Applications for New Home Purchases Slip in May: MBA

Mortgage applications for new home purchases fell in May from the previous month, according to the Mortgage Bankers Associations Builder Application Survey.

The MBA reported that applications fell 6% from April, but were up 8% from a year ago in May. The comparisons do not adjust for seasonal patterns.

New single-family home sales were running at a seasonally adjusted annual rate of 488,000 units last month, the MBA also said Tuesday. Thats down from the pace of 503,000 units set in April.

Conventional loans made up the lions share of applications, at 68.4%. FHA loans followed at 17.6%, while VA loans represented 13.4% of applications and USDA loans composed 0.6%. The average loan size increased to $328,032 from $325,233 in April.

Guild Mortgage Acquires AmeriPro Home Loans; Becomes One of the Largest Independent Mortgage Lenders in Texas

SAN DIEGO–(BUSINESS WIRE)–Guild Mortgage Co. has reached an agreement to acquire AmeriPro Home
Loans based in Austin, Texas, with 29 branches and $750 million in loan
volume in 2015. The transaction is expected to close July 1 and will
make Guild one of the largest independent mortgage banking companies in
Texas. The acquisition will also add new Guild branches in Oklahoma,
Florida, Colorado, California and Utah. AmeriPro was founded in 2003 and
has become recognized as a leading residential lender in the Southwest.
Since 2008, it has been a subsidiary of Tenura Holdings, Inc., an
Austin-based investor in realty, title and insurance companies.

The acquisition is the newest step in Guild’s long range plan to grow
through acquisition, adding branches in new and existing markets, and
preserving its customer service culture with experienced, talented loan
officers with established relationships. From 2010 to 2015, Guild grew
from its western base into the Southeast and Southwest, increasing its
number of branches and satellites from 75 to more than 230. Loan volume
in the same period jumped from $4.1 billion to $13.8 billion. Servicing
volume more than tripled, from $6.4 billion to $22.3 billion.

Chad Overhauser, president of AmeriPro Home Loans, said that his company
has grown because of its strong corporate culture that focuses on
delivering an exceptional experience to every customer and employee.
Overhauser started his mortgage banking career in 2002 and formed
AmeriPro in 2003. Since then, the company has grown from one branch and
three employees to 29 branches with more than 250 employees. He will
become a regional vice president at Guild, leading the AmeriPro branches.

“We’ve admired Guild’s growth from afar over the past couple of years,”
Overhauser said. “Both companies have an entrepreneurial spirit and
dedication to providing the highest levels of customer service. Guild
adds more than 50 years of experience in the industry, plus new
resources and products to benefit every homebuyer we serve.”

“AmeriPro and Guild together will be stronger in every way than each
company is today,” said Mary Ann McGarry, Guild’s president and CEO.
“AmeriPro is recognized throughout the region for the quality of its
customer service and empowering the individual. Guild brings technology
in support of sales, custom-built systems, tools, products, a servicing
portfolio, a strong balance sheet, an entrepreneurial and team-oriented
approach and management strength with a group of owner managers
committed to continuing success.”

“Guild shares AmeriPro’s focus on its people, its business practices,
values, and competitive energy,” McGarry said. “AmeriPro provides Guild
with market leadership in the state of Texas. This is an important step
in our growth plan.”

Guild offers a wide range of residential mortgage products, with
in-house underwriting and funding, which provide consistency and speed
throughout the loan process. Its loan professionals can serve the needs
of any homebuyer, from helping first-time homebuyers achieve their
dreams of home ownership, often through government loan programs, to
providing jumbo home loans through its relationship with Mutual of Omaha
Bank. Guild also specializes in helping active duty and retired military
personnel to secure VA loans, which provide 100 percent financing and
flexible qualifying standards.

About Guild Mortgage

Guild
Mortgage Co. was founded in 1960 as a home financing company for
American Housing Guild in San Diego, California. Guild broadened its
range of services in 1972 by including resale mortgage financing. After
decades of successful innovation and growth, Guild Mortgage Co. is now a
nationally recognized mortgage banking company with 234 branch and
satellite offices in 25 states. It generated loan volume of $13.8
billion in 2015, up 86.1 percent from $7.4 billion in 2014. Its
servicing volume reached $22.3 billion in 2015, up 34 percent from $16.6
billion in 2014. In addition, Guild has correspondent banking
relationships with credit unions and community banks in 47
states. (Equal Housing Lender- Company NMLS #3274).

