From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.


General Info

BiggerPockets Q&A, Site Questions, & Announcements

1522 topics, 14436 posts — Last Post 04/23/14, 11:39AM

BiggerPockets Exclusive PRO Area

118 topics, 844 posts — Last Post 04/23/14, 08:28AM

New Member Introductions

10968 topics, 86438 posts — Last Post 04/23/14, 12:15PM

Real Estate Success Stories

397 topics, 6188 posts — Last Post 04/23/14, 07:49AM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5986 topics, 47182 posts — Last Post 04/23/14, 12:16PM


649 topics, 5856 posts — Last Post 04/23/14, 10:42AM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/21/14, 03:59PM

Home Owner Association (HOA) Issues & Problems Forum

238 topics, 1611 posts — Last Post 04/23/14, 04:02AM

Do it Yourself

658 topics, 6316 posts — Last Post 04/23/14, 09:50AM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3704 topics, 29699 posts — Last Post 04/23/14, 11:00AM

Real Estate Guru, Book & Course Reviews and Discussions

1139 topics, 11596 posts — Last Post 04/23/14, 11:28AM

Ask About A Real Estate Company

743 topics, 7344 posts — Last Post 04/22/14, 11:25PM

Real Estate Investing

Real Estate Strategies


5630 topics, 43908 posts — Last Post 04/23/14, 12:21PM

Rehabbing and House Flipping

3349 topics, 31094 posts — Last Post 04/23/14, 11:14AM

Real Estate Development & New Home Construction

554 topics, 4694 posts — Last Post 04/22/14, 09:17PM

Innovative Strategies

705 topics, 6044 posts — Last Post 04/22/14, 04:06PM

Tax Liens, Notes, Paper, & Cash Flows Discussion

867 topics, 6692 posts — Last Post 04/22/14, 08:22PM

Rent to Own a.k.a. Lease Purchase, Lease Options

698 topics, 4923 posts — Last Post 04/23/14, 12:22PM

1031 Exchanges

143 topics, 1062 posts — Last Post 04/22/14, 03:21PM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1691 topics, 11313 posts — Last Post 04/22/14, 09:26PM

HUD, VA, and Tax Sales

416 topics, 3102 posts — Last Post 04/22/14, 01:39PM


1217 topics, 10595 posts — Last Post 04/23/14, 09:23AM

Short Sales

1538 topics, 13139 posts — Last Post 04/22/14, 01:38PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7243 topics, 71100 posts — Last Post 04/23/14, 12:33PM

Mobile Homes & Mobile Home Park Investing

639 topics, 5144 posts — Last Post 04/23/14, 07:57AM

Investor Basics

Starting Out

7725 topics, 60648 posts — Last Post 04/23/14, 11:42AM

Investor Psychology

431 topics, 6107 posts — Last Post 04/20/14, 06:04AM

General Real Estate Investing

4727 topics, 37314 posts — Last Post 04/23/14, 12:12PM

Real Estate Investor Marketing

1737 topics, 14144 posts — Last Post 04/23/14, 12:07PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1412 topics, 9004 posts — Last Post 04/23/14, 08:50AM

Multi-Family and Apartment Investing

1123 topics, 9364 posts — Last Post 04/23/14, 12:35PM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

644 topics, 4910 posts — Last Post 04/23/14, 10:40AM

Business Basics

Goals, Business Plans & Entities

832 topics, 7571 posts — Last Post 04/23/14, 09:48AM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2803 topics, 20131 posts — Last Post 04/23/14, 12:24PM

Property Insurance

310 topics, 2055 posts — Last Post 04/22/14, 07:38AM

Personal Finance Discussion

330 topics, 2754 posts — Last Post 04/22/14, 12:06PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2852 topics, 19841 posts — Last Post 04/23/14, 12:23PM

Creative Real Estate Financing

1217 topics, 8845 posts — Last Post 04/23/14, 09:39AM

Crowdfunding Real Estate

35 topics, 463 posts — Last Post 04/19/14, 06:24PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1217 topics, 8024 posts — Last Post 04/23/14, 08:23AM

Bankers, Lenders, and Mortgage Brokers

442 topics, 1929 posts — Last Post 04/22/14, 11:03AM


269 topics, 1690 posts — Last Post 04/22/14, 07:33AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

2012 topics, 11723 posts — Last Post 04/23/14, 12:05PM

Americans & International Real Estate

162 topics, 568 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

65 topics, 439 posts — Last Post 04/22/14, 09:27AM


Real Estate Marketplace

Real Estate Marketplace

15078 topics, 54101 posts — Last Post 04/23/14, 12:17PM

Real Estate Events and Happenings

167 topics, 2590 posts — Last Post 04/23/14, 09:12AM


Off Topic


2907 topics, 32441 posts — Last Post 04/23/14, 11:24AM

Housing News & Real Estate Market

920 topics, 8390 posts — Last Post 04/23/14, 11:47AM

BiggerPockets Real Estate Investing Summit

97 topics, 1752 posts — Last Post 04/23/14, 04:51AM

BiggerPockets Resources

Forums » HUD, VA, and Tax Sales » VA "Vendee" Financing - Good?

