@Zach White I have represented military buyers here in the Chicago market, and the only issue I have ever run into with the VA loan is if the appraisal doesn't come in high enough. This has only happened one time in any of my deals, but if the appraisal comes in low it forces a second negotiation because someone has to come up with the difference. Essentially, the property has to be able to appraise in order to receive the 100% financing the VA loan program offers.
@Zach White congratulations man. That's awesome that you found a home and made an offer. Sometimes there is a misconception with VA loans that they can be harder to write. And frankly, if the lender doesn't know what they are doing they can be but most lenders know what they are doing with these loans. I don't know your market specifically so the numbers you are offering might be a great offer for the area. I would also state that the appraisal part of VA loans can be the toughest step of the process. VA loan appraisers don't have a good system in place to stay in communication with the lenders. All other loan types have a system where the appraiser will update the system to when they are going out to the house, when they spoke with the owner, when the report will be back, etc. VA is not like that. One day you just get the report. It can be frustrating. So if you win this home, ask you lender to do a rush appraisal. Especially around the holidays I would recommend this. If you don't win this house, ask your lender to pre-underwrite you. That way the next time you make an offer you can tell the seller that you have already been through underwriting. It does help if anyone is feeling unsure about a VA loan. Hope this helps!
I will second both comments. VA financing is pretty straightforward, and a great benefit that you should take advantage of, but many lenders just don't specialize in it. We are actually a huge VA lender, and once you know it, it's not that complicated. Andrew and John both made great points, and there's way to stay ahead of things to prevent bumps down the road....again, if the lender is very well-versed in VA and is efficient. As John said, the appraisal not coming in high enough is the most common issue (not that it's very common, I don't want to scare you), but sometimes we can work it to your advantage if it's only off by a small percentage.
Welcome @Zach White
I just purchased my first multifamily property with a VA loan so let me dive into a few issues I've had. First of all, the above comments are all correct, VA financing is pretty straight forward. However, I think it's important to go with a lender who knows the specifics on the VA loan because there are a few things here and there that can break a deal.
1. As stated above, Appraisal Appraisal Appraisal. Considering you plan to put 0$ down, in a competitive market you may have it come back lower, especially on a multi-family property. This happened to me on the first two unit property that I was under contract for. That deal ended up falling through.
2. Termites. Under the VA guidelines for pest inspections, they make it difficult if there has EVER been any termite damage what so ever. An inspector stated that it was old and does not appear to be in any part of the structure. Even so, the underwriter had to come back 5 days before closing and request that a certified contractor go back out and look at it, this cost me $175. Not a huge deal, however, if there was any sign of it I would have to pay an engineer to come out to recommend repairs....(...$$). This is something my loan officer should have picked up from the inspection so I could negotiate pending an issue, but they didn't, which goes back to my first point.
Other than that, I love what the VA loan has allowed me to do. Try to get as much $$ for closing as you can.
Congrats on making your first offer! Let us know what happens next. I bought my first home using a VA loan as well and the process was super easy and straightforward. The only delay you may experience in closing the deal is that the VA can take more time to appraise. That was the case with my situation, the VA didn't send out an appraiser in a timely manner. Make sure to hire a good inspector during your due diligence period. Many issues can be avoided with a good inspection. My inspector failed to properly inspect my roof and consequently leaked 2 weeks after I closed. This resulted in $5k forth of damages out of pocket to replace my roof... ouch. But I will agree with the other posts that many sellers have a bad impression on VA offers because they think it'll take longer or that it will be more complicated. Best of luck! Find a good inspector!
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