a Certificate of Eligibility. Your service-related paperwork will be needed to obtain the certificate.
Different Types of VA Loans
You can take a VA home loan when buying, building, or carrying out improvements in your home. The loan can also come in handy when refinancing your existing VA loan. The four types of VA loans are as follows:
VA Purchase Loan
The VA Purchase Loan is the most popular since it helps service members and veterans purchase new or existing homes without a down payment. It's ideal for purchasing manufactured homes, condominiums, multi-unit properties, and single-family homes.
VA Cash-Out Refinance
Your chances of successfully refinancing your current VA loan largely depend on the VA refinance loan you take. With a Cash-out Refinance loan, you can make money from your home's equity. The loan is open to eligible borrowers with or without current VA loans.
If you are a qualified homeowner, the VA Cash-out Refinance can assure you close to 90 percent of the property's value. However, specific lending guidelines as well as loan-to-value requirements, depending on the lender, apply.
VA IRRRL
The VA IRRRL (VA Streamlines) is the other refinance option in the VA loan program besides the VA Cash-Out Refinance. AIt's simple and low cost but doesn't need credit underwriting, an appraisal, or income verification.
You can only apply for a VA IRRRL if you have a current VA loan. Once approved, you get a new rate that's lower than the old one. Lenders will also impose time on how long recouping the loan fees and costs take.
VA Energy Efficient Mortgage
Gone are the days borrowers had to withdraw thousands of dollars from their savings to carry out energy-efficient improvements. The VA loan program caters to these improvements, provided they are done on a VA-financed home.
The VA Energy-Efficient mortgage can afford you an additional $6,000 you can use to buy energy-efficient systems. These include solar heating/cooling systems, heat pumps, and thermal/storm windows.
Who is Eligible for VA Loans
The eligibility criteria for VA loans largely depend on how well you fill the Certificate of Eligibility. You also have to satisfy the income and credit requirements of the lender. As a service member, the minimum requirements include:
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Serving 90 consecutive days actively during wartime
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Serving 181 days actively during peacetime
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Six-year service in the US National Guard or the Reserves
- A spouse to a deceased service member, if they passed on due to a service-related disability or while on duty.
If you are a veteran, you must prove your discharge type. The lender may consider you for the loan program if your discharge is classified as follows:
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Discharged for an illness or disability connected to the active service
- Early-out discharge after serving at least 21 months in your 2-year enlistment
How to Verify Your VA Loan Eligibility Status
Your lender will demand a Certificate of Eligibility (COE) to confirm that you meet the VA minimum service requirements. The document gives the lender all relevant information needed to qualify you for the VA loan benefits.
If you prefer the easy step, you can have your lender pull the COE using your social security number and date of birth. The more complex step involves obtaining the document from the Veterans Affairs website. Either way, nearly all requests to the VA for COE are issued immediately.
You may have to fill out NGB Form 22 and Form 23 if you are a member of the Reserves/National Guard and the lender requires additional documentation to prove eligibility. Filling out DD Form 214 will also be a good idea if you are a regular service member.
Here's a breakdown of the required documents:
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DD Form 214 (Report of Separation): Veterans and current/former activated Reserves or National Guard
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Statement of Service: Active-duty service members
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Statement of Service and an allocated points statement: Current National Guard or Reserves (Never Activated)
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NGB Form 22 (a Report of Separation and Record of Service): Discharged National Guard (Never Activated)
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NGB Form 23 (Retirement Points Accounting and proof of the character of service): Discharged National Guard (Never Activated)
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DARP Form FM 249-2E or ARPC Form 606-E: Army Reserve (Discharged Reserves)
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NRPC 1070-124: Navy Reserve (Discharged Reserves)
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AF 526: Air Force Reserve (Discharged Reserves)
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NAVMC HQ509 or NAVMC 798: Marine Corps Reserve (Discharged Reserves)
- CG 4174 or 4175: Coast Guard Reserve (Discharged Reserves)
VA Loan Eligibility Verification for Surviving Spouses
As a surviving spouse, the lender will demand a COE to confirm your eligibility for VA loan benefits. If you are enrolled in the Dependency and Indemnity Compensation, you can verify eligibility by filling out VA Form 26-1817. You also need to obtain a copy of the separation documents through forms like DD Form 214.
If you haven't signed up for Dependency and Indemnity Compensation benefits, the lender will require you to fill out VA Form 21P-534EZ. You should submit it to your state's nearest VA Pension Management Center. A copy of your marriage certificate, the Veteran's separation paperwork, and DD Form 1300 or Veteran's death certificate will be needed.
Applying for a VA Home Loan
The VA loan process is more straightforward and less daunting than a conventional mortgage. You'll know whether you are eligible for VA loan benefits at the start of your loan application. Expect the entire process to last not more than 45 days, depending on your situation.
Reaching out to a VA-approved lender is the first step in the VA loan process. Choose a lender that understands your financial situation and has relaxed credit requirements.
Your lender will require you to present a Certificate of Eligibility depending on your military service. Forms filled during this step differ from the military service and discharge status.
Once the lender verifies your eligibility, they will ask for additional paperwork to determine if you can afford the loan. Expect them to ask you for your pay stubs, tax returns, expense breakdown, and debt statements, among other financial documents.
VA Loan Limits
VA loan limits only come into play when you have a reduced VA loan entitlement. Instead of dictating how much you can take as a loan, these limits determine how much a lender can give you without requiring a down payment. Your VA entitlement may be reduced if you default on a VA loan or have multiple pending VA loans.
