On June 25, 2019, the Blue Water Navy Vietnam Veterans Act became law. This new law took effect on January 1, 2020,and made significant changes to the current VA home loan program. Additionally, the proposal made several changes for Vietnam War veterans who got exposed to a toxic chemical named Agent Orange.
The signing of this bill gave approximately 90,000 Vietnam War Veterans from the Navy disability benefits. The new law also removed loan limits for VA home loan recipients. The passing of this law showed the White House’s commitment to the United States military by allowing borrowers the opportunity to purchase more expensive homes. Also, the new law raised the loan limit for their second home loans from $484,350 to $510,400. These limits vary per county and depend on the local cost of living.
However, before giving out loans, lenders must make sure that the borrower can make their monthly payments. Therefore some qualified lenders have set up their loan limits, with lenders like VA Home Loan Centers offering a loan limit of $5 million. Still, the borrower must prove that they can afford to make their monthly mortgage payments on time.
To qualify for the 5-million-dollar home loan with zero down, the borrower must make at least $93,180 per month before
taxes, assuming that they are taking out a 30-year mortgage.
Veteran Affairs Home Loans
Ever since its creation in 1944, VA home loans have helped approximately 22 million Americans become homeowners. Since then, they turned into one of the most popular home loans available. Unlike conventional loans, which on average, require a down payment of 20%, VA home loans, as previously stated, do not require a down payment. They also offer several benefits, such as low monthly payments, low-interest rates, and no mortgage insurance premiums. Moreover, the loan also has no prepayment penalties and can either be a 15- or a 30- year fixed mortgage. However, eligibility requirements for VA home loans are quite different since they are exclusive to veterans, active-duty service members, and eligible spouses. In addition to their service requirements, VA home loans also have property, income, and credit requirements.
VA Home Loan Eligibility Requirements
To be eligible for a VA home loan, the applicant must have a satisfactory service history. To meet the service eligibility requirement, the applicant must meet at least one of the following:
- Must have served at least 90 days of active duty during wartime.
- Must have at least 181 days of active duty service during peacetime.
- Members of the National Guard and military reserves must have served at least six years.
- Eligible spouses must have lost their veteran spouse while on duty or as a result of a service-related disability.
Applicants must also meet specific income requirements to be eligible for the VA home loan. Suitable types of income include:
- Social Security.
- VA Disability Income.
- Full-time Job Income.
- Part-time Job incomes from atleast two years.
- Self-Employment Income for two years.
- 1099 Income that must continue for at least two years.
- Retirement and pension incomes are also eligible.
- Seasonal income is allowable but must have lasted at least two years.
- Child support and alimony incomes are also acceptable must have a three-year continuance.
- Rental income is also eligible but must be in tax returns.
In addition to income, the borrower must also meet specific credit score requirements. However, these requirements are different depending on the lender since the VA does not have a set credit requirement. However, most lenders recommend that applicants have a credit score of at least 640, with some lenders accepting even lower credit scores.
Furthermore, the property must also meet specific requirements to be eligible for the VA home loan. Eligible properties include:
Single Family Residences, whichas safe to move into, any hazards or safety concerns might disqualify the property.
Multi-Family Properties, up to a fourplex, must have at least one unit occupied by the applicant, while also meeting all hazard and safety standards.
Mobile homes and manufactured homes are also eligible. Still, they must be on a permanent foundation, and inthe case of mobile homes, they must be double-wide.
Getting a five-million-dollar home loan for zero money down is possible. However, the applicant must make enough of an income to cover their monthly payment while at the same time, meeting all the VA eligibility requirements. Once eligibility requirements are met, and pay is determined to be enough to cover the mortgage, the applicant can look forward to living in a luxurious $5 million home.
Phil Georgiades is the CLS for VA Home Loan Centers, a government-sponsored brokerage that specializes in VA loans. He has over 22 years of experience working as a real estate professional. He would be happy to assist you in learning more about programs that are available to you. If you’re interested in applying for a VA loan, click here.