Veterans Administration (VA) home loans honor San Diego's military tradition
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Yet many veterans and home sellers are unaware of the benefits of VA real estate loansMilitary bases in San Diego include the largest concentration of naval facilities in the world; Marine Corps bases such as Camp Pendleton that encompass over 125,000 acres; and Coast Guard stations. With a strong military history dating since World War II, the VA home
loan program in San Diego honors the commitment and sacrifice on the part of the Country’s service men and women. Yet the qualifications and benefits of this program meant to assist our military members are a mystery to many veterans and most homes sellers in
San Diego County.
Veteran home buyers in San Diego
The primary benefit of the VA program to veteran home buyers in
San Diego is that they can get a no-down-payment loan at competitive interest rates with no need for additional private mortgage insurance. VA loans are available through traditional lenders subject to more liberal terms such as lower credit scores and higher debt-to-income ratios.
In general, eligible veterans are those who served in the US military as follows:
· World War II until 1980 : At least 181 days of continuous active duty; or
· 1980 until 1990: 24 months of active duty (or the full period of at least 181 days for which ordered or called to active duty); or
· August 1990 up to present (i.e. the Gulf War period): 24 months of active duty (or the full period of at least 90 days for which ordered or called to active duty).
· Reserve or National Guard members without sufficient active duty after 6 years of service.
Service times less than those above can also be approved for a VA home loan in the case of a service-related disability.
The quickest way for a veteran to verify their eligibility is to contact a participating lender to get their “Certificate of Eligibility” via the “Web LGY” system. This modernized system launched by the VA in 2006 can provide eligibility confirmation in seconds.
San Diego home sellers—No military service required
San Diego home sellers (including home owners, banks, and even real estate professionals) have been historically cautious about VA-loan-based offers in periods of high real estate demand or, conversely, low inventory. This is due to the VA loan’s particular requirements that health and safety issues be addressed prior to closing; the 45- to 60-day closing period for loans; and the limitations on closing costs paid by the veteran buyer which may require credits from the seller. However, since the current inventory situation is thought by many experts to be an artificial, and since many “cash” home offers are falling out of escrow, the day of the VA loan may have arrived. The VA loan is best suited to moderately priced homes in good condition (as opposed to foreclosed properties in disrepair) since critical health and safety repairs must be completed before closing. As with FHA loans and other home loans programs, formal pre-approval is a prerequisite for an offer to be taken seriously; pre-qualification letters simply won’t suffice in most situations these days. As more shadow inventory of delinquent and foreclosed homes are offered for sale on the San Diego real estate market, the strength of the VA program and its low down payment may be a boon for both vets and motivated home sellers.