VA LOAN INFORMATION

UNIQUE CHARACTERISTICS

VA loans are available to military veterans and active military personnel who have served more than six months on active duty or have been in the national guard f or a certain period of time. The main attractions of VA financing are that no down payment is required and there are no restrictions on Seller contributions - Unlike FHA and Conventional, a seller is allowed to pay any or all of the closing costs, including recurring costs and prepaids.

MAXIMUM LOAN AMOUNT

Veterans must have full entitlement. LTV (lesser of sales price or appraised value) will be 100% up to $184,000-00 LTV will be limited to maximum of 95% for loans (sales price) over $184,000.00 A veteran can have his eligibility restored after an assumption only if the loan is assumed by another veteran who applies under his own eligibility.

FUNDING FEE

95.1% to 100% = 2.0% Funding Fee

90.1% to 95% = 1.5% Funding Fee

90.0% and under = 1.25% Funding Fee

*NOTE; For Veterans who have used the VA program for the second and

subsequent time, they will pay (higher) as follows:

95.1% to 100% = 3.0% Funding Fee

-90.1% to 95% = 1.5% Funding Fee

90.0% and under = 1.25% Funding Fee

NORMAL CLOSING COSTS

ELIGIBILITY OF RESERVISTS/NATIONAL GUARD

The law also grants home loan eligibility to those members of the Selected Reserve who are not otherwise eligible for home loan benefits and who have completed a total of 6 years in the Selected Reserve or National Guard. VA funding fee on these particular loans for 100% financing is 2% of the loan amount. The funding fee for these Veterans is as follow:

95.1% to 100% = 2.75% Funding Fee

90.1% to 95% = 2.25% Funding Fee

90.0% and under = 2.0% Funding Fee

GENERAL INFORMATION FOR VA LOANS

1. Buyer MUST be a Veteran or surviving unmarried spouse of a Veteran and have a DD 214 (discharge papers).

2. Veteran can finance 100% (no down payment required).

3. VA charges a funding fee that can be paid at closing by either the seller or Veteran or can be financed back into --the loan amount.

4. Full Entitlement allows maximum loan including funding fee of $184,000.00 (eligibility of $46,000.00 X 4 $184,000.00)

5. VA loans made after March 1988 can be assumed, however, new borrower MUST QUALIFY. However, if another Veteran is assuming, all paper work is to be done through the Veterans Administration, Columbia, SC.

6. VA loan cannot be made in PUD neighborhoods unless they have been approved by VA. A PUD is any neighborhood which has a mandatory fee for pool, tennis courts, etc.

7. Seller can pay all closing cost and prepaids.

8. NEW HOMES: - Unless the house is built under VA specifications, which is unlikely, certain time involved steps will have to be taken.

a. The builder will have to submit plans to VA.

b. The builder will have to write a letter stating he has never sold a home VA and this is his one time exception.

C. The builder will provide a 1 year warranty executed at closing - Form 1859

d. Veteran writes a statement that he is aware that the house was not built under VA supervision, or VA inspection and that he will hold both VA and the mortgage company harmless. This takes a great deal of time and the Purchaser will have to risk interest rates. Remember however, this can't be done in a PUD neighborhood.