Among the loans home buyer's have in their arsenal is still the Veteran's loan for eligible borrowers who've served in the military. This government loan still offers a lot of benefits, including the option of 100% financing. Many of the closing costs for these loans are also paid for by the seller, as long as these costs don't exceed 4% of the sales price of the home. Although seller concessions are capped at 4%, the seller can pay off a veteran's judgements and liens.

History of a VA Loan

VA loans are guaranteed by the U.S. Department of Veterans Affairs (VA). In 1944 VA loans were originally known as the Servicemen's Readjustment Act or (the GI Bill of Rights). The zero down payment was designed to help provide home ownership assistance to the millions of veterans and their families. VA loans can also be used to refinance a home for up to 90% of the home's reasonable value, where allowed by state laws.

Qualifying for a VA loan

In this market, a 620 fico is needed (middle of 3 ficos) by lenders. Most lenders want to see a 41% debt-to-income ratio, also. In some cases, lenders will go higher, with a "manual" underwriting system.

Although no down-payment is required, money down would lower the loan amount, and monthly payment. As with any loan, the loan "package" is further enhanced by higher fico scores, a significant down-payment, and a low debt-to-income ratio.

Benefits of a VA loan

* No Private mortgage insurance requirement