Other benefits of using VA's program (Other than the 100% financing of the sales price) include:

• Loans are assumable, provided the person assuming the loan is qualified.
• Veterans' closing costs are limited by VA.
• Additional assistance is offered by VA should veterans have problems making their home loan payments in the future.
• Prepayment of the loan without a penalty.

Here are some quick facts you may find useful concerning purchase transactions:

• VA does not have a maximum loan amount.  However, lenders do sell loans on the secondary mortgage market, so they will generally limit loans to $417,000 ($625,500 in Hawaii, Guam, Alaska and U.S. Virgin Islands) with no down payment.  With a down payment, loans may exceed these amounts.
• The veteran does have to qualify income and credit wise.
• The veteran does have to occupy the home as their primary residence.
• The veteran does not have to be a first time home buyer and may reuse his/her benefit.
• The lender, not VA, sets the interest rate and discount points, so they may vary from lender to lender.
• There is no private mortgage insurance, but VA does charge an upfront VA funding fee, which may be financed.  The exception to this is that if a veteran is in receipt of VA service connect disability payments each month, he or she does not have to pay a VA funding fee.
• The seller can pay for closing costs.  There is a requirement that seller concessions do not exceed 4%, but only certain items are considered as part of the concession; i.e., payment of pre-paids, VA funding fee, payoff of credit balances or judgments on behalf of the veteran, funds for temporary buy downs (not discount points).
• The veteran is not allowed to pay for the wood destroying insect (termite) report; it is generally paid by the seller.
• VA does not approve the majority of loans.  The majority of transactions are handled directly by the lender with little VA intervention.

Steps in the Process of a VA Home Loan: There are five basic steps when obtaining a VA backed home loan.  Although there are lots of details within each step and some may overlap, here is a basic overview of how the process works. 1.    The veteran selects a home they are interested in.  The purchase and sales agreement should contain a VA option clause.  Sample wording for a VA option clause: "It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise of be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs.  The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs." The contract must also allow the veteran to "escape" from the contract without penalty if he/she is unable to obtain a VA loan.  Some veterans prefer to contact a lender to get "pre-qualified" (see how much they can afford) prior to searching for a home.  Veterans may also apply for a certificate of eligibility prior to looking for a home or contacting a lender.  Please review our site for information on certificates of eligibility and a listing of lenders. 2.    Contact a lender to apply for the loan.  At this point, if the veteran has not already obtained his/her certificate of eligibility, they will need to.  The lender may be able to obtain it off the internet or the veteran may have to complete a form and send it to the appropriate eligibility center.  In either case the lender will be able to assist in the procedures of how to obtain a certificate of eligibility.  The lender will complete a loan application and gather supporting documentation, i.e., paystubs and bank statements.  An important item for veterans to know is that lenders set their own interest rates, discount points and closing points. 3.    The lender will "process" (develop) all credit and income information.  Lenders are allowed to use VA approved automated underwriting systems.  The lender will also order a VA appraisal.  VA's appraisal is not a home inspection or a guaranty of value.  It is an estimate of the market value as of the date the inspection is made comparing it to similar homes that have recently sold in that area.  Although the appraiser does look for obviously needed repairs, VA does request that appraisers not address cosmetic items.  VA does not warrant the condition of existing homes.  The appraiser is a licensed individual who does not work for VA but is chosen by VA to assure his/her review is unbiased in any way.  The lender cannot request which appraiser to use, they are assigned on a rotation basis. 4.    Upon receipt of the appraisal and all supporting documentation on credit, income and assets, the lender will "underwrite" the loan.  It is the lender who reviews all the data collected and decides if the loan should be granted, developed for additional data or if the veteran does not qualify and must be denied.  Although VA does "underwrite" some loans, it is very rare.  The decision on whether or not to approve the loan is generally made by the lender. 5.    The final step for loans that meet VA regulations and guidelines is the loan "closing" (when the transfer actually takes place).  The lender chooses the title company, attorney or if their representative will conduct the closing.  The title company, attorney or lender representative who will handle the closing will coordinate the date and time.  If there are any questions during the process that the lender cannot assist the borrower with, please contact a VA representative.

