Banc Services Group

   What is a VA Loan?

The VA Loan began in 1944 through the original Servicemen's Readjustment Act, also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families, and the dream of home ownership became a reality for millions of veterans. VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms. 

   What are the benefits of a VA home loan?

There are many benefits of a VA Home loan:

• Equal opportunity. 
• No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property). 
• Buyer informed of reasonable value. 
• Negotiable interest rate. 
• Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation). 
• Closing costs are comparable with other financing types (and may be lower). 
• No mortgage insurance premiums.
• Right to prepay without penalty. 
• For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder. 
• VA assistance to veteran borrowers in default due to temporary financial difficulty.

   How do I get a Certificate of Eligibility?

Complete a VA Form 26-1880, Request for a Certificate of Eligibility: You can apply for a Certificate of Eligibility by submitting a completed VA Form 26-1880, Request For A Certificate of Eligibility For Home Loan Benefits, to the Winston-Salem Eligibility Center, along with proof of military service. In some cases it may be possible for VA to establish eligibility without your proof of service. However, to avoid any possible delays, it's best to provide such evidence.

   Can my lender get my Certificate of Eligibility for me?

Yes, it's called Web LGY. Most lenders have access to the Web LGY system. This Internet based application can establish eligibility and issue an online Certificate of Eligibility in a matter of seconds. Not all cases can be processed through Web LGY - only those for which VA has sufficient data in our records. However, veterans are encouraged to ask their lenders about this method of obtaining a certificate.

   What can VA not do?

Guarantee that a home is free of defects. VA guarantees only the loan. It is your responsibility to assure that you are satisfied with the property being purchased. The VA appraisal is not intended to be an "inspection" of the property. You should seek expert advice (a qualified residential inspection service), as necessary, BEFORE legally committing to a purchase agreement.

If you have a home built, VA cannot compel the builder to correct construction defects although VA does have the authority to suspend a builder from further participation in the home loan program.

VA cannot guarantee that you are making a good investment. VA cannot provide you with legal services.

   I have already obtained one VA loan. Can I get another one?

Yes, your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property, you can have your used eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property.

   Can I still qualify for a VA Loan with a prior foreclosure?

Yes. It is possible to still get a VA Loan with a prior foreclosure even if it was a VA, FHA, or conventional loan. Please talk to one of our mortgage professionals for guidance in obtaining a new loan.

   Is the surviving spouse of a deceased veteran eligible for a VA Loan?

Yes. The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit. .

  I want to buy a house with a VA loan. Do I need to occupy the property?

The law requires that you certify that you intend to occupy the property as your home. This requirement is considered satisfied if you actually intend to occupy the property as your home and in fact so occupy it when the loan is closed or within a reasonable time afterward.

   Can I get a VA loan if I have had a bankruptcy in the last few years?

The fact you and/or your spouse have been adjudicated bankrupt does not in itself disqualify you for a VA home loan. The following rules apply: If the bankruptcy was discharged more than 2 years ago, it may be disregarded If the bankruptcy was discharged within the last 1 to 2 years, it is probably not possible to determine that you and/or your spouse are a satisfactory credit risk unless both of the following requirements are met: you and/or your spouse have reestablished satisfactory credit, and the bankruptcy was caused by circumstances beyond your and/or your spouses control (such as unemployment, medical bills, etc.) If the bankruptcy was discharged within the past 12 months, it will not generally be possible to determine that you and/or your spouse are satisfactory credit risks. 

end faq