Ø VA loans insure lenders against default.
Ø There is no down payment.
Ø There are no mortgage insurance premiums.
Ø VA loans are assumable by veterans but the seller could still be responsible for the mortgage unless they obtain a release. The seller may be able to retain VA loan eligibility.
VA Loan Requirements
Ø A credit score of at least 620. Get a free copy of your credit report
Ø One of the following:
1. You have served 90 consecutive days of active service during wartime.
2. You have served 181 days of active service during peacetime.
3. You have more than 6 years of service in the National Guard or Reserves.
4. You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.
Ø Pay VA funding fee. If VA disabled status there is no funding fee. The fee is 2.15% on no down payment loans for first-time users The funding fee for second no down payment users is 3.3%.
Ø The property must pass a VA inspection.
Mortgage Credit Certificate (MCC) program
This program may be used with any 30-year, fixed-rate mortgage. It gives a federal tax credit based on interest paid each year.
Requirements for a Mortgage Credit Certificate
Ø Be a first-time home buyer (or have not owned a home in the last three years)
Ø Must buy a new or existing home. Refinancing does not qualify
Ø Must buy a home in Alabama and occupy it as your primary residence.
Ø Must meet federally established income and sales price limits
Ø Must have a 30-year loan.
This information is a summary only and not to be used to make financial decisions. Contact an experienced local lender for full and current information.