Veterans were given more than 1.2 million home loans back by the Department of Veterans Affairs’s VA home loan program over fiscal year 2020, officials announced.
That’s a record-setting $363 billion in home loans, officials said, and the largest number of loans guaranteed in one year since the program began more than 75 years ago.
The total number of home loans guaranteed by the VA since the beginning of the program is more than 25 million.
For most service members and veterans who qualify, a VA loan is one of their most valuable benefits and a no-brainer over other, traditional mortgage types.
Most veterans who served at least 24 months and received any type of discharge besides dishonorable qualify for a home loan. Reservists, National Guard and active duty members with at least 90 days active service and those discharged early for disability are also eligible.
Related: Who Qualifies for a VA Home Loan
You can use a VA-backed home loan to purchase or build a new home or to refinance an existing mortgage.
VA home loans offer buyers great benefits like:
- No down payment - Normally, mortgages require a cash down payment of 20% of the purchase price up front when buying a home, making it difficult for first-time homebuyers.
- No Private Mortgage Insurance (PMI) - Conventional mortgages require a borrower to purchase PMI, which can add hundreds of dollars to the monthly loan payment. PMI is normally required until at least 20% of a loan has been paid off.
- More lenient lending policy - Allowing veterans to qualify for a mortgage when they may not have a long work history or credit history.
- More safeguards to the borrower - VA loans often require more detailed home inspections for things like termites, water damage or foundation issues. Requiring these inspections can prevent veterans from buying a home which may require thousands of dollars in necessary repairs down the road.
Related: Why Get A VA Home Loan
The VA home loan program was created in 1944 to help returning service members purchase homes without needing a down payment or having excellent credit. In current economic times, the VA home loan has become an increasingly valuable benefit when many lenders have tightened their lending requirements as a result of a downward moving economy and the COVID-19 crisis.
VA loans are not issued by the VA. Instead, the VA will guarantee to your lender, a mortgage company, bank or credit union, that you are a good credit risk. You must still meet minimum income and credit requirements, although they may be lower than a civilian would have to meet.
To see if you qualify for a VA guaranteed home loan you can apply on the VA's website.
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