Use Your 100% VA Loan Benefit As Many Times As You Want

Use Your 100% VA Loan Benefit As Many Times As You Want

Most VA Loan Applicants Are Not First-Time Buyers

If you thought VA loans are available only for first-time home buyers, you’re not alone.

Many active military personnel and veterans assume this zero-down program is a one-time “use it and lose it” benefit.

Fortunately, that’s not the case.

In fact, 58 percent of VA loan recipients in 2015 were previous home buyers, according to the US Department of Veterans Affairs (VA), up from 51 percent in 2011.

That means, historically, the majority of VA loan applicants are not buying their first home.

VA mortgage rates today have made these loans the first choice for veterans and service persons who are relocating, downsizing, or getting into a bigger home. VA rates run about a quarter of one percent lower than conventional loan rates, according to a recent study by loan software company Ellie Mae.

If you want to purchase a new property, a VA mortgage can be the right choice. It’s not difficult, and millions of home buyers have already done it.

Click to see todays rates (Jun 30th, 2016)
Simple VA Loan Eligibility Explainer

The first step in getting another VA mortgage loan is learning about VA loan eligibility.

Eligible borrowers receive a VA loan entitlement, typically $36,000. This is the amount by which the VA insures your loan.

The VA does not make the downpayment. Rather, it stands as a backstop so that lenders can issue loans at better terms, as if the applicant were actually making a downpayment.

Financial institutions will loan four times the entitlement amount, so you can buy a house costing up to $144,000 with no money down.

Nationwide, the standard VA loan limit is $417,000 and much higher in some areas. One hundred percent financing is available for those higher loans within local limits, too.

But if you go lower than $144,000, a portion of your entitlement will be left over. This sometimes makes it possible to simultaneously rent your current home and purchase another one. Active military personnel often do this after buying a house in one location and receiving PCS orders for another area.

You can also use the remaining entitlement to buy income-generating property of up to four units, as long as you occupy one of the units.

Buying a second home or vacation home with remaining entitlement is not permitted. You or your spouse must certify that you will occupy the property as your primary home.

Now here’s where it gets interesting.

If you use all of your entitlement to purchase a property, you don’t automatically get a second (or a third or fourth) entitlement. But, the moment you dispose of the property or pay off the mortgage, you can apply to have the full entitlement restored.

Click to see todays rates (Jun 30th, 2016)
VA Loan Entitlement Restoration

You can use your VA loan benefit more than once. Much more than once, in fact.

Veterans and active duty personnel, as well as members of the Selected Reserves are eligible for another loan, at the same low VA loan rates enjoyed by first-time home buyers.

The following guidelines apply depending on whether you are keeping or selling your current home.

Restoration when you keep your current home

You can pay off the VA mortgage either with cash, or with a non-VA loan, and keep the home. In this case, you can have your entitlement restored to buy another property while continuing to own the first one. You can apply to have the entitlement restored one time only.

Restoration when you sell your current home

If you’ve paid off the previous mortgage and you no longer own that property, you can have your entitlement restored as many times as you want. In other words, you can keep changing homes, as long as you are selling and paying of the former VA loans in full each time.

Again, getting your entitlement restored doesn’t happen automatically. You’ll need to complete VA Form 26-1880. Check with the nearest VA office to obtain this form and to learn when, how and what you can buy using any remaining entitlement.

Theres No Expiration Date For Your Entitlement

In general, the above entitlement guidelines apply to all active-duty personnel, but once you’re discharged or released from active duty, a new determination of your eligibility must be made based on the type of discharge you received and your length of service.

This does not mean, however, that veterans’ home loan entitlements expire. They don’t.
Veteran or active duty, everyone is required to obtain a Certificate of Eligibility (COE) before applying for a VA loan. VA Form 26-1880 is used for this. Lenders can request your COE, and often receive it within minutes.

If you’re a veteran, you’ll also need to fill out Form DD-214, which is the Certificate of Release or Discharge from Active Duty. This shows the character of your service.

