The Department of Veterans Affairs provides numerous home financing options to the VA loan program. There are a variety of different types of VA loans that offer different benefits to homebuyers. Here are some of the most popular types of VA loans available today:
VA Purchase Loans – These are the most standard loan options guaranteed through the Department of Veterans Affairs. With VA Purchase loans, veterans and active duty service members can purchase new or existing homes without needing to make a down payment. A VA purchase loan can be used to pay for single-family homes, condominiums, manufactured homes, multi unit properties, or the construction of a new home.
The specific requirements and guidelines for VA purchase loans can vary depending on the private lender. Furthermore, not all lenders are qualified to generate VA loans.
VA Interest Rate Reduction Refinance Loans (IRRRL) – The VA IRRRL program is one of the most popular amongst veteran homeowners who are looking to refinance their current mortgage. These types of loans are sometimes referred to as VA Streamlines because they are a simple and affordable option for refinancing a mortgage. In some cases, they can even be completed without requiring credit underwriting, income verification, or an appraisal.
VA Interest Rate Reduction Refinance Loans are only available for veterans who already have a VA loan but require a more affordable rate. They also have a time limit on how long it takes to recoup the costs and fees. This will allow Veterans to receive the full financial benefits of the program.
VA Cash-Out Refinance – VA Cash-Out Refinance loans are available to veterans with or without current VA loans. These loans will allow qualified homeowners to refinance their current mortgage and take out cash based on the equity they have on their home. Typically, homeowners who qualify for a VA Cash-Out Refinance loan can refinance up to 90 percent of their home’s total value.
The lending requirements and debt-to-income ratio guidelines can differ depending on the private lender. Additionally, homeowners are not required to take out cash with these loans. This gives Veterans with non-VA home loans the option to get a basic rate-and-term refinance through this type of loan.
VA Energy Efficient Mortgage – Veterans who are looking to make energy efficiency improvements to their home can borrow additional money with a VA Energy Efficient Mortgage. This can be done as a part of either an initial home purchase or a mortgage refinance. Veterans may be eligible to finance up to an additional $6,000 to cover qualified energy efficiency improvements.