The Veterans Administration (VA) helps Service Members, Veterans, and eligible surviving spouses to become homeowners. That is great news for buying Orlando real estate for your primary residence!
The VA provides a home loan guaranty benefit and other housing-related programs to help:
- Retain, and
- Adapt a home for personal occupancy.
VA Home Loans are provided by private lenders such as banks and mortgage companies. The VA guarantees a portion of the loan, enabling the lender to provide more favorable terms (e.g., reduced mortgage rates and reduced closing costs).
How does a VA-backed home loan work for Orlando Real Estate?
With a VA-backed home loan, the VA guarantees a portion of the loan from a private lender. If the VA-backed home loan goes into foreclosure, the guarantee allows the lender to recover some or all of their losses.
Since there is less risk for the lender, they’re more likely to give loans under better terms. The VA notes that nearly 90% of all VA-backed home loans are made without a down payment, which is an amazing benefit.
Lenders follow the VA standards when making VA-backed home loans. They may require additional standards before making a loan. These standards may include having a high enough credit score and/or getting an updated home appraisal.
Four VA loan types
There are four different loan types that are offered by the VA. They include:
Purchase Loans and Cash-Out Refinance: This loan is perfect for Orlando’s real estate. The VA-guaranteed loans are available for homes for personal occupancy, a spouse’s occupancy and/or a dependent’s occupancy. This is offered to active duty service members only. Satisfactory credit along with sufficient income to meet expected monthly obligations and a valid Certificate of Eligibility (COE) are required to be eligible for this type of loan.
Interest Rate Reduction Refinance Loan (IRRRL): The IRRRL is a “VA to VA” loan. It can only be done if you have an existing VA guaranteed loan on the property. The IRRRL is generally performed to lower interest rates to reduce the monthly payment on an existing VA guaranteed loan.
Native American Direct Loan (NADL) Program: The NADL program helps Native American Veterans purchase, construct, improve, or refinance a home on Native American trust lands. The tribal organization must participate in the VA direct loan program to be eligible and you must have a valid Certificate of Eligibility (COE).
Adapted Housing Grants: The VA helps Veterans with certain total and permanent disabilities related to military service to obtain suitable housing with either a Specially Adapted Housing (SAH) or Special Housing Adaptation (SHA) grant.
Florida’s “Salute our Soldiers Military Housing Loan Program”
Governor Ron DeSantis announced a new initiative to help veterans with housing. The new $8 million-dollar initiative, “Salute our Soldiers Military Housing Loan Program” is to help veterans in the transition process after their active duty, DeSantis says. The motive of this initiative is to consolidate the housing assistance process.
The new initiative will be administered by the Florida Housing Finance Corporation. It is said to include down payment and closing costs assistance that will be forgiven in five years. The initiative will go into effect on March 2, 2020.
DeSantis notes that Florida is just shy of California and Texas where veterans reside.
Contact Global today to see if you are eligible for a VA loan. Length of service or service commitment, duty status and character of service determines eligibility for specific home loan benefits. A qualified Realtor will assess eligibility and will use the VA loan calculator to calculate available VA loan rates.