In addition to this information, you’ll provide some documentation regarding your credit score, financial status, and employment history.

Many eligible home buyers don’t know about VA loan benefits, or they mistakenly think that conventional loans are superior. In fact, VA loans usually carry lower interest rates than conventional mortgages, don’t require private mortgage insurance, and don’t include early repayment penalties, among their other advantages.

Get all the facts before committing to a particular mortgage loan, but for most eligible service members and veterans, the VA home loan will pencil out to be the fastest and cheapest way to own a home.

What Are Today’s VA Loan Rates?

According to recent data by mortgage agency Freddie Mac, conventional loan rates have hit the mid 3s. Another report showed that VA loan rates are around 0.25% below conventional rates.

Get instant access to your VA rate quote now. All quotes come with an eligibility check and access to your live credit scores.

Click to see todays rates (Jun 30th, 2016)

Military vs. civilian home-buying trends

Heres proof that young military homebuyers are putting down family stakes: Their share of the under-35 demographic is outpacing civilians, and significantly so.

In its first-of-a-kind survey, the National Association of Realtors (NAR) pointed out that young active-service buyers (ages 18-35) bought homes at a far greater rate (51%) than non-military buyers (34%), PleasantonWeekly.com reported.

There also was a contrast regarding foreclosure rates: Current data shows that VA loans perform remarkably well and are a safe and affordable choice. Their current seriously delinquent and homes in foreclosure rate is 2.78% versus 3.44% for non-VA loans, according to NAR chief economist Lawrence Yun.

Federal Reserve Throws Weight Behind Low Mortgage Rates, Wants More Inflation

Federal Reserve Throws Weight Behind Low Mortgage Rates, Wants More Inflation

Mortgage Rates Falling After FOMC Meeting

The Federal Reserve did not raise the Fed Funds Rate at its June 2016 meeting.

After adjourning from a 2-day meeting, the nations central banker voted to hold the Fed Funds Rate in a target range near 1/4 percent.

The vote was unanimous at 10-0.

In its post-meeting press statement, the Federal Reserve said that the U.S economy appears to have picked up since the group last met in April despite new drag from the labor market.

The group also noted that inflation rates have continued to run below the Feds target range of two percent over the long-term.

At the start of the year, the FOMC was expected to raise the Fed Funds Rate four times in 2016. Now, its doubtful that the group will vote to raise the benchmark rate even once.

The Feds change of plans has surprised Wall Street this year, and mortgage markets have responded favorably.

Mortgage rates are lower since the FOMC adjourned.

Click to see todays rates (Jun 28th, 2016)
Fed Funds Rate: On-Hold At 0.25%

Wednesday, the Federal Open Market Committee (FOMC) voted to hold the Fed Funds Rate in its target range near 0.25 percent.

The Fed is data-dependent, it reminded markets. The groups future moves will depend on the strength of labor markets, and on the pace of inflation within the economy.

The Feds job is to balance those two forces.

Currently, labor markets are sagging. After adding than 13 million jobs since 2010, job growth was its lowest in three years last months; and, may not improve through the rest of 2016.

Job growth has not ignited inflationary forces, either. This poses a policy challenge for the Fed.

Inflation is the devaluation of a currency and the Fed aims for a two percent inflation rate per year. Currently, inflation is running closer to 1.5% and thats near where its been for the better part of this decade.

When inflation stays too low for too long, it can lead to deflation, which can be more damaging to an economy than inflation.

The Fed used its statement to identify deflationary threats within the economy — namely, falling energy and commodity costs. The group believes those forces will subside, but maybe not soon enough.

The Fed statement included the following (emphasis added):

In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

In plain English, this says that the Fed wants to raise the Fed Funds Rate in the future, but because inflation rates are running too low for comfort, the group may have to keep its benchmark rate low as well.

Not until inflation rates return toward two percent per year will the Fed feel totally comfortable raising the Fed Funds Rate away from its current range.

Note that monetary policy can take a long while to work its way through the economy — sometimes three quarters or more. The December 2015 change to the Fed Funds Rate, then, wont be fully felt by businesses and consumers until sometime in late-2016.

