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A VA (Veterans Administration) loan is one of the great benefits available to our military veterans, but it may benefit non-veteran home and investment borrowers too. The greatest benefit is the absence of mortgage insurance (instead, VA Funding Fees). Since the mortgage crisis of 2008, many rules have changed in the mortgage industry. One of those rules involves assumptions.
Did you know?
Most VA loans are assumable?
You do not need to be a veteran to qualify.
You do not need to owner occupy to qualify.
In general, a VA loan is assumable if the borrower qualifies for the loan, with the following general rules.
1. If the borrow is a veteran whom has eligible VA loan benefits available, the borrower may assume the loan, use their own VA benefits and the original borrower’s VA eligibility is restored.
2. If the borrower is a veteran, whom has already used all of their VA loan benefits, the borrower may still assume the loan, however, the original VA borrower’s eligibility is not returned until the loan is paid in full.
3. If the borrower is not a veteran, the loan is assumable and the original VA borrower’s eligibility is not returned until the loan is paid off.
In all of the above circumstances, the assumer of the loan must qualify with credit score, debt to income ratios and other lender criteria. In all of the above circumstances, there is no requirement to owner occupy the home, if the original occupancy requirements have been met.
Currently, I am working on the sale of two properties, both duplexes and both are being purchased by assuming existing VA loans. One borrower is a veteran. One is not. One is going to owner occupy the property. One is not. In both circumstances, required closing costs are less than $3,500 for $500,000 assumptions. These loans have an interest rate of 3-3.5% with no Primary Mortgage Insurance (PMI). What a benefit to pass on!
Remember, YOU DO NOT HAVE TO BE A VETERAN TO IN ORDER TO QUALIFY TO ASSUME A VA LOAN. Should you like to find out more about VA Loans, please call or text me at 907-727- 4279. I would be more than happy to get you headed in the right direction.
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