4 Keys to Successful VA Offer

Due to VA’s unique guidelines, there are a few important differences to note when drafting an offer for a Veteran buyer that is using a VA mortgage loan.   Let’s jump right into it:

1. Always request a termite report:

VA requires that each veteran using a VA home loan to purchase or to do a non-streamline refinance on a property include a termite report with their loan package.  The termite report must show that the home is free of termite infestation.  If the report shows termite infestation, the veteran’s lender must make sure to obtain a clear termite report prior to funding/closing the veteran’s VA home loan.  No Termite no VA loan closing – not a fun mistake to make.  A veteran’s lender should notify everyone of this – just be aware in case they don’t.

2. Turn times are key:

Our team can complete VA purchase and refinance transactions within 30 days or less.  Also, it is important to note that VA appraisers now have 7 business days to either complete a VA appraisal OR notify the designated point of contact (typically the veteran’s loan officer) that they are having trouble completing the report.  This time-frame is specific to the Arizona marketplace.  Each state/region has its own VA appraisal turn times that may differ from the 7 day Arizona time-frame.

3. VA property requirements:

VA mortgage guidelines outline a series of very specific property related guidelines.  Property being financed with a VA home loan must meet each of these guidelines.  If the property does not meet the VA’s Minimum Property Requirements (MPR’s) the violation must be remedied typically before the VA loan can close based on the fact that VA does not allow seller funded escrow hold-back’s for property repairs (Learn more on escrow hold-back’s).

4. Closing costs – who can pay what?:

VA guidelines define very specific rules with regard to who can pay what fees.  There are 3 basic categories:
1.VA Non-Allowable Fees:
These are fees that the veteran is not allowed to pay.  They typically equal + or – $1,200 (estimate) however this
amount depends on the loan amount and the fees charged by the lender and title company involved in the transaction.
2.  Seller Concessions:  Seller may pay up to 4% of appraised value toward concessions for the VA buyer (concessions include but are not limited
to the buyer’s VA funding fee).
3.  Non Recurring Closing Costs:   Seller may contribute an unlimited amount toward a VA buyer’s non recurring closing costs.

Learn more on VA closing cost limitations/guidelines

Making sure to follow these 4 guidelines will help you make sure that a VA loan related purchase contract is written correctly and that a veteran’s home buying experiences is a success!  Skipping any one of them may lay the foundation for some very unwelcome surprises.

The HOUSE Team is very experienced in the VA mortgage world and we are here to assist you in any way we can.

Please let me know if we can help you with your next VA mortgage loan!

By Jeremy House


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