The Fed is planning ahead.

Click to see todays rates (Jun 28th, 2016)
Mortgage Rates Edging Lower

A little bit over a year ago, after the groups October 2014 meeting, Federal Reserve announced the end of its third round of quantitative easing, a program known as QE3.

QE3 had been running for over two years.

Via QE3, the Federal Reserve purchased $85 billion in long-term bonds monthly, which included a hefty amount of mortgage-backed securities (MBS).

In buying mortgage-backed securities, the Fed boosted aggregate demand which, in turn, caused MBS prices to rise; and, when MBS prices rise, current mortgage rates fall.

The start of QE3 heralded an era of unprecedented low rates and sparked a refinance boom nationwide. HARP 2 loans surged as homeowners flocked to the various streamline refinance programs.

Home purchase activity increased, too.

Today, in many markets, and in large part because of QE3, home values have recovered all of the value lost during last decades downturn and they continue to make strong gains.

Since QE3 ended in 2014, though, current mortgage rates have been slow to rise. This is because the Federal Reserve continues to reinvest in mortgage-backed bonds.

In its June 2016 statement, the Fed said it will continue to support low mortgage rates via re-investment.

The Committee is … reinvesting principal payments from its holdings of … mortgage-backed securities … and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy … should help maintain accommodative financial conditions.

The Fed will keep buying MBS, in other words, helping to keep mortgage rates suppressed for all government-backed loan types.

This includes conventional loans backed by Fannie Mae and Freddie Mac; FHA loans insured by the Federal Housing Administration; and VA loans and USDA loans guaranteed by the Department of Veterans Affairs and US Department of Agriculture, respectively.

Mortgage rates are lower after the June 2016 FOMC Meeting.

What Are Todays Mortgage Rates?

Mortgage rates remain cheap and the Federal Reserve appears intent on helping them stay that way. Markets often change without notice, however. Lock a loan while rates are still low.

Get todays live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.

Click to see todays rates (Jun 28th, 2016)

PE-backed Guild Mortgage to acquire AmeriPro Home Loans

Guild Mortgage Co, which is backed by McCarthy Capital, has agreed to buy Austin, Texas-based mortgage lender AmeriPro Home Loans. The seller is Tenura Holdings Inc. No financial terms were disclosed.

PRESS RELEASE

SAN DIEGO(BUSINESS WIRE)Guild Mortgage Co. has reached an agreement to acquire AmeriPro Home Loans based in Austin, Texas, with 29 branches and $750 million in loan volume in 2015. The transaction is expected to close July 1 and will make Guild one of the largest independent mortgage banking companies in Texas.

The acquisition will also add new Guild branches in Oklahoma, Florida, Colorado, California and Utah. AmeriPro was founded in 2003 and has become recognized as a leading residential lender in the Southwest. Since 2008, it has been a subsidiary of Tenura Holdings, Inc., an Austin-based investor in realty, title and insurance companies.

The acquisition is the newest step in Guild’s long range plan to grow through acquisition, adding branches in new and existing markets, and preserving its customer service culture with experienced, talented loan officers with established relationships. From 2010 to 2015, Guild grew from its western base into the Southeast and Southwest, increasing its number of branches and satellites from 75 to more than 230. Loan volume in the same period jumped from $4.1 billion to $13.8 billion. Servicing volume more than tripled, from $6.4 billion to $22.3 billion.

Chad Overhauser, president of AmeriPro Home Loans, said that his company has grown because of its strong corporate culture that focuses on delivering an exceptional experience to every customer and employee.

Overhauser started his mortgage banking career in 2002 and formed AmeriPro in 2003. Since then, the company has grown from one branch and three employees to 29 branches with more than 250 employees. He will become a regional vice president at Guild, leading the AmeriPro branches.

“We’ve admired Guild’s growth from afar over the past couple of years,” Overhauser said. “Both companies have an entrepreneurial spirit and dedication to providing the highest levels of customer service. Guild adds more than 50 years of experience in the industry, plus new resources and products to benefit every homebuyer we serve.”

