Maximize Your VA Benefits with 100% Financing in High Cost Area's

[Jerry Padilla]

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For VA home loan purposes, a veteran is a person who has served or is currently serving on active duty in the United States Military or Coast Guard and who was discharged or released from active duty under conditions other than dishonorable. Un-remarried surviving spouses of an eligible service member who died as a result of service or service-related injuries may also be eligible.

ELIGIBLE PROPERTY TYPES

1 – 4-unit single family detached homes

PUDs

Townhouses

Condominiums—per VA guidelines

INCOME

In order to be considered for approval of a VA home loan, income stability is a mandatory requirement

Veterans recently separated from the service must have a minimum 2 year work history in the same line of work that he/she did in the service. The veteran should be in his/her most recent job for at least 12 months.

W-2s for the last two years

Signed Federal tax returns for the past 2 years for self-employed borrowers and rental income/loss

MAXIMUM FINANCED PROPERTIES

The maximum number of financed properties that the borrower(s) can have is four (4). However, the borrower must still have remaining VA eligibility for a VA loan.

GIFTS

A gift letter, source of funds and evidence of transfer of gift funds is required.

MAXIMUM LTV

100% for Purchase transactions
90% for Refinance transactions
100% for IRRRL Refinance transactions

MINIMUM CREDIT SCORE

For loan amounts </= $417,000, the minimum FICO score required is 600. For loan amounts > $417,000, the minimum FICO score required is 700.

MINIMUM LOAN AMOUNT

There is no minimum loan amount.

OCCUPANCY

Owner-occupied, primary residences are allowed. Second homes or investment properties are not allowed.

RESERVE REQUIREMENTS
If the loan amount is $417,000 or less and the borrower is not qualified with rental income, there are no requirements for cash reserves. If the borrower uses rental income to qualify or if the loan amount is greater than $417,000, six (6) months of reserves must be documented.

SELLER CONCESSIONS

Seller concessions include, but are not limited to, the following:

Payment of the buyer's VA funding fee

Prepayment of the buyer’s property taxes and insurance

Gifts such as a television set or microwave oven

Payment of extra points to provide permanent interest rate buydowns

Provision of escrowed funds to provide temporary interest rate buydowns,

Payoff of credit balances or judgments on behalf of the buyer

Seller concessions do not include payment of the buyer’s closing costs or payment of points as appropriate to the market.

Any seller concession or combination of concessions which exceeds 4% of the established reasonable value of the property is considered excessive, and unacceptable for VA guaranteed loans.

The loan limits for VA Financing for 2015 are the same as FHFA - Fannie Mae and Freddie Mac guidelines. Here is a link with the most up to date information.

http://www.benefits.va.gov/homeloans/purchaseco_lo...

These California cities are in the High Cost areas for 2015;

Los Angeles, Anaheim, Long Beach, San Jose, Sunnyvale, Santa Clara, San Francisco, Oakland, Hayward, Santa Barbara, Santa Maria, Santa Cruz, Watsonville

The CA counties are included in the high cost areas;

Alameda, Contra Costa, Los Angeles, Marin, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz

These Colorado cities are in the High Cost areas for 2015;

Edwards, Glenwood Springs, Steamboat Springs, Breckinridge

The CO counties are included in the high cost areas;

Eagle, Garfield, Pitkin, Routt, San Miguel

Washington and Arlington - District of Columbia

These Hawaii cities are in the High Cost areas for 2015;

Kahului, Wailuku, Lahaina

The HI counties are included in the high cost areas;

Honolulu, Maui, Kalawao, Kauai

These Idaho cities are in the High Cost areas for 2015; Bailey, Hailey

The ID counties are included in the high cost areas; Blaine, Camas, Lincoln, Teton

The NY NJ PA counties are included in the high cost areas;

Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester

These New York, New Jersey, Pennsylvania cities are in the High Cost areas for 2015;

Jersey City, Newark, New York

Elizabeth City in NC with counties of Camden, Pasquotank, Perquimans

In DC, VA, MD, WV - Washington, Arlington, and Alexandria

In MA - Vineyard Haven - Dukes and Nantucket

Fannie Mae/Freddie Mac High Cost are limits are the same as FHA for 2015. VA is the same as FHA for 2015

FHA and VA are owner occupied and have to be mortgage 1-4. Conventional can be both owner occupied or investment with up to 10 mortgages.

For more information on VA Financing - please see one of my other blogs;

http://www.biggerpockets.com/blogs/5110/blog_posts...

For more information on Conventional Financing - please see one of my other blogs;

http://www.biggerpockets.com/blogs/5110/blog_posts...

For more information on FHA Financing - please see one of my other blogs;

http://www.biggerpockets.com/blogs/5110/blog_posts...