VA guidelines

Question 1

What is the minimum FICO fro VA loan?

Answer 1

600-619 special requirements; 620-639 special requirements; 640+ all good
(580 FICO is possible with some lenders, many overlays)

Question 2

Min and Max VA loan amounts?

Answer 2

$50k min (CMG)
up to area limit ($424,100 2017)
Above area limit to $1mil, must utilize a high balance product code

Question 3

What portion of the VA funding fee may be financed and what portion may be paid in cash at closing?

Answer 3

All or part of the VA Funding fee may be paid in cash at closing or by financing it
And it may exceed the area limit ($424,100 2017)

Question 4

What factors determine the amount of required VA funding fee?

Answer 4

1. type of service, Regular or Reservist
2. LTV%, 100% vs 95% vs 90% and below
3. Fist Time use vs Subsequent Use
4. Cash Out Refi vs IRRRL vs Purchase

Question 5

What is IRRRL? (Interest Rate Reduction Refinancing Loan)

Answer 5

An IRRRL is a VA-guaranteed loan made to refinance an existing VA-guaranteed loan, generally at a lower interest rate than the existing VA loan, and with lower principal and interest payments than the existing VA loan.

Question 6

What does IRRRL stand for?

Answer 6

Interest Rate Reduction Refinancing Loan

Question 7

Can a past foreclosure affect a future VA loan?

Answer 7

yes, if the foreclosed loan was a VA loan the borrower may not have full entitlement

Question 8

are IRRRL’s subject to SafeHarbor requirements?

Answer 8

yes

Question 9

how long after a BK may one obtain a new VA loan?

Answer 9

BK7: 24 months after discharge
BK13: 12 months after satisfactory payments have been made, and can be made while payments are still being made provided that the monthly payments are included in DTI calcs

Question 10

are there FRMs and ARMs w/ VA?

Answer 10

yes, both, multiple terms available

Question 11

Can VA be used for NOO transactions?

Answer 11

ONLY for IRRRL refi’s, not for purchases

Question 12

What is the occupancy requirement on a VA loan?

Answer 12

Borrower must begin to occupy the home within 60 days of the purchase and continue to occupy the property for at least one year

Question 13

Is multi-Family allowed with VA?

Answer 13

yes, OOC units 1 - 4 are allowed

Question 14

What is the DTI requirement for VA?

Answer 14

41% to 43%, can be higher if approved by AUS

Question 15

How are VA appraisals ordered

Answer 15

order appraisals via webLGY

Question 16

are impounds allowed on VA?

Answer 16

impounds are REQUIRED on VA

Question 17

what is the max number of financed properties under VA?

Answer 17

VA does not limit the number of financed properties a borrower may own (however, many lenders will overlay this with 10)

Question 18

when the VA funding fee is financed, can the loan amount exceed the loan amount limit?

Answer 18

Yes, LTV may exceed the maximum by the amount of the financed funding fee

Question 19

Is there a CLTV limit?

Answer 19

No, however, must have 25% guaranty /equity of the lessor of Appraisal or Purchase Price

Question 20

Borrower must provide the ________ so that we can obtain a Certificate of Eligibility

Answer 20

DD214 (discharge papers)

Question 21

Upon providing us the DD214 we are able to obtain the _______

Answer 21

Certificate of Eligibility

Question 22

The Cert of Eligibility shows two very important items..

Answer 22

1. if the borrower must pay a funding fee

2. amount of entitlement available to the borrower

Question 23

Borrower receives GI Bill to cover housing expenses while going to college, can this income be used as qualifying income for a VA loan?

Answer 23

Answer: no. VA disability may be used, but not GI Bill income.

Question 24

May VA disability be used as qualifying income?

Answer 24

yes

Question 25

Is the Veteran’s spouses income considered when qualifying?

Answer 25

yes, treat the same as the veteran

Question 26

Is the funding fee higher for subsequent use?

Answer 26

Yes, for zero down only.
As of 2017, 2.15 for first use zero down and 3.3% for subsequent use zero down.
No for LTV < 95%

Question 27

What two factors affect the amount of the VA Funding Fee?

Answer 27

LTV and first use vs Subsequent use

Question 28

what is 2017, VA funding fee zero down, first use?

Answer 28

2.15%

Question 29

what is 2017, VA Funding fee 90 to 95% LTV

Answer 29

1.5%

Question 30

what is 2017, VA Funding fee < 90% LTV

Answer 30

1.25%

Question 31

Can a married veteran buy without the spouse?

Answer 31

In California,

• The debts of the spouse must be considered even if the spouse is not signing on the loan.
• The income and FICO of the spouse will not be considered if the spouse is not going to be a borrower on the loan.

Question 32

Is there Mortgage Insurance with VA Loans

Answer 32

No (only the upfront VA Funding Fee that may be financed or paid up front)

Question 33

If the borrower puts the EMD into escrow on a VA loan can they get it back with the zero down VA loan funds and closes?

Answer 33

Yes

Question 34

Does the appraisal fee need to be paid up front with a VA loan?

Answer 34

No, the invoice can be submitted to escrow to be paid.