“AmeriPro and Guild together will be stronger in every way than each company is today,” said Mary Ann McGarry, Guild’s president and CEO. “AmeriPro is recognized throughout the region for the quality of its customer service and empowering the individual. Guild brings technology in support of sales, custom-built systems, tools, products, a servicing portfolio, a strong balance sheet, an entrepreneurial and team-oriented approach and management strength with a group of owner managers committed to continuing success.”

“Guild shares AmeriPro’s focus on its people, its business practices, values, and competitive energy,” McGarry said. “AmeriPro provides Guild with market leadership in the state of Texas. This is an important step in our growth plan.”

Guild offers a wide range of residential mortgage products, with in-house underwriting and funding, which provide consistency and speed throughout the loan process. Its loan professionals can serve the needs of any homebuyer, from helping first-time homebuyers achieve their dreams of home ownership, often through government loan programs, to providing jumbo home loans through its relationship with Mutual of Omaha Bank. Guild also specializes in helping active duty and retired military personnel to secure VA loans, which provide 100 percent financing and flexible qualifying standards.

About Guild Mortgage
Guild Mortgage Co. was founded in 1960 as a home financing company for American Housing Guild in San Diego, California. Guild broadened its range of services in 1972 by including resale mortgage financing. After decades of successful innovation and growth, Guild Mortgage Co. is now a nationally recognized mortgage banking company with 234 branch and satellite offices in 25 states. It generated loan volume of $13.8 billion in 2015, up 86.1 percent from $7.4 billion in 2014. Its servicing volume reached $22.3 billion in 2015, up 34 percent from $16.6 billion in 2014. In addition, Guild has correspondent banking relationships with credit unions and community banks in 47 states. (Equal Housing Lender- Company NMLS #3274).

Few Financing Advantages For Net Zero Homes | Bankrate.com

Builders of energy-efficient homes usually supply appraisers with a list of the cost and benefits of green features and will educate appraisers about the homes so they understand the added value, says Michael Johnston, vice president and branch manager of Howard Bank in Timonium, Maryland.

Adomatis says that net zero homes are not always marketed in the multiple listing service (MLS) as energy-efficient homes, making them harder to find for appraisers.

We did a study of high-performance homes in Washington, DC, that we released last year that found that those homes were valued 2% to 5% higher than standard homes, but we were limited by the small number of homes that were actually listed as high performance homes, Adomatis says.

A higher appraisal could help borrowers by reducing their loan-to-value ratio, which could mean a lower interest rate or even the elimination of private mortgage insurance, which is required on loans with a down payment of less than 20%.

RATE SEARCH: Comparison shop for a VA loan today.

Loans for energy-efficient homes

Some community banks and individual lenders who are aware of the potential savings of net zero homes take that into consideration when looking at the debt-to-income ratio of borrowers. In addition, borrowers can ask whether an Energy Efficient Mortgage (EEM), available as conventional, FHA or VA loans, can be used to finance the home.

Selling Home Builders on Reverse Mortgages, One H4P at a Time

Call a HECM for Purchase (H4P) a “sleeping giant,” a vastly underutilized product–call it whatever you like. One full-service mortgage banker, however, is calling H4P the bulk of its reverse mortgage business.

An estimated 90% of the reverse mortgage business for Concord Mortgage Group is H4P, according to David Weinstein, senior loan officer and manager of the reverse mortgage division at Concord Mortgage Group, a Division of NOIC, Inc., a full-service mortgage banker in Westerville, Ohio.

Weinstein started the reverse mortgage division at Concord about 4-5 years ago, when the company began offering the product. Today, the lender currently offers HECMs to clients in eight states and Weinstein estimates that Concord originates roughly 75-100 H4P loans annually.

“Concord is, for the most part, a purchase shop,” Weinstein told RMD. “My domain focus is really on HECM for Purchase and my emphasis is continuing to educate the real estate community, builders and agents in the benefits of the H4P.”

A 26-year veteran of the mortgage industry, Weinstein has previously specialized in new construction lending for the last 15 years. It is this experience that allows him to approach reverse mortgage sales from a more holistic approach, especially when it comes to establishing relationships with regional homebuilders.

Most of the deals Weinstein works on involve new home construction. In fact, some of Concord’s homebuilder partners primarily build communities for buyers age 55 and older.

