VA Loan Myths: Fact vs Fiction
The VA Home Loan helps military families achieve the dream of homeownership and is considered one of the strongest VA benefits available. Unfortunately, there are a lot of rumors or misconceptions that may be stopping military members and their families from fully benefiting from a VA loan. That's why we've taken the time to dispel some of the most common misconceptions and separate fact from fiction.
MYTH: Only combat veterans receive this benefit.
THE TRUTH: VA Loans are open to a wider group, including:
MYTH: You can only use your VA loan benefit once.
THE TRUTH: There is no limit to how many times you can take out a VA Loan, only a limit on how much you can borrow at one time. Once an eligible Active Duty, Veteran, Reservist, and or eligible surviving spouse has access to a VA Loan, it will never go away.
Once they have earned their eligibility, it does not go away and they can leverage their VA Loan benefit multiple times throughout their lives, allowing for greater flexibility in their real estate journey.
However, there are some factors to consider. The VA sets a maximum loan amount that buyers are entitled to borrow at a time. If eligible military members exceed their entitlement, they may need to make a down payment.
MYTH: VA Mortgage benefits expire.
THE TRUTH: The VA loan benefit never expires for eligible participants.
MYTH: The VA borrower is limited to one VA Loan at a time.
THE TRUTH: In some cases, veterans and service members can hold multiple VA loans simultaneously. However, specific requirements must be met, such as:
MYTH: You cannot lease your home.
THE TRUTH: According to the law, homeowners with a VA loan are entitled to rent out their home, if previously occupied as their primary home. For instance, if VA buyers have orders to relocate, they may rent out their home. However, when applying for a VA loan, the homeowner must certify that they intend on making the home their primary residence. Borrowers are not permitted to use their VA benefits to purchase a rental property.
MYTH: You need a 20% down payment.
THE TRUTH: Eligible borrowers can qualify with a VA Loan with as little as 0% percent down.
MYTH: You cannot have another VA loan if you have a short sale or foreclosure on a VA Loan.
THE TRUTH: They can still qualify for another VA loan, even if there is a claim on the borrower’s entitlement. The maximum amount that they would qualify for may be less due to the claim, but they are still eligible for another VA loan after the required waiting period as established by VA on a foreclosed property.
MYTH: You Cannot Pay Buyer-Broker Fees When Purchasing a VA Loan
THE TRUTH: Previously, Veterans using VA home loans couldn't pay buyer-broker fees. However, in light of the recent NAR Lawsuit and in order to address potential disadvantages in the competitive housing market, the VA has updated its policy to allow Veterans to pay these fees, ensuring they remain competitive buyers.
MYTH: Only combat veterans receive this benefit.
THE TRUTH: VA Loans are open to a wider group, including:
- Active-duty service members- Those currently serving on active duty in the U.S. Armed Forces.
- Veterans- Individuals who have served on active duty in the U.S. Armed Forces and have been honorably discharged.
- Reservists- Those who have served in the National Guard or Reserves for at least six years.
- Qualified National Guard members- At least six years of service or 90 days of cumulative service under Title 32 orders.
- Some surviving spouses- Spouses of veterans who died while on active duty or from service-related disabilities.
MYTH: You can only use your VA loan benefit once.
THE TRUTH: There is no limit to how many times you can take out a VA Loan, only a limit on how much you can borrow at one time. Once an eligible Active Duty, Veteran, Reservist, and or eligible surviving spouse has access to a VA Loan, it will never go away.
Once they have earned their eligibility, it does not go away and they can leverage their VA Loan benefit multiple times throughout their lives, allowing for greater flexibility in their real estate journey.
However, there are some factors to consider. The VA sets a maximum loan amount that buyers are entitled to borrow at a time. If eligible military members exceed their entitlement, they may need to make a down payment.
MYTH: VA Mortgage benefits expire.
THE TRUTH: The VA loan benefit never expires for eligible participants.
MYTH: The VA borrower is limited to one VA Loan at a time.
THE TRUTH: In some cases, veterans and service members can hold multiple VA loans simultaneously. However, specific requirements must be met, such as:
- Not exceeding the maximum entitlement and eligibility.
- Making a down payment if exceeding entitlement.
- Affordability to manage both loan payments.
MYTH: You cannot lease your home.
THE TRUTH: According to the law, homeowners with a VA loan are entitled to rent out their home, if previously occupied as their primary home. For instance, if VA buyers have orders to relocate, they may rent out their home. However, when applying for a VA loan, the homeowner must certify that they intend on making the home their primary residence. Borrowers are not permitted to use their VA benefits to purchase a rental property.
MYTH: You need a 20% down payment.
THE TRUTH: Eligible borrowers can qualify with a VA Loan with as little as 0% percent down.
MYTH: You cannot have another VA loan if you have a short sale or foreclosure on a VA Loan.
THE TRUTH: They can still qualify for another VA loan, even if there is a claim on the borrower’s entitlement. The maximum amount that they would qualify for may be less due to the claim, but they are still eligible for another VA loan after the required waiting period as established by VA on a foreclosed property.
MYTH: You Cannot Pay Buyer-Broker Fees When Purchasing a VA Loan
THE TRUTH: Previously, Veterans using VA home loans couldn't pay buyer-broker fees. However, in light of the recent NAR Lawsuit and in order to address potential disadvantages in the competitive housing market, the VA has updated its policy to allow Veterans to pay these fees, ensuring they remain competitive buyers.