Moving can be expensive, and if you are an Active Duty Military – you could be faced with the possibility of a PCS relocation to one of our bases in NC. Because of that, in North Carolina, we offer several grants and other incentives to help Veterans, not just those who are first time home buyers, or those using VA Loans. The Grants can help with the costs involved in buying a home. Because of PCS troop movement, some Veterans have not been in a monetary position to cover closing costs with VA Loans, but we can help take care of that in NC!
VA Loans and Grants From The State of NC
Veterans have a unique benefit allowed to them when moving to NC in the form of Grants that do not have to be paid as long as long as you are in the home for 15 years. The NCHFA, through the State of NC, offers grants of up to 3% to help with any down payment you might need or to cover closing costs. To qualify for the program, you simply need the following:
- Veteran needs to be purchasing a new or existing home
- Veteran can be EITHER a first-time or “move-up” or second or third (or fourth time) buyer. You simply have to close on your “other” home before you close with this Grant from the State of NC
- The Veteran must purchase a home within the state boundaries of North Carolina and occupy it within 60 days of closing / there are some guidelines for having family members occupying the property in the event of Deployment of active Duty Military members.
- The Veteran’s annual income can not exceed $87,500. Other programs we work with are looking at “household income” which includes a spouse (for instance) with this program, we are only looking at the total income of the folks who are actually on the VA Loans.
- The Veteran apply for a FHA, USDA, VA or conventional loan and meet the sales price limits of the loan type, so for instance the maximum no down payment VA Loans for most counties in NC is $424,100.
- The Veteran must be a legal resident of the United States
- The Veteran’s middle credit score for the program must be at least 640. This applies for anyone on the mortgage loan. We need all applicant’s to have a middle score of at least 640 which is actually higher than what we need for VA Loans not using the Grants from NCHFA.
Veteran Home Buying Tips in NC
Number one in importance is to figure out how much you can comfortably spend on a mortgage. The last thing you want to do is get in over your head on a home that does not fit your budget. There are many costs associated with owning a house it isn’t just limited to that monthly mortgage bill. Utilities, water and Home Owner Association fees need to be considered into the budget as they can quickly add up every month!
Veterans might qualify for another NC First Time Home Buyer Benefit! We have Mortgage Tax Credits for Veterans Available! These mortgage credits could save you up to $2000 a year and you don’t have to use the Grant program to qualify! They do require a slightly higher credit score, however, for qualified Veterans this is a HUGE benefit not all Bank’s offer (we do). In five years this could save you $10,000 – it is a benefit you receive AS LONG as you live in the house!
Don’t forget owning a home means being responsible for the upkeep and maintenance. VA Loan Underwriters are required to add in factors for Maintenance and Utilities to qualify you for VA Loans in NC – and those vary depending on what part of the country you are moving to.
VA Loans are also underwritten considering Veteran Student Loan Payments. If those Student loan payments are in deferment – we are going to need to document those payments. One of the reasons some Veterans joined the Military is because of the Military Student Loan Repayment Program. One of the incentives of joining the Military could be repaying part, if not all of your student loans. The amount that could be repaid varies across the military branches. For instance, the Navy and Army pay up to $65,000, however some folks in the Air Force only receive $10,000. We will need the evidence of that repayment to be certain we are providing the accurate picture of your Debt to income ratios for VA Loans.
To make the VA Loan Process quicker, go ahead and get your Certificate of Eligibility (COE), which is pretty easy to obtain through the Veteran Administration eBenefits portal. However, as lenders, we can help you get that COE, and you do not have to wait for it to go ahead and get pre-qualified to buy a house. It just speeds things up by a few short days.
