FHA loans are designed to help creditworthy lower-income and moderate income individuals and families to buy a home. These loans are beneficial to those borrowers that wish to put a minimum amount of down payment on the home. This program also has a little more flexibility in terms of borrower qualifications.
Some of the key advantages of the VA loan are:
- Low to no down payment
- Seller contributions are allowed
- More flexible underwriting (approval)
- Closing costs that lenders can charge are restricted (e.g. Loan Origination Fee cannot exceed 1%)
- The VA Funding Fee is waived if the veteran is determined to be “disabled”
- VA loans are “assumable” to other qualified buyers
- VA Refinances can be streamlined (less documentation required for approval)
- Some closing costs may be financed (less out of pocket expenses)
- The VA loan is guaranteed by the US Government which makes it more desirable for lenders and other institutions
The US Government does not set a limit on the amount of money a veteran can borrow under this program. However since the loan guarantee is limited most lenders have limits on how much can be borrowed and where there is a down payment requirement on higher loan amount. Here is a list of maximum guaranteed loan limits by State and County.
The veteran must be able to provide a Certificate of Eligibility from the VA to qualify for the loan. Contact Us for more information on VA loans.