VA "Vendee" Financing - Good?

14 posts by 9 users


SFR Investor · Carter Lake, Iowa

I'm curious to see who here has purchased an investment VA property using "vendee" financing. Please describe the process, whether it was as straightforward as it seems, and what your associated costs were. Also, would you do it again?

There have recently been a bunch of new VA listings pop up in my market that offer the "5% down" option for investors. Since 5% down deals are otherwise unavailable for the most part, this appears to be an attractive method to acquire rentals, and I would liike to hear the pros/cons from those experienced in using this type of financing for deals...

Real Estate Investor · South Carolina

It has been a few years, but I did a couple of properties with Vendee financing. The last was back in 2000.

Vendee financing is just a VA guaranteed loan given to an investor You do not have to be a veteran to get VA vendee financing. Once your loan is approved, you bring your downpayment and closing costs to the settlement table just as with any other settlement.

Procedurely, the loan application is the same as any other "full doc" conventional or conforming loan application. The lender will want to see your financials, pull your credit report, and calculate your debt to income ratio. If you meet the creditworthiness and income standards, the loan is submitted to VA for approval.

When I did my last one, the whole process took about two weeks from loan application to loan committment. Fax, telephone, and email contact was all I ever had with the loan originator.

SFR Investor · Carter Lake, Iowa

Thanks Dave, good feedback.

Real Estate Investor · Milwaukee, Wisconsin

I am working one right now and it is a *****. The closing costs are huge. You need to buy it in your name then have it transfered to an LLC as they will not loan to an LLC.

I am dealing with Bank of America and they are not moving an inch on the price. It has been on the market for 90+ days with no price reduction and they will not go less than 6k lower than asking on a 160k property. I think they think that the loan makes the high price worth it?

I closed on a Vendee prop as an investor about a month ago. The process is a little more involved, meaning Bank of America asks for a little more extra information, however for the most part it was pretty smooth for me. From start to finish it took 2 months.

I see in one of the replies that the closing costs were huge for him. I asked them to cover closing costs in my contract and it was. As a truly novice investor, I like the program because it only allows me to put 5% down and there is currently no other institutions offering that (at least that I am aware of). I did get my prop for 6K under asking and it was not in bad shape at all. It was rented in 3 weeks.

A family member went through the same process and it was a little longer. It depends on the loan officer, I believe. I do agree with all of the comments of Dave T. I believe to save some money, it may be worth a little time and patience to seek out this program.

I would definitely do it again!!!

Real Estate Investor · South Carolina

When I did my VA vendee financing back in the day, the VA funding fee was 2.25 points which could not be financed with the loan. For a $150K property, the funding fee could be twice to three times the other settlement and closing costs.

There was a limit to the amount the loan could be increased to cover closing costs and prepaids. I think it was 2%.

There was no appraisal required to underwrite the loan which did help speed the process and contain the cost of settlement.

The loan was not credit score driven AND there was no number of financed properties limit for investors using the vendee financing as a non-owner occupied loan.

Bank of America has never been very friendly to me as an investor so I tend to go elsewhere when I need a loan.

I got my loans with a small corresponding broker/lender who sold the loans to Washington Mutual and Wells Fargo after settlement.

Remember, this was back in 1998 and 2000 when I bought these VA REOs. At the time, the loan processor had only two weeks to put together the underwriting package and submit it to VA for approval. Since i already knew what the underwriter would want, I had a documentation package ready to submit to the underwriter the next day. Perhaps this helped speed up the turnaround time to loan approval.

Maybe things are different today. I hope not.

Real Estate Investor · Lucas, Texas

Are you kidding? this program is awesome for investors!!

5% down, and a 4.5% rate of the _entire_ 95% of the balance!, no PMI either folks, cha ching! Up to 6% towards closing costs. No appraisal. No # mortgages limit. Seasoned investors can even use 75% of appraised rent for the property being bought towards calculating debt to income ratio. Still need convincing?