As VA loan limits are on the rise in 2022, expect a limit of $647,200 on a home loan guaranteed by the Department of Veterans Affairs. And if you want to use the loan to finance a single-family home in a high-cost county, the limit can reach up to $970,800.
Can a VA Home Loan be Used More Than Once?
Since VA loans are a lifetime benefit, you can take them multiple times provided you satisfy the eligibility requirements. Lenders can also allow you to borrow multiple mortgages at the same time. However, the following conditions have to be true to use a VA loan more than once:
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You sold your home and paid off the previous VA loan (to restore your VA entitlement or use the remaining VA entitlement to take a new loan)
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You kept your current property but decided to rent it out
- You repaid your previous VA mortgage in full and kept the home financed with a VA loan to restore your VA entitlement (This can only be done once)
The VA Funding Fee Explained
To help fund its veteran-centric programs, the VA charges a VA funding fee on loans it backs. You can have the fee included in your VA home loan or decide to pay it upfront.
Rolling it in your monthly loan payments can lower the closing costs. If you take a VA Cash-Out Refinance Loan, you can use your home's equity to pay the funding fee.
According to the VA, the VA Funding Fee is a percentage of the mortgage amount. It is affected by disability status, first-time borrower status, and down payment status. Expect a 2.3 percent fee for a first-time VA loan and 3.6 percent for subsequent loan use.
Putting not less than 5 percent down on your VA mortgage can help reduce the VA Funding Fee rate. Having a disability rating above 10 percent and being a Purple Heart recipient can exempt you from paying this fee. Surviving spouses of deceased veterans (who passed on in the line of duty) are also exempt.
Benefits of Getting a VA Home Loan
It's not common to find a home loan program like the VA loan program in the mortgage market that offers favorable home financing terms to active military members, veterans, and surviving spouses.
This program's actual power comes from its unmatched financial benefits. Here's a breakdown of these benefits:
No Down Payment Required
Though a down payment helps lower borrowing costs, it is usually an obstacle to many borrowers with limited savings. Signing up for the VA home loan program will help you get a mortgage even when you can't raise a down payment.
Easier to Qualify
VA loans require relatively fewer requirements compared to conventional mortgages. Since the minimum approval requirements depend on the lender, shopping around can get you a loan with favorable terms.
Lower Interest Rates
Most VA-approved lenders charge lower rates on VA mortgages than conventional mortgages. The low rates can help grow your savings and put you in a better position to afford the monthly loan payments.
No Mortgage Insurance
Mortgage insurance is the distinguishing factor when comparing VA home loans with conventional and FHA loans. It is the fee to cushion lenders' risk of issuing home loans. You won't have to part with mortgage insurance premiums once you sign up for VA loan benefits.
Lower Closing Costs
Closing costs are cumbersome if you have to pay them in high amounts. But with a VA loan, these costs are lower, allowing you to focus more on saving and making the monthly loan payments.
Convenient Loan Refinancing Options
The VA home loan program offers two types of refinance loans (the IRRRL and Cash-Out Refinance). Each of these refinancing options offers unbeatable deals on a new loan. For instance, with an IRRRL, you can get a new loan with a lower rate, while the Cash-Out Refinance loan allows you to take up to 90 percent of your home's equity.
What to Do Outdoors in Calhoun County, Florida as a Veteran
Calhoun County boasts a laid-back tempo with several scenic landscapes and rivers as Florida's fifth-least populous county. There are also plenty of exciting recreational activities that you can enjoy in the county as a veteran.
Your options for fun outdoor activities in Calhoun County, Florida, may include the following:
Picnicking at the Sam Atkins Park
Covering over 180 acres of land, Sam Atkins Park is a host of passive recreational opportunities. In the park, you'll find a 160-acre tract of bottomland swamp, mixed forest, and pineland northwest of the ballfields.
There's a relaxing picnicking area next to a trailhead for picnicking adventures. The park also features a multi-use trail system for horseback riding, cycling, and hiking.
Fishing and Canoeing at the Chipola River Water Management Area
The Chipola River Water Management Area stretches 18 miles along the scenic Chipola River. It features a canoe trail that starts at the Florida Caverns State Park and flows through hardwood forests and river swamps.
While paddling through the river, you'll encounter endangered and rare plants and animals, beavers, turtles, and alligators. Other fun activities at the Chipola River Water Management Area include hiking, boating, RVing, camping, and seasonal hunting.
Walk-in Camping at Ocheesee Landing
Ocheesee Landing features easy-to-access and scenic campgrounds that are ideal for walk-in camping. You can pitch your tent on these campsites and enjoy magical camping experiences.
Hiking at Blountstown's Greenway Trail
As a 3.325-mile naturally-landscaped trail, the Blountstown's Greenway Trail stretches from Sam Atkins Park to the Apalachicola River. It features trailheads and beautiful, shady and scenic trail routes. You can take a bike ride, have an afternoon run, or stroll through Blountstown's Greenway Trail.
Birding at the Calhoun Loop and Tres Palacios Loop
Calhoun County, Florida, is an excellent place for bird watching and photography, with over 400 bird species. The marshes, coastal prairies, and water in spots such as the Calhoun Loop and Tres Palacios Loop attract birds.
Summing up
As an eligible veteran, active-duty military member, or surviving spouse, a VA home loan is your best shot at homeownership in Calhoun County, Florida. You can use the loan to finance a home purchase or refinance an existing home loan.
The loan also boasts relaxed credit requirements, no down payment, no mortgage insurance, competitive interest rates, and lower closing costs.
(May 30, 2023)
