VA Financing! Key Questions Answered & Explained

Why VA Loans Are So Competitive

We want to answer some common questions regarding VA loans to help our agents negotiate and close more VA purchases.

VA loans represent one of the most competitive financing options available with respect to interest rates, fees, and down payment options.

In addition, VA loans are also more lenient than conventional and FHA financing in many regards. They are so competitive, in fact, that they are one of the greatest benefits of being a Veteran.

Who Pays What?

The VA does not allow veterans to pay for:
• Attorney Fee – if required
• Escrow Fee/Settlement Fee/Closing Fee
• Closing Protection Letter
• Document Preparation Fee
• Underwriting Fee/Processing Fee
• Lock-in Fees
• Courier Fee/Postage Fees
• Notary Fees
• Application Fee
• Tax Service Fee
• Mortgage Broker Fee

These fees amount to roughly $3,000 on average, but can vary.

So, how are “unallowable” fees paid for?

We actually offer a lender credit for VA loans to cover these fees. Sellers can cover unallowable fees as well, but in competitive markets, we’ve found that offers are much stronger when lenders handle them.

Minimum Down Payment Requirements

No down payment (0% down) is required in most cases, depending on debt-to-income ratios and eligibility.

Here are a few exceptions:

1. Loan Above County Loan Limit:
   If the loan is above the county limit (for example, Alameda County’s limit is $679,650), the Veteran must put down 25% of the difference between the purchase price and the limit.

   • Example: $1,000,000 – $679,650 = $320,350 x 0.25 = $80,087.50 down.

2. Non-Spouse Co-Borrower:
   If a non-spouse (e.g., boyfriend or girlfriend) is on the loan, a minimum 12.5% down payment is required.

Is There Mortgage Insurance?

No. VA loans require no mortgage insurance, regardless of down payment — a major advantage that keeps monthly payments low.

What Is the VA Funding Fee?

The VA Funding Fee supports the VA guarantee program and typically equals 2.15% of the loan amount.
This varies based on service history, down payment, and loan type. The fee can be financed into the loan.

Termite and Section 1 Repairs

Termite and Section 1 repairs must be paid by the seller before close of escrow, and a clean pest report is required to close a VA loan. Buyers can pay for repairs if they are handled outside of escrow.

How Fast Can We Close a VA Loan?

We can close VA loans in as little as 23 days, keeping them competitive against conventional and FHA offers.

With an in-house VA underwriter, JVM can expedite approvals and keep transactions on track.

Final Note

Our Mortgage Analysts are well-versed in VA financing and always ready to help.
Please don’t hesitate to give our team a call or send an email with any VA-related questions.