The VA fee is 2.25% which is 100% deductible in the first year as qualified mortgage insurance. It's basically prepaid PMI and because its VA its "qualified".

BoA charges a flat $2500 for closing costs and VA wont pay title policy so don't bother asking.

The quality of the properties seems to be much better than the average foreclosure in my area. I just closed on one with no deferred maintenance and got it rented in two weeks. I am closing on another this coming week that needs just a couple grand for cosmetics.

The closing process is a bit of a brow beating as far as documentation is concerned. I swear I thought they were going to ask for my first born too. But I guess that is par for the course now giving the new lending market risk aversion.

As another poster mentioned they are real miserly on coming down on the price. I've found that by being patient and waiting until the first price adjustment (usually around 3 weeks on market) then coming in 3-6% below usually seals the deal. Don't freak out if someone else beats you to it. About half the contracts these days are falling through so you'll probably get a second chance.

I have found that a property with these financing terms cashflows easily. I'll continue to snap them up as they come on the market :mrgreen:

Real Estate Investor · Castle Rock / Ft. Carson, Colorado

Is there a site that you all go to to find these certain properties? Is there some type of term that you see that tells you this can be bought with VA Vendee financing?


Real Estate Investor · Lucas, Texas

Originally posted by Claude Hodge:
Is there a site that you all go to to find these certain properties? Is there some type of term that you see that tells you this can be bought with VA Vendee financing?


I have access to the MLS and just search for "veteran" in the seller name to match Department of Veteran Affairs. Another hint is if it is a foreclosure and you need a pre-approval letter from BoA.

VA Vendee Quick Facts:
• Any purchaser can apply for Vendee Financing. You do not have to be a Veteran.
• Vendee Financing is available for non-owner and
owner occupied.
• Low Interest Rates
• The seller may contribute up to 6% of the contract sale price for closing costs.
• 2.25% VA Funding Fee
• No pre-payment penalties.
• An appraisal is not required for underwriting.
Non-owner occupied only:
• No maximum number of investment properties.

Vendee financing is a loan product offered to individuals to help finance the purchase of VA REO Properties. Vendee Financing will be offered to both veterans and non-veterans. Some of the guidelines are listed below:
• Seller may contribute up to 6% of the contract sales price to pay
for funding fee, closing costs, prepaid and other expenses.
• Vendee mortgages are assumable by qualification.
• Vendee Financing is not a credit score driven product.
• There are two available terms, a 15 and 30 year fixed rate.
Owner Occupied purchase:
• Can be financed with as little as 0% down. The loan amount may be increased up to 2% to finance closing costs, prepaids or other expenses. Funding fee may not be financed.

Non-owner Occupied purchase:
• Can be financed with as little as 5% down. Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment.
• Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting.
• No maximum number of investment properties.

Real Estate Investor · Castle Rock / Ft. Carson, Colorado

Robert, thank you very much!

When the buyer requestst the VA to contribute towards closing.... I'm assuming they jsut roll this up into the financing?
Also... When you mention how far below list price you offer .. wouldn't the NET to VA matter more since thats what they're looking at?

Real Estate Investor · Lucas, Texas

Originally posted by Peter Faul:
When the buyer requestst the VA to contribute towards closing.... I'm assuming they jsut roll this up into the financing?
Also... When you mention how far below list price you offer .. wouldn't the NET to VA matter more since thats what they're looking at?

Sure. Just like with any offer you can play around with the numbers all you want but what matters to the seller in the end is the net money received.

So when I said 3-6% below asking price I ment net.

Residential Landlord · Hampton Bays, New York

Thanks for the information, i logged onto their site and they have a huge inventory.
do you know if they will sell to an IRA, i read earlier that they would not sell to an LLC. I assume the financing is not available as Non recourse to the IRA.

· wpb, fl

I have been using for what appear to be VA Vendee financed available properties.
My agent said that of the 12 I am interested in only 2 are currently VA Vendee aproved. Excuse me, what?
I do not understand.
He said the properties need proper title work and that the bank is doing this However, 20%+traditional financing down or cash would get these now and that VA Vendee would not be accepted. The bank was converting the title. I do not understand.

How can properties which appear on the site in which VA Vendee financing can be used then say that only specific properties are eligible?

I called on 3 other properties which are still showing as current on the site but not on the MLS and I was told by three independent agents that "there is a title problem now and these properties have been off the market anywhere from 2-6 months."
What gives?

Does a dedicated VA property site exist where I can be assured that properties I am interested in are 100% Vendee eligible? I have wasted countless hrs. on research to be told some properties are not eligible.

Who can clear this up?

Sign up