“By saying we’re going to focus on the product, meaning the house–that gets some doors open for us,” Weinstein said. “When we talk about how H4P can increase sales, that becomes a benefit because builders want to sell homes.”

Concord Mortgage Group offers a variety of different loan programs, including reverse mortgages, conventional loans, VA loans, Federal Housing Administration loans, conventional loans and jumbo products.

On the reverse side of the business, Weinstein has been primarily working with Epcon Communities, a Dublin, Ohio-based builder specializing in the age 55-plus market with properties across 19 states.

In efforts to best serve its customers, each Epcon Builder Partner selects locally preferred lenders that provide the most honest, viable and competitive financial solutions available. With the help of these partners, Epcon customers are equipped to choose financing options that best suit their needs, such as conventional mortgages, FHA/VA and HECM loans.

Weinstein has been working with Epcon for at least eight years now, almost as long as he has been living in Columbus, Ohio.

“Since their demographic has been primarily that Boomer client, through necessity we’ve been able to offer the H4P, which they have used for an unbelievable success,” Weinstein said.

When working with homebuilders, Weinstein explains to them the various positive reasons for why someone would get a reverse mortgage. He emphasizes that the H4P product allows the homebuyer to save their cash by requiring them to put down only a fraction of the home’s purchase price as a down payment, while also eliminating their monthly mortgage payment.

Since the inception of the H4P in 2009, endorsement volume for the product has yet to eclipse 4% of total HECM volume in any given fiscal year, according to HUD data. In Fiscal Year 2015, H4P represented just 3.94% of overall HECM endorsement volume, but this share has been progressively increasing every year since the product’s inception, when it accounted for only 0.48% of overall volume.

Despite this miniscule penetration rate, there are some originators across the country who have been successful in making H4P their sole focus. The keys to their success have been largely due to relationships established with home builders, real estate agents, financial planners, among other financial services professionals working with retirees and Baby Boomers.

For reverse mortgage originators looking to establish relationships with homebuilders in their areas, Weinstein suggests that when reaching out to contact builders, reinforce the benefit that H4P has not only for buyers but for builders as well.

“It [H4P] maintains values in communities because now there are no short sales; it allows buyers to add more options in the home because they are now paying 35-50 cents on the dollar; and it allows people who usually wouldn’t qualify for a loan to now get a loan to help generate sales in that market,” Weinstein said. “Those are among the three big things that I emphasize when I reach out to homebuilders, if nothing else.”

Written by Jason Oliva

5 Mortgages That Require Little or No Money Down

The Federal Housing Administration, or FHA, insures loans with small down payments, and private mortgage insurers have relaxed their down-payment requirements. Its even possible to get a mortgage today with no money down. The nations biggest credit union offers zero-down mortgages. The Department of Veterans Affairs, or VA, and the Department of Agriculture, or USDA, guarantee home loans with no down payments.

Following are a few options for borrowers seeking low-down-payment and zero-down-payment home mortgages.

RATE SEARCH: Find a low-down-payment mortgage today.

No down payment: VA loan

The VA guarantees purchase mortgages with no required down paymentfor qualified veterans, active-duty service members and certain members of the National Guard and Reserves. Private lenders originate VA loans, which the VA guarantees. There is no mortgage insurance. The borrower pays a funding fee, which can be rolled into the loan amount.

Report: Downpayment Is Not A Barrier For Military Home Buyers

Report: Downpayment Is Not A Barrier For Military Home Buyers

Veterans Are Not Worried About Making A Downpayment

The VA home loan has assisted military home buyers for more than 70 years.

Theres due cause for its longevity. Of all types of home mortgage choices, VA loans are unique.

This type of financing offers a nearly unbeatable combination of low interest rates, freedom from mortgage insurance, and easier qualification.

But the most valuable benefit of a VA loan, arguably, is that the home buyer is eligible for 100% financing. No downpayment is required.

According to a recent study by the National Association of REALTORS® (NAR), 13% of non-VA home buyers said saving for a downpayment was the hardest part of buying a home.

The same study revealed that only 5% of veterans and 3% of active-duty service members cited downpayment as a barrier.

And for good reason. This loan eliminates perhaps the biggest hindrance to homeownership: coming up with enough cash to put down on a home.

