2013 saw the most active year for Veterans Administration Guaranteed Loans, ever. While about half of the nearly 630,000 VA mortgages last year were for new home loans the other half were veterans utilizing the historic low interest rates to refinance existing loans.
The New York Times ran a big article on the success of the VA program on January 9, 2013 which can be read in it’s entirety here
A Big Year For V.A. Loans
More on that in a minute…
The available housing in the Lake Powell area, both on the Arizona side of Page and Greenehaven and on the Utah side in Big Water, Church Wells and Paria consists of a good percentage of manufactured homes. There has been the idea that manufactured homes do not qualify for V.A. loans or FHA loans even. This is not the case. While not all lenders do these types of loans I work with several who do, and do a good job with them. There are some foundation requirements that need to be met, and they must be newer than 1976, but those are pretty standard requirements these days with any loan on a manufactured home. Please call me if you want more information.
V.A. Loans
VA loans are of course for Veterans who must have a “certificate of eligibility” or COE from the VA which verifies to the lender that they are eligible for a VA-backed loan. VA Home Loans are provided by private lenders, such as banks and mortgage companies and the VA guarantees a portion of the loan, enabling the lender to provide the borrower with more favorable terms.
Most VA Loans have no down payment requirement.
The loan must be for a primary residence
There is no mortgage insurance premium, saving thousands over the life of the loan.
Underwriting requirements can be more difficult with the primary focus is on the debt to income ratio
2013 VA Loans
From the New York Times article
The department guaranteed nearly 630,000 mortgage loans in fiscal year 2013, setting a new high just as the program enters its 70th year, said Mike Frueh, the director of the V.A.’s Loan Guaranty Program. The average loan was about $225,000, an amount that reflects the program’s value to “working-class America,” he said.
Calling the program’s growth “pretty incredible,” Chris Birk, the executive editor at Veterans United Home Loans, an online broker of V.A. loans, estimated that total loan volume has risen 372 percent since fiscal 2007.
The V.A. does not set a minimum credit score requirement, but lenders typically add their own, which is currently around 620. The V.A. is more concerned with a borrower’s income and expenses.
To qualify, borrowers must show enough monthly income after paying personal debts and housing costs to meet “residual income” levels set by the department. The levels vary by region and household size. In the Northeast, for example, on loans exceeding $80,000, a two-person household must show at least $755 in leftover income, while a family of five must show $1,062.
From the above numbers you can see that VA loans are very much the working class loan and designed to help our veterans. According the article Arizona saw the biggest jump nationwide in VA loans in 2013 rising 40%.
In closing, for veterans, VA backed loans are a wonderful product and can save thousands not only in upfront costs such as down payments but over the life of the loan with no mortgage insurance requirement. VA loans can be done on single family homes and manufactured homes but you do need a knowledgeable Realtor to work with to find qualifying properties.
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