For decades, the Veteran home loan program has been helping to make homeownership more affordable for qualifying service members and their families. Not only are rates better for VA loans, which reduces the borrower’s monthly payment, but the upfront costs are lower too. Borrowers do not have to put money down towards their purchase and enjoy reduced closing costs.
In honor of this amazing government-backed program, we’ve shared some intriguing facts about VA loans below.
Interesting Facts about Veteran Home Loans
Perhaps you just signed up for the military and are interested in finding out more about your benefits. Or maybe you’ve just returned from deployment and are ready to start the next chapter of your life and buy a home. Either way, you’re curious to learn more about the VA home loan program. Here are some quick and interesting facts you should know!
Fact #1: The VA loan program was started in 1944.
The VA loan program was originally part of the Servicemen’s Readjustment Act of 1944, better known as the GI Bill of Rights. The goal originally was to help Veterans who were returning from World War II. Over the years, the program evolved and became what it is today.
Fact #2: The VA does not provide the loans.
It’s a common misconception that the loans come from the government. However, in reality, the VA does not issue the loans; lenders do. Rather, the government ensures VA loans. This reduces the risk to the lender, allowing them to provide the loan at a reduced rate.
Fact #3: There’s no requirement for a down payment.
We briefly mentioned this already. But it’s such an incredible benefit that it’s worth restating. VA loans do not require borrowers to put money down. This has helped significantly to reduce the barrier to homeownership for qualifying service members and Veterans.
Fact #4: There’s no PMI, either.
Normally, borrowers have to pay for Private Mortgage Insurance if they put down less than 20%. However, since there’s no down payment requirement for VA loans and they’re government-ensured, borrowers do not have to pay for PMI.
Fact #5: They’re only for primary residences.
The Veteran home loan program is designed to help service members and Veterans buy a home so they have a place to live. Therefore, it can only be used for a primary residence. This means that a VA loan cannot be used for a vacation home or investment property.
For more information on the Veteran home loan program, please contact our office.