Monique Beaudoin Presentation - Maine State Housing Authority

Report
VA Benefits Briefing
Department of Veterans Affairs
Loan Guaranty Briefing
Maine Affordable Housing Conference
October 30, 2013
VA Benefits Briefing
This document contains U.S. Department of Veterans Affairs proprietary
business information and may not be reproduced without permission.
Cleveland Regional Loan Center
Cleveland VA Regional Loan Center
1240 E. 9th Street
Cleveland, OH 44199
States of Jurisdiction: Connecticut, Delaware, Indiana, Maine, Massachusetts, Michigan,
New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont
(800) 729-5772 – option 4 (underwriting, new lenders, auditing, etc.)
[email protected]
(800) 729-5772 – option 2 (appraisal questions, condos, builder ID’s, etc.)
[email protected]
Cleveland RLC Website: http://www.vba.va.gov/ro/cleveland/index1.htm
National VA Loan Guaranty Website: http://www.benefits.va.gov/homeloans/
VA Benefits Briefing
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Primary Benefits of VA Home Loans
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VA Benefits Briefing
100% financing of the sales price or value, whichever is
lower, generally up to $417,000 (some states do have
high cost counties which exceed this)
No PMI or VA Funding Fee if the Veteran is in receipt of
compensation from VA monthly for a Service
Connected Disability
VA funding fee can be rolled into financing
Fixed rate and adjustable rate mortgages
Can be used in conjunction with a housing program
administered by a state, county, or municipal
government entity without VA approval (fees ≤ $250)
Seller can typically pay all closing costs
Veteran can close on an Interest Rate Reduction
Refinance Loan (IRRRL) with no money out of pocket
Refinances may be for 100% of the appraised value +
VA Funding Fee + Energy Efficient Improvements
Fully assumable by any qualified borrower
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VA Loan Products
 Purchase Loans help you purchase a home at a competitive interest rate often without requiring
a down payment or private mortgage insurance. Veteran can purchase VA approved
condominium/townhouse, single family home, up to 4 attached unit properties, and farm
residences.
 Interest Rate Reduction Refinance Loan (IRRRL) also called the Streamline Refinance Loan can
help you obtain a lower interest rate by refinancing your existing VA loan.
 Cash Out Refinance loans allow you to take cash out of your home equity to take care of
concerns like paying off debt, funding school, or making home improvements up to 100% of
value. Must have at least a $1 lien against property.
 Energy Efficient Improvements can be added onto the 100% financing
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Eligibility Requirements for Home Loan Guaranty
Service requirements vary based on when the applicant served.
Generally, an applicant must:
– Serve 181 continuous days during peacetime during
certain periods prior to September 1980, or 2 years after
September 1980 with at least a discharge under honorable
conditions
– If currently serving on full time active duty, at least 90 days
is required with an acceptable character of service
– It may be possible to have served less then 2 years on
active duty if discharged for a service-connected disability
– National Guard and Reserve members generally have to
have 90 days of active duty service under Title 10 or six
years in the Selected Reserve or National Guard actively
participating with an honorable discharge
VA Benefits Briefing
The applicant must have a
Certificate of Eligibility
(COE) from VA that verifies
his or her military service to
the lender to qualify for a
VA-backed loan. The Veteran
may be able to obtain a COE
through eBenefits at
www.eBenefits.va.gov or
the Lender directly through
WebLGY in the Veterans
Information Portal. You may
also still have the Veteran
complete and mail VA Form
26-1880 to the Atlanta
Eligibility Center.
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Recent Changes?
• SAR training is available on-line
• Process for Determining Spousal Income Qualifications in Jurisdictions that
Recognize Same-Sex Marriages
• Portal Security Functions
Not much…this is VA after all!
For the latest changes, go to VA’s Lender website:
http://benefits.va.gov/homeloans/lenders.asp
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What are the Differences When Qualifying a Person?
• Automated underwriting is allowed but if sent in for prior approval by VA,
full documentation is required
• We still have the residual method which does consider child care
expenses, maintenances, utilities and taxes
• No minimum credit score, but generally the Veteran must not have
derogatory credit within the past twelve months
• If the Veteran does not have standard credit trade lines, we will consider
alternative credit references, i.e. rent, utilities or car insurance payments
• We do not require reserves unless there is rental income involved which is
required for qualification purposes
• Only the Veteran and his/her spouse, can be included for guaranty
purposes of the loan. Co-signors will reduce your guaranty.
• Military Personnel must be under contract for a year from the date of
closing
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Transitioning from a Refinance World to a Purchase World
• 99% of all VA loans underwritten by lenders with “automatic” authority
(similar to Direct Endorsement)
• VA has no bottom line credit score
• Very important that lenders understand that military service time is not
considered employment history, but what earned the Veteran their
benefits
• 2 year post military employment history required in most cases, but
consideration can be given to 12 month employment history
• Waiver of employment history if Veteran obtains a position related to
military training (military police to police officer, field medic to a
nurse/paramedic, computer programming, Air Force pilot to a commercial
pilot, etc.)
• General rule of thumb for qualifying is a maximum of 41% debt to income
ratio and meet VA’s residual income guidelines (AUS systems may accept
higher ratios)
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VA Properties
• VA no longer allows pure mobile homes. Homes must now be
permanently attached to a foundation and titled as real estate. No mobile
home parks or land rental allowed.
• 1-4 family units, which are safe, sound and sanitary
• Condominium or condex projects require VA approvals prior to closing, not
PUD’s. Processing time is 4-6 weeks currently
• New Construction, every builder must be registered with VA
• SAR approval process, data on-line at
http://benefits.va.gov/homeloans/appraiser_sar.asp
Valuation Department can be reached at
800-729-5772, option 2 or [email protected]
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Loan Management
Message: VA helps Veteran borrowers retain their home or avoid foreclosure during times of
financial difficulty, reducing the risk of homelessness.
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Since 2009, VA has assisted over 291,000 borrowers in default avoid foreclosure. These resolved delinquencies
resulted in over $9.6B in potential claim savings, while assisting with the Secretary’s goal to end Veterans
homelessness.
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In FY12, VA helped 81 percent (nearly 70,000) Veterans in default retain their homes or avoid foreclosure,
while making over 505,000 calls to Veterans and their servicers.
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Default Resolution Rate has remained strong despite a troubled housing market. Since implementation: FY09:
71.5%, FY10: 76.3%, FY11: 83.0%, FY12: 81%
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VA has 9 Regional Offices with 149 staff trained to help delinquent Veteran borrowers find successful
resolutions.
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For the last 21 quarters (5 years) VA has had the lowest foreclosure rate (1.88%) of all loan types: Prime
(2.13%), Subprime (11.01%) and FHA (3.68%).
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Thank You
Thank you for assisting our Veterans, Service Members and their
families.
We are lucky to have them and VA appreciates your participation
in our home loan program!
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