Remember that the Credit Score you’ve gotten from Credit Karma (or where ever) is not likely to be the same as the credit score from a mortgage lender. You have a multitude of different kinds of credit scores. If you talk to a lender and allow them to pull your credit – they SHOULD ALWAYS give you a copy of your report. We always do! About a quarter of all credit reports contain errors serious enough to derail a home loan, according to the U.S. Public Interest Research Group… we can help you get through the process of getting things fixed – we do NOT suggest that you use one of those Attorney Firms that says they will get everything bad off of your credit report. In general, that does NOT help you get into your dream home!
VA Loan Underwriters really like to see you’ve had your job for at least two years. That’s not always possible, especially for Veterans who recently separated from the military. So we are going to do our best to make some connection to your position in the Military with your current position. That might take some help on your part, because not all Underwriters understand the “initial infested” terms used by the Military.
If you were a Communications specialist, for instance, and had responsibility for repairing radar equipment – and now you work for Verizon, keeping towers in order, that will definitely work. (Hope I’m making sense here – just help us with showing how your experience and training helped you land your current job.
Basically, they’ll want to see continuity between your previous work, education, MOS or experience and your current employment. But even if there is continuity, if there was a gap of unemployment you’ll likely need to wait until you’ve been back to work for at least 6 months — the length of back to work can vary, but it often corresponds to the duration of your job gap.
Once you earn the VA home loan benefit, it’s yours for life. This isn’t a one-time lending option or a program exclusively for first-time home buyers. You can use these benefits over and over again. In fact, it’s possible to have more than one VA loan at the same time, especially if you are in a situation where you are divorced and you are maintaining a different property for your children. So don’t let anyone claim you’re ineligible because you had a VA loan a decade ago.
If you are willing to make some sort of down payment to buy your “Dream Home” 40 years after service, using your VA Loan Benefits might be the CHEAPEST way to buy that bigger house! (especially once you figure out the reduced down payment and PMI costs)!
The VA wants Veterans purchasing homes that are “move-in ready.” To that end, independent VA Loan appraisers have to make sure your home purchase meets a set of minimum property requirements as part of the VA Loan appraisal process. Any defects or issues noted by the appraiser have to be completed before the loan can close. The issue is you — the Veteran purchasing the home — can’t be the one to make those changes, in most cases. However, we do offer Escrows for RIGHT AFTER closing, if you want to wait until you’ve purchased the home to get the improvements made.
That’s why fixer-uppers and questionable foreclosure properties are so difficult to finance with VA Loans. You also want to be careful regarding unique properties (log cabins, geodesic domes, large acreage) for which it can be tough to find good comparable recent home sales.
VA Loans do not require ANY down payment (most of the time). It’s also common in NC for the seller to pay all of your VA Loan closing costs. But you’ll still need SOME money up front to cover things like an earnest money deposit, the appraisal and a home inspection. You may get all of that money back at the closing table, but figure that you’ll need some cash – which is why the NCHFA Grants we talked about earlier could be so helpful!
Mortgages are a product and people in the industry don’t work for free. There are always going to be costs that come with securing a home loan. It’s more a matter of who pays them and how.
Lenders offer “no closing cost” loans because they still make money on them . The reason you don’t pay closing costs on these is because the lender pays them for you. Here’s how: The lender covers those additional costs by giving you a higher interest rate, which you’re stuck with for the life of the mortgage or until you refinance. That means you’re paying more each month – it’s a trade-off. It’s one we ALWAYS go over with the Veteran to see which scenario works best for YOU!
Final Advice to Veterans Buying a House in NC
Don’t Change Jobs or Make Big Purchases During the Process. Once you’re under contract on a home “change is not your friend.” We have to document everything again right before closing. We are pulling another credit report, we are calling your employer. Some Veteran’s think we might not “know.” Not true… Putting a bunch of furniture on a credit card or buying things like a car or a boat before your loan closes will set off serious red flags and may kill your loan immediately.
If you have questions about qualifying for VA Loans, or you want to know what payments would be on a certain property in North Carolina, please call Steve Thorne, 919 649 5058. We love helping active duty and retired military families locate to our area, and we genuinely appreciate your service!