FEDERAL HOUSING ADMINISTRATION LOANS

This loan is insured by the Federal Housing Administration. It is open to all qualified home purchasers.

FHA Products

FHA Loans - Buying a Home using a FHA Loan
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The FHA loan program was created to help increase homeownership. The  FHA program makes buying a home easier and less expensive than other types of real estate mortgage home loan programs. Some highlights of the FHA loan program are:

• Minimal Down Payment and Closing Costs.

• Downpayment less than 3% of Sales Price
• 100% Financing options available*
• Gift for downpayment and closing costs allowed.
• No reserves or required.
• FHA regulated closing costs.
• Seller can credit up to 6% of sales price towards buyers costs.

• Easier Credit Qualifying Guidelines such as:

• No minimum FICO score or credit score requirments.
• FHA will allow a home purchase two years after a Bankruptcy.
• FHA will allow a home purchase  three years after a Foreclosure. 

• Easier Debt Ratio & Job Requirement Guidelines such as:

• Higher Debt Ratio's than other home loan programs.
• Less than two years on the job is allowed.
• Self-Employed individuals o.k.

These advantages of the FHA loan program has made it one of the best options for most first time home buyers as well as move-up home buyers.

You do not have to be a first time buyer to obtain a FHA loan, anyone may use a FHA loan as long as you do not have more than one FHA insured loan at any one time.

Following is a list of some the various type of FHA loan programs available. Next to the name of the program is a brief description of the FHA mortgage program. Once you find a program that best suites your needs, please click on it for a detailed program description

• Single Family Home - Basic FHA loan program for single family homes.

• Units> Duplex  Triplex  Fourplex - Basic FHA loan program for multi family homes.

• Fixed Rate Loan - Basic FHA fixed rate mortgage loan program.

• Adjustable Loan (ARM) - Basic FHA adjustable rate mortgage loan program.

• Buydown FHA Loans   - Low Start Rate FHA buy-down loan program.

• HUD Homes - Financing for HUD homes with as little as $100 down.

• Officer Next Door - Special 50% discounted homes for officers.

• Teacher Next Door - Special 50% discounted homes for teachers.

• CHDAP - 100% financing option for first time buyers in California.

• Nehemiah - 100% financing option provided by Non-profit organization.

• HART - 100% financing option provided by Non-profit organization.

• CHFA Loans (CHAFA) - 100% financing option for first time buyers in California.

• Access 2000 - 102% financing option for first time buyers.

• 203K - Home improvement & major remodel loan program.

203(k) Loans: This loan allows home buyers to finance both the purchase and rehabilitation of a home through a single mortgage. The home must be at least one year old. The cost of rehabilitation must be at least $5000. All cost of repairs including total property value must be within FHA maximum mortgage limit.

Energy Efficient Mortgage: The Energy Efficient Mortgage (EEM) allows home buyers to save future income on utility bills. This can be done by financing energy-efficient features to a new or existing home as part of an FHA-insured home purchase. The cost of improvements be evaluated by a energy consultant or Home Energy Rating System. This cost would have to be less than the anticipated savings from the improvements.

Have any questions about what we offer? Click here to send us a question and one of our consultants will contact you.

Honolulu FHA and VA Home Loans - Apply Online

BENCHMARK LENDING, LLC can help you with your Honolulu FHA and Honolulu VA home loans. Honolulu FHA home loans can help Honolulu borrowers obtain a Honolulu mortgage more easily. Honolulu VA home loans can help Honolulu Veterans secure Honolulu home loans to purchase their dream home. Contact BENCHMARK LENDING, LLC for help with your Honolulu FHA and VA home loans.

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