17 Surprising VA Home Loan Facts Of 2022

VA loan program is one of the most popular used benefits available to eligible Veterans, military members currently serving in the military, reservists, and surviving spouses (provided to those who do not remarry). 

The VA home loan program, created in 1944, secured the home financing of millions of veteran families and military members.

This easy and no down payment mortgage program was part of the original GI bill signed by President Franklin D. Roosevelt.   

The Major purpose is to provide home financing to worthy veterans and to help them in buying a property, building, or manufacturing new homes with no down payment.

However, despite being one of the most widely used doesn’t mean all eligible service members understand how the VA loan works. 

Below we are going to discuss 17 Surprising VA Home Loan Facts that most eligible veterans and service members don’t know about VA loans. Let’s get started!


1. The VA Loan Is Not Issued By The Department Of Veterans Affairs

Contrary to what most people think, the Department of Veterans Affairs only guarantees the loan; it doesn’t issue the loan.

It assures the lender that a portion of the loan will be covered if the borrower defaults on the mortgage. 

2. Only Selected Properties Are Eligible For The VA Loan

Cooperative societies and vacant lands are not eligible for VA loan benefits. Vacant land is only eligible if it is used with a construction loan concurrently.

Among other properties, modular or manufactured homes are subject to the lender’s approval.   

3. 90% Of Veterans Buy A Home With Little To No Down Payment 

90% of VA buyers get into a home with little to no down payment, and this is the most beneficial thing for the veterans to become owners.

VA also limits the fees veterans have to pay at the time of closing, such as underwriting lender fees.

For insurance and appraisal fees, the buyers can ask the sellers to pay all of their closing costs, totaling up to a maximum of 4% of the purchase price.

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4. Safety Assurance Of VA Loans   

For the last six years, the VA home loan has had the lowest foreclosure rate though it has a $0 down payment.

The VA guidelines and commitments to keeping the veterans in their homes make it the safest model for other mortgage programs.   

5. VA Home Loans Help The Ineligible Buyers   

After the removal of two years of bankruptcy, eligible service members and Veterans can obtain their VA loans.

Homeowners who experience an uncovered sale may face no waiting period depending on the borrowers and their specific situation. 

6. You Can Reuse The Benefits Of VA Home Loans   

As long as you pay all your existing loans on time, you are allowed to use the benefits of your VA home loans as many times as you like. 

7. VA Loans Must Be Used To Buy Primary Residences   

These loans cannot be used to buy vacation homes, or an investment property VA sets some residential requirements and considers these properties ineligible.   

8. VA Loans Have A Funding Fee

The funding fee covers the cost of obtaining a VA loan and makes sure that the loan continues to require no down payment and no monthly mortgage insurance.

It usually depends on the type of the VA loan and the amount covered.  

9. While Working Overseas, You Still Get A VA Loan   

Military members serving overseas can also get VA home loans by granting a power of attorney to a spouse or someone else to sign the documents on their behalf. However, it comes with a 60-day occupancy rule that only the spouse can satisfy. Otherwise, the borrower is granted a 12-month extension.

10. VA Loans Are The Safest Lending Products 

Mortgage Bankers Association survey has declared the VA loan as the safest lending product in the market for more than the last 8-years, with no down payment requirement.  

11. VA Loan Products Are Available In Varieties  

There are several types of loan products to choose from, including refinancing, purchasing, and home construction options up to manufacturing.

Just like a fixed-rate mortgage, you can choose all types of fixed or adjustable rates for VA home loans.

It also offers a streamlined refinance product known as IRRRL, which provides fast transfer from one VA loan to another.   

12. No Pre-Penalty At All  

If you are planning to pay more than the required amount of monthly mortgage payment.

I was so surprised that some loan options charged you extra if you pay off your mortgage loan early, which is known as a pre-payment penalty. But VA loans don’t have one.  

13. No Private Mortgage Insurance (PMI) In VA Loans

If you don’t put down at least 20%, then you are required to pay mortgage insurance for most conventional loans. However, there is no Private Mortgage Insurance in VA loans.  

14. National Guard Members Or Reservists Can Apply For VA Loans  

After Six years of national service as a reserve or a guard, you can be eligible for the VA Home Loan service. If you are on active duty, you can earn this benefit faster.  

Here is a procedure for the Guard or reserve members who can earn the eligibility.  

  • Six years of service.  
  • Placed on the retirement list  
  • Honorably discharged  
  • Continue serving in their area.   

But please be sure to check the official website of VA loans if you have any type of query or for more information.   

15. Seven Services Can Avail Of The VA loans Benefits 

When it’s a matter of VA loan benefits, the first question that comes to mind is who can take advantage of it.

So, the military branches come to mind. But, it’s not true because seven services can take advantage of VA home loans, including:

  • Army 
  • Navy 
  • Air Force 
  • Marines 
  • Coast Guard 
  • National Oceanic Atmospheric Administration (NOAA) 
  • Public Health Service (USPHS) 

But for more details, you should visit the official website of the VA loans. 

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16. You Can Qualify Even If You Have Served Shortly

If you were dismissed early from your service other than the reason is dishonorably, then you can check your eligibility.

Or if you have been discharged from duty due to the issues mentioned below. So, it can be possible to take the benefits from VA Loans. 

  • Hardship 
  • Government convenience 
  • Reduction in force 
  • Certain medical conditions 
  • Service-connected disability 

17. Other People Also Earn The Eligibility 

The most rarely known fact is that not only those seven services, surviving spouses, and national guards’ members can avail the opportunity of this VA loan, but certainly, other members can also be eligible for this.

Some rules can apply, but if you fall into any of these categories, you might be able to get the VA loan.   

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