Click to see todays rates (Jun 21st, 2016)
The Value Of 100% Financing

Late last decade, it was possible for a borrower to choose from a number of zero-down loan programs.

Even traditionally-conservative Fannie Mae offered 100% loans. There was also the 80-20 option, in which the 20% downpayment was financed by a second mortgage.

These and other programs were useful tools to new home buyers, but lenders discontinued many zero-down programs during the housing downturn.

One program that did not go away, however, is the zero-down VA mortgage. In todays credit environment the VA loan stands almost alone for its lack of a downpayment requirement.

Federal Housing Administration and conventional mortgage loans require borrowers to put up anywhere from three to 20 percent of the purchase price as a downpayment. This can add tens of thousands of dollars to the cash required to purchase a home.

Only one other commonly used loan program, the US Department of Agriculture Rural Development Guaranteed Housing Loan, offers no-money-down mortgages. USDA loans, also called Section 502 loans, are available in most but not all areas of the country.

VA loans, on the other hand, are not restricted to any geographical location.

A downpayment continues to be a barrier to most would-be homeowners. But for those with eligible military experience, it doesn’t have to be.

Click to see todays rates (Jun 21st, 2016)
VA Home Loans: Zero Down And No Mortgage Insurance

Almost every other loan that requires less than 20% down also requires mortgage insurance.

The zero-down USDA loan requires a monthly fee of about $42 for every $100,000 in loan amount.

FHA mortgage insurance is required with any loan issued through the Federal Housing Administration, the provider of this popular 3.5% downpayment program.

Mortgage insurance from FHA can add a significant amount to the monthly payment. A $250,000 FHA home purchase requires a $170-per-month mortgage insurance fee.

A VA home buyer can get into a bigger home for the same amount of money.

At the above purchase price, and an interest rate of 4%, a veteran can increase his or her purchase price by $35,000 and pay the same per month as the FHA buyer.

88% Of VA Buyers Make No Downpayment

The appeal of zero downpayment shows up strongly when you look at how many veterans buy homes without any downpayment.

The VA says nearly 9 out of 10 VA loan program participants put no money down on their home purchase.

Those who do may be purchasing a home above a $417,000 purchase price, or up to $625,500 in higher-cost areas.

VA loan applicants can borrow larger amounts if they make a small downpayment. A 25% downpayment is required, but only on the portion of the loan that is above the local VA limit.

For example, a home costs $517,000 in an area where the standard VA limit applies. This exceeds the limit by one hundred thousand dollars. The VA applicant would make a downpayment of $25,000.

VA loans offer the flexibility of either putting no money down, or opting for a downpayment to purchase a more expensive home.

Click to see todays rates (Jun 21st, 2016)
VA Lenders Are Lenient On Debt-To-Income

Buyers who use FHA and conventional mortgages may also need to make a downpayment in order to reduce the monthly mortgage payment. Thats because FHA and conventional lenders require borrowers to maintain a certain ratio of debt to income.

VA also has debt-to-income guidelines, but they are looser than other loan programs. So borrowers are less likely to have to make a downpayment to bring down the debt-to-income ratio.

Conventional loan standards state that a borrower’s total debt payments, including auto loans, student loans, and credit card payments, plus the future house payment, must not be more than 43% of his or her gross income.

VA loans, however, allow the borrower’s debt ratio to rise above 45% — often up to 50% — and still receive an approval.

This is yet another way VA borrowers can more easily purchase a home without making a down payment.

The VA loan programs zero-downpayment feature makes this one of the most attractive financing options available for qualified veteran homebuyers.

Even if it didnt have a zero-downpayment feature, the VA loan program would be an attractive option. Below-market interest rates, willingness to consider lower credit scores, and no mortgage insurance make an appealing combination, to say the least.

When no downpayment is added to the mix, anyone borrower who feels he or she could be an eligible veteran is well-advised to check it out.

What Are Today’s Rates?

VA mortgage rates are some of the lowest of any loan type. And, rates are hitting new lows.

Get a live VA rate quote. No documentation is needed to get started, and all quotes come with instant access to your credit score.

Click to see todays rates (Jun 21st, 2016)