We love talking to Veterans! Many of our service members want to know the answer, “do you have to be a first time home buyer to get a VA Loan…” the answer is no, you don’t. A Veteran who previously owned a home has several options, and I guess since I’ve been in this business so long, I understand the confusion. There are First Time Home Buyers Programs in NC that work in partnership with VA Loans, but those recently changed, and you don’t even have to be a first time home buyer to benefit from these programs!
The NC Affordable Housing Program offers two program options that can be used in combination with VA Loans. The programs are available to Veterans who have been renting a home as your primary residence for the past three years. This is an important benefit to the new program for Veterans. Let’s say that you owned a home near Fort Irwin in California, and you received PCS Orders for North Carolina. If you couldn’t sell your home in California, you may have rented it out.
The focus of The NC Affordable Housing Program is on helping Veterans become homeowners in North Carolina. So even if you own another home, as long as you’ve been renting for 3 years – you may qualify for the NCHFA | “NC First Time Homebuyers Program” benefits. The programs do have maximum income limits that can be different per county, and the maximum sales price for new or existing homes is $245,000. Benefits of the programs include additional Tax Credits, ability to qualify for a slightly larger home, below market mortgage interest rates and a 3% forgivable grant to help pay closing costs.Any Qualified Borrower Can Apply For VA Loan Benefits
VA Home Loans are not actually “made” by the Veterans Administration. They simply ensure the lender against foreclosure, and as part of that insurance, they provide the guidelines for what kinds of loans they will insure. When the VA says any “Qualified borrower,” they are referring to someone who has served the minimum time in the military and has met other eligibility requirements as described in the VA Lender’s Handbook. Applying for a VA loan means applying first for a VA Certificate of Eligibility, which can be done online, by mail or via the lender. We can help you update your VA Certificate of Eligibility to determine if you have full or partial entitlement.
If you previously purchased a home using your VA Benefits then you might still have some of that “Entitlement” available to you for the purchase a new home! To Calculate Maximum Entitlement available, consider the following:
- If your previous home was purchased using a VA Loan, and that loan was paid off by the folks you sold the house to, the full entitlement may have been restored.
- If you sold your home to someone, and allowed them to ASSUME your VA Loan, then you might have the full entitlement restored, if one or more of the purchasers were also Veterans.
- If you still own the home, and you are renting it out – you might be able to purchase a new home using your partial entitlement, but there are several restrictions
Veteran Co-Borrowers and VA Loans
We often get asked if someone can “Co-Sign” or be added as a borrower on a Veteran’s Mortgage. In fact, there are several factors any borrower should know about co-borrowing on a VA mortgage loan. There are really only 3 ways for this to happen:
- You must be married to the Veteran
- You must ALSO be a Veteran: As long as you are both Veterans, it doesn’t matter if you are married or not.
- You must be the Surviving Spouse of a Veteran
Additionally, it’s important to remember that anyone on the mortgage must meet the Credit Worthiness standards for the Loan. This generally means that ALL parties on the loan (including the Veteran) must have at least a 620 credit score. The “Co-Borrower” having great credit, does cannot offset the veteran’s credit issues. The Veteran’s Administration says, “The veteran must qualify as a satisfactory credit risk for his or her portion of the mortgage loan.”
VA Loans Are For “Personal Use” Home Purchases
When you apply for a new purchase VA loan, you are required to move into the home as your primary residence within six months of closing. VA home loans cannot be used to buy rental properties with one exception–the borrower may purchase a multi-unit property, live on site, and rent out the unoccupied units. Although the VA loan rules require the borrower to live on the property, there are a few exceptions that allow a Veteran to concurrently have more than one VA Loan. One of the stipulations for being able to purchase a second home is “Net Tangible Benefit” to the Veteran’s Family. Examples of this would include getting a divorce and needing to purchase a smaller home, in other words a substantial change in financial circumstance.
New Purchase VA Loans Are “For The Home Only”
“For the home only” means the new purchase VA loan will not feature cash back to the borrower, or include extra funds guaranteed by the Department of Veterans Affairs for debt consolidation or other non-home related expenses. Borrowers should not expect to get a VA loan in excess of the fair market value or the sale price (whichever is lower) plus allowed add-ons such as energy-saving upgrades or improvements.
Because all mortgage loans that are backed by the Government have the “best” interest rates right now, this is a GREAT program to use! In addition, there’s no monthly PMI! Even if you are purchasing a “Bigger” home, and you are going to make a down-payment, you might still want to use this program! If you are considering a purchase, and want to know more about qualifying for a VA mortgage loan, please call Steve and Eleanor Thorne, Government Mortgage Loan Experts, 919-649-5058