Veterans Mortgage of America is a VA Approved Lender | NMLS ID 3117

What is a VA Loan?

The VA Loan Advantage

A VA loan is a mortgage home loan guaranteed by the U.S. Department of Veterans Affairs (VA). This type of loan is only issued by qualified lenders like Veterans Mortgage of AmericaTM. Since its inception in the 1940’s, the VA Loan Program has helped more than 20 million Veterans and their families purchase an affordable home with distinct advantages to traditional mortgage lending options.

The VA loan allows veterans to acquire 100% financing with a zero down payment, without private mortgage insurance (PMI), and with an energy credit of up to $6,000. A standard conventional loan (Fannie Mae/Freddie Mac) requires a minimum down payment of 20% to avoid paying for PMI. Since a VA loan has no monthly PMI, the veteran can qualify for a larger purchase and a lower payment than conventional type financing would offer. The Department of Veterans Affairs does require a funding fee on all VA loans unless you are exempt from this fee which will be reflected on your certificate of eligibility (COE). This funding fee can range from 2.15% for first time use to 3.30% for subsequent use and is payable to the VA on a purchase or cash out refinance. On a VA interest rate reduction refinance loan (IRRRL) the VA funding fee is .5% and is financed in the loan amount.

To get an idea of what this looks like in real world numbers, see the table below:

Mortgage Amount 0% Down 5% Down 10% Down 20% Down
$100,000 $0 $5,000 $10,000 $20,000
$175,000 $0 $8,750 $17,500 $35,000
$250,000 $0 $12,500 $25,000 $50,000

On a purchase, the funding fee can be rolled into your loan up to 103.3% loan to value (LTV) of the purchase price. In a cash out refinance (conventional loan being paid off by a new VA loan), the veteran is allowed up to 100% loan to value (LTV) and unlimited combined loan to value (CLTV) when there is a second mortgage needing to subordinate. With conventional type loans, the borrower is limited to 80% (LTV). With a VA interest rate reduction refinance loan (IRRRL) (refinancing a VA loan to reduce your interest rate and payment), there is no income required or appraisal. The VA funding on an IRRRL is .5% and is rolled into your loan amount.

The VA will guaranty a loan with an income to debt ratio of up to 65% or less of the veteran’s gross monthly income vs. 44% on conventional type loans. This includes all of the veterans’ obligations reflected in their total mortgage payment and on their credit report.

The maximum VA loan guarantee is determined by the veteran’s certificate of eligibility (COE) and county limits. Since January 2020, VA no longer has a maximum guaranty amount and can guaranty up to 25% of the qualifying loan amount for Veterans with no previously used and outstanding entitlement.

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VA Loan History

The Servicemen’s Readjustment Act passed in 1944 has helped eligible veterans, active-duty personnel, National Guard Reserve members and their eligible surviving spouses achieve affordable home ownership. VA loans are mortgage loans guaranteed by the U.S. Department of Veterans Affairs which are granted by private lenders.

No Down Payment  Qualified veterans may purchase a home with a zero percent down payment compared to up to 20 percent required in a traditional loan.

No Private Mortgage Insurance  The VA loan allows veterans 103.3 percent financing without Private Mortgage Insurance. With no monthly PMI, more of the mortgage payment goes towards paying down the loan amount.

Qualifying  VA loans allow veterans to qualify for larger loan amounts. The program is available to veterans who meet the minimum days of service depending on type of service. The VA does not require a minimum credit score to pre-qualify. A veteran who has used the program to buy a house may use any remaining entitlement balance towards another purchase.

Interest Rates  The government issued guaranty means more competitive interest rates compared to traditional loans. VA interest rates are about .5% to 1% lower than conventional type financing.

Funding Fee  A funding fee must be paid to theVA to keep the program running. The funding fee varies by person but borrowers can roll the funding fee into their loan amount.
*Veterans receiving a minimum of $1.00 in VA disability compensation are exempt from the funding fee.

Jimmy O.
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"USAVA Lending did a fine job. They explained everything. They treated me just fine and they were real friendly. If I had a question they got right back in touch with me at the time they said they would. They got what I wanted. I had no complaints. They corrected things that needed to be done. I was alright with the interest rate being the same. I would recommend them."
Elizabeth C.
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We received VA Refinance from USAVA Lending. All expectations were meet we had excellent communications from the "Executive Assistant. They provided prompt and thorough services. I would recommend USAVA Lending. It was easy with no hassles."
Will M.
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"The service was real good and they were pleasant. They were real polite and nice. The loan closed early and it did not take too long. We had no problems with them. The loan originator was excellent. He set us up and he was fantastic! He called back to see if everything went smooth and to find out if we had any questions. We did not have any questions because they answered them. I would definitely recommend them."
Barbara S.
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"They did a great job! I was very satisfied with their helpfulness and they went as far as taking care of the little details. During the time I was refinancing, my husband was in the hospital and was in ICU. The Senior Loan Processor was very helpful and was there for me when I couldn't be quite there myself. We got a reduced interest rate and reduced payment. I got a lot of great customer service from their team. I was looking for a place online and just happened to find their website and have been trying to refinance for 2-3 years..."
Charles M.
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"Thank all of you that worked to get this mortgage through. The Senior Loan Processor was quite a tireless person working with us. She was good to us and caring. She was also reassuring. We were very nervous and she calmed our fears.We would recommend USAVA Lending very highly. They were friendly, courteous, informative. They explained everything. USAVA Lending was the first loan company we have used in many years and it was worth our while. They facilitated the process, so we had nothing was held up."
Levi M.
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"I have used USA Home Loans a couple of times now and I keep going back because the employee I work with is great. I am always treated well and the employee is very personable. I have recommended them and if asked I would keep recommending them they are efficient."
Anthony Z.
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"Everyone at USAVA Lending did a splendid job in refinancing my home..They were very courteous,imformative, and answered all my questions. They were all very professional in handling my re finance, and it was finished promptly.I recommend your Lending Instition very highly.Thank you all for doing such a great job!"
Joe L.
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"Compared to Chase and other places that I worked with USAVA Lending were excellent. It was impressive because they are in Arizona and I am 1000 miles away in the bay area in California and I got better service from them than I would get from Chase who is literally around the corner. When the loan originator contacted me I was kind of leery that something like this would go through, but he did a remarkable job in terms of managing the loan application and process..."