Before you get a VA loan, you will need a VA Certificate of Eligibility. If you are a military veteran, we will be happy to help you get one. Contact us and we will send a blank VA Form 26-1880 (Request for a Certificate of Eligibility) to you by mail or email. Or APPLY if you are ready! 

Steps in the Process of a VA Home Loan:

There are five basic steps when obtaining a VA Home loan: 

Contact a lender to apply for the loan.  At this point, if the veteran has not already obtained his/her certificate of eligibility, they will need to.  The lender may be able to obtain it off the Internet, or the veteran may have to complete a form and send it to the appropriate eligibility center.  In either case the lender will be able to assist in the procedures of how to obtain a certificate of eligibility.  The lender will complete a loan application and gather supporting documentation, i.e., pay stubs and bank statements.  An important item for veterans to know is that lenders set their own interest rates, discount points and closing points.

• The veteran contacts a REALTOR  to find a property he is interested in.  The purchase and sales agreement should contain a VA option clause.  Sample wording for a VA option clause:
  "It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise of be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs.  The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs."
  The contract must also allow the veteran to "escape" from the contract without penalty if he/she is unable to obtain a VA loan.  Some veterans prefer to contact a lender to get "pre-qualified" (see how much they can afford) prior to searching for a home.  Veterans may also apply for a certificate of eligibility prior to looking for a home or contacting a lender.  Please review our site for information on certificates of eligibility and a listing of lenders.

• The lender will "process" (develop) all credit and income information.  Lenders are allowed to use VA approved automated underwriting systems.  The lender will also order a VA appraisal.  VA's appraisal is not a home inspection or a guaranty of value.  It is an estimate of the market value as of the date the inspection is made comparing it to similar homes that have recently sold in that area.  Although the appraiser does look for obviously needed repairs, VA does request that appraisers not address cosmetic items.  VA does not warrant the condition of existing homes.  The appraiser is a licensed individual who does not work for VA but is chosen by VA to assure his/her review is unbiased in any way.  The lender can not request which appraiser to use, they are assigned on a rotation basis.
• Upon receipt of the appraisal and all supporting documentation on credit, income and assets, the lender will "underwrite" the loan.  It is the lender who reviews all the data collected and decides if the loan should be granted, developed for additional data or if the veteran does not qualify and must be denied.  Although VA does "underwrite" some loans, it is very rare.  The decision on whether or not to approve the loan is generally made by the lender.
• The final step for loans that meet VA regulations and guidelines is the loan "closing" (when the transfer actually takes place).  The lender chooses the title company, attorney or if their representative will conduct the closing.  The title company, attorney or lender representative who will handle the closing will coordinate the date and time.  If there are any questions during the process that the lender can not assist you with, please contact a VA representative.

 Multiple Veterans Home Loan, Is it passible? 

Can I get more than one VA loan?”  The  answer could be yes and it will depend on the each Veteran circumstances.  What is a Va Home Loan?

A VA Home loan is an entitlement to those who are eligible. How much a VA-eligible borrower is entitled to for each loan varies.  The general rule is a veteran can obtain a VA Mortgage Loan  up to 4 times the amount of the available basic and/or bonus entitlement.

The “basic” entitlement available to each VA-eligible borrower is $36,000 on loans of $144,000 or less.  Every eligible veteran also receives “bonus” entitlement that is considered in excess of the $36,000 basic entitlement.  Bonus entitlement kicks in only for loans over $144,000.  Bonus entitlement is calculated by taking the annual Freddie Mac conforming loan limits for counties, multiplying them by 25% and then subtracting the basic entitlement of $36,000.

Example for : ($417,000 x 25% = $104,250) - $36,000 = $68,250 bonus entitlement for 2009. For Hawaii, Alaska, Guam (625,500x25%=$156,375 - $36,000 = $120,375.

 Hawaii-Honolulu County has a limit of $700,000

Technically there are no “loan limits” established for VA loans.  However, there is a limit to the amount the VA will guarantee.  For most counties, the maximum loan for which the VA will provide its guarantee is $417,000. For veterans living in a county with a limit of $417,000, maximum entitlement would be $104,250.  It is often standard to use the basic and bonus entitlements in combination with each other.  

If the VA borrower has paid off a prior VA loan, that can also come into play. Entitlement can be restored as long as a VA loan is paid in full. Typically, if a VA loan has been foreclosed, the entitlement cannot be restored until the loss is repaid.  

Examples can help VA borrowers understand how to figure entitlements for multiple VA mortgages.  Here are several scenarios to consider;  

• A VA borrower is already using $36,000 of his entitlement on a current loan and is purchasing another home for $470,000.  The maximum loan the VA will guaranty in Honolulu county is $625,000.
  
  $625,000 x 25% = $156,789 maximum VA guaranty
  $156,789 - $36,000 = $120,789 available entitlement
  $120,789 x 4 = $483,156 maximum loan amount for this borrower
  
  
• A veteran has used $105,000 of her entitlement on a prior loan which has been paid off and entitlement restored. She is purchasing a home for $395,000 where the county limit is $815,000.
  
  $815,000 x 25% = $203,750 maximum VA guaranty
  $395,000 x 25% = $98,750 entitlement on this loan
  
  Since this borrower’s full entitlement has been restored, the proposed loan amount of $395,000 should be get the full 25% VA Guaranty with entitlement to spare, and a down payment should not be required.
  
  
• A veteran is using $27,500 of his entitlement on a current loan, and is purchasing a home for $320,000 where the county limit is $417,000.



$417,000 x 25% = $104,250 maximum guaranty
$104,250 - $27,500 = $76,750 entitlement available
$76,750 / $320,000 = 23.98% VA Guaranty on this loan

Since VA’s Guaranty will be less than 25%, a down payment will likely be required to meet lender requirements.

In certain cases, a subsequent VA loan is not possible.  Here are two examples where the borrower would be unable to acquire a VA loan:



• A veteran is using $36,000 of her entitlement on a current loan, and is purchasing a home for $120,000 where the county limit is $417,000.
  
  Since the loan amount is not over $144,000, this veteran’s bonus entitlement cannot be used. And, the VA Guaranty would be zero.  
  
  
• A veteran has already purchased an $800,000 home with a VA loan where the county limit is $729,750.  He wants to purchase another home for $350,000.



$729,750 x 25% = $182,437.50 Maximum Guaranty
$800,000 x 25% = $200,000 exceeds entitlement and down payment was required

Since this borrower has already exceeded his maximum VA loan entitlement, he is not eligible for another VA loan. 
Please  contact me with your questions at 808-343-1113