An overview of the VA home loan program
The VA home loan program is a 0% down payment mortgage loan option available for service members, veterans, and eligible surviving spouses. The loan under the VA loan program is handled and issued by private lenders like banks and mortgage companies, and they are guaranteed by the Department of Veterans Affairs of the United States of America. The VA home loan program was created by the Government of United States of America in the year 1944.

How does the VA home loan program work?

• Although this program is the Federal Government’s home loan program, the country’s government does not directly issue loans to the veterans.  
• The funding for the loan is carried out by qualified private lenders like mortgage companies and banks.
• The Department of Veterans Affairs of United States of America offers a guarantee to a portion of these home loans provided by the lenders.

What is the VA home loan guaranty?

• The VA home loan program does not involve itself in the loan approval process; however, it only offers a guarantee for a portion of the loan that is taken by veterans from qualifying lenders.
• The VA acts as in assurance that a veteran and his/her family can provide to the qualified lenders.
• In case of an unforeseen event, wherein the veteran or his/her family misses a payment, the lending institution might send in notices and warning to avoid losses. However, the VA acts as a guarantee that the payment would be made.

What is the loan limit for the VA home loan program?

• In majority states of the country, qualifying veterans can purchase a house that is worth approximately $453,100 without having to pay a down payment.
• Veterans who live in expensive areas of the country can buy a house that crosses the above amount without paying anything as down payment as per the 2017 VA home loan limit.

What are the advantages of the VA home loan program?

• In today’s loan market, loans under the VA home loan programs have become a lifeline for the qualifying veterans to purchase their own homes or manufactured homes or improvise their houses by installing energy-saving appliances.     
• Private mortgage insurances need not be paid under the loans offered by the VA home loans program as these loans are backed by the government.
• Lenders offer a more competitive rate on the loans covered by the VA home loan program than the rates offered for non-VA loans. This is because of the VA guaranty that offers the lenders greater opportunity for flexibility and safety.
• Loans under the VA home loan programs are much easier to obtain as the qualification standards are less stringent and the banks can assume a lesser risk as the loan is backed by the government.

What are the advantages of the VA home loan guaranty?

• With a VA home loan program acting as an insurance for the veterans, active service members, and eligible surviving spouses, the lenders like the mortgage companies and private banks utilize this opportunity to provide the veterans favorable terms and conditions. Some of them are, if the sales price of the house does not exceed the appraisal value then there is no need for paying any down payments. There is no requirement for private mortgage insurance premiums. As per the VA rules and regulations, the closing costs charges applied to an individual are limited; however, they are paid by the seller themselves. If an individual pays off the loan earlier the lender cannot charge a penalty. Additionally, if an individual experiences difficulty in making the payments then the VA provides advice to tackle the situation.
• The advantages offered by the VA home loan program guaranty can be reused. Additionally, the benefits offered by VA home loan guaranty do not require an individual to be a first-time home buyer.