VA Loan Underwriting Guidelines for New VA Loan Home Purchase
No down payment is required by VA unless the purchase price exceeds the reasonable value of the property. The VA Loan lender may require a down payment if necessary to meet secondary market requirements if the home is being purchased above the value given by the VA Loan Appraiser.
The veteran must certify that he or she intends to personally occupy the property as his or her home.
Interest rate and points are negotiated between the VA approved VA Loan Lender and veteran.
- ·The veteran and seller may negotiate for the seller to pay all or some of the points.
- ·Points must be reasonable and must be approved by the Veterans Administration.
Points may not be financed in the loan except with Interest Rate Reduction Refinancing Loans (IRRRLs).
Flexible VA Loan standards.The veteran must have:
- Satisfactory credit, and
- Satisfactory repayment ability
- Stable income
- Residual income (net effective income minus monthly shelter expense) in accordance with regional tables, and
- Acceptable ratio of total monthly debt payments to gross monthly income (A ratio in excess of 41% requires closer scrutiny and compensating factors.).