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5 Things You Probably Don’t Know About VA Loans


We are pleased to welcome Phil Georgiades as our guest blogger today.  Phil is the Chief Loan Steward for VA Home Loan Centers, a veteran and active duty military services organization. - The KCM Crew

Veteran Buying a HouseVA loans are the most misunderstood mortgage program in America. Industry professionals and consumers often receive incorrect data when they inquire about them. In fact, misconceptions about the government guaranteed home loan program are so prevalent that a recent VA survey found that approximately half of all military veterans do not understand it.

With this in mind, we would like to debunk the most common myths about VA Loans.

Myth 1: The VA loan benefit has a “one time” use.

Fact: Veterans and active duty military can use the VA loan many times. There is a limit to the borrower’s entitlement. The entitlement is the amount of loan the VA will guarantee. If the borrower exceeds their entitlement, they may have to make a down payment. Never the less, there are no limitations on how many times a Veteran or Active Duty Service Member can get a VA loan.

Myth 2: VA home loan benefits expire if they are not used.

Fact: For eligible participants, VA mortgage benefits never expire. This myth stems from confusion over the veteran benefit for education. Typically, the Montgomery GI Bill benefits expire 10 years after discharge.

Myth 3: A borrower can only have one VA loan at a time.

Fact: You can have two (or more) VA loans out at the same time as long as you have not exceeded your maximum entitlement and eligibility. In order to have more than one VA loan, the borrower must be able to afford both payments and sufficient entitlement is required. If the borrower exceeds their entitlement, they may be required to make a down payment.

Myth 4: If you have a VA loan, you cannot lease the home.

Fact: By law, homeowners with VA loans may rent out their home. If the home is located in a non-rental subdivision, the VA will not guarantee the loan. If the home is located in a subdivision (such as a co-op) where the other owners can deny or approve a tenant, the VA will not approve the financing. When an individual applies for a VA loan, they certify that they intend on making the home their primary residence. Borrowers cannot use their VA benefits to buy property for rental purposes except if they are using their benefits to buy a duplex, triplex or fourplex. Under these circumstances, the borrower must certify that they will occupy one of the units.

Myth 5: If a borrower has a short sale or foreclosure on a VA loan, they cannot have another VA loan.

Fact: If a borrower has a claim on their entitlement, they will still be able to get another VA loan, but the maximum amount they would otherwise qualify for may be less. For example, Mr. Smith had a home with a $100,000 VA loan that foreclosed in 2012. If Mr. Smith buys a home in a low cost area, he will have enough remaining eligibility for a $317,000 purchase with $0 money down.  If he did not have the foreclosure, he would have been able to obtain another VA loan up to $417,000 with no money down payment.

Veterans and Active duty military deserve affordable home ownership. In recent years, the VA loan made up roughly 13% of all home purchase financing. This program remains underused largely because of misinformation. By separating facts from myth, more of America’s military would be able to realize their own American Dream.

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Phil Georgiades

About Phil Georgiades

Phil Georgiades is the Chief Loan Steward for VA Home Loan Centers, a veteran and active duty military services organization. Phil is a specialist in government mortgage products, consumer advocacy and affordable homeownership. Phil has provided real estate counseling for over 15 years. Phil is licensed by the California Bureau of Real Estate and has been with VA Home Loan Centers since 2009.

3 Responses to “5 Things You Probably Don’t Know About VA Loans”

  1. Andy Rose February 7, 2014 at 8:50 pm # Reply

    The first half of #4 is completely wrong. First you have to be an owner-occupant since with a VA loan you have to live in the home being purchased. Now if after living in the home and you later move you CAN rent out the home, unless restricted by covenants.
    And to clarify the 2nd part, with a multiplex home, you have to reside in one of the units.
    Other than that its a great post and good information!
    Let's help Veterans and give them correct information.

  2. Hotaru Akane February 16, 2014 at 10:36 am # Reply

    Can I just say what a relief to find an individual who truly knows what they're talking
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    a problem to light and make it important. More people ought to look at this and understand this side of your story.
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  3. Bryan sam May 5, 2014 at 4:21 am # Reply

    Meeting all requirements for a VA home advance is a straightforward system for generally veterans. Any moneylender who offers VA supported home loans can help you with the subtle elements. The trap is to do the examination to discover loan specialists who offer VA home credits and to apply to every independently.

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