What Is A VA Compromise Sale?

A VA compromise sale is designed to help veterans who have a VA mortgage and need to sell their home, but would end up taking a loss in the process.

This type of situation can occur for several reasons, which include: needing to move overseas from a station change, or a divorce.

In any case, if you bought a home with a VA loan back when the housing market was healthy, you probably did not foresee the need to sell your home in the lackluster housing market of today.

For many veteran borrowers who are facing this scenario, taking a loss on the sale of their home could result in extreme financial difficulty.

Luckily, you may be able to qualify for a VA compromise sale.

If you are selling your house and receive a bid for less than what you still owe on your VA loan, you can turn in an application with the VA for a compromise sale. In many ways it is similar to a short sale of a home with a conventional mortgage.

The good news is that if you receive approval for a VA compromise sale, then the VA will redeem you for the difference between what you can sell your house for and what you have left on your VA loan.

In order to begin the compromise sale process, you must show proof of:

  • Financial difficulties.
  • The realistic market value of your house at time of sale.
  • A VA appraisal.
  • Standard closing costs.
  • No second lien (the VA does makes rare exceptions if the total is not significant).
  • The reasons why you are selling your home.

Another important component of getting approved for a VA compromise sale is that the total net loss should be less than if the property was taken back by the bank through foreclosure proceedings. So basically, if it costs more to foreclose vs “short sale” the home, then there is a greater chance of getting a VA compromise sale approved.

On another note, if your VA loan originated before December 31, 1989 you might have to sign a promissory note as well as enter a payment plan to redeem the VA a percentage of the compromise claim payment. This sum would end up being less than what you would owe if you did not originally have a VA loan, and the payment plan itself is formulated around what you would reasonably be able to pay.

If you feel that you may be able to qualify for a VA compromise sale, don’t hesitate to contact us for further information.

What Is A VA Mortgage Loan Entitlement?

One of the main questions we receive in regards to VA loans is, “What is a VA mortgage loan entitlement?

If you’re wondering this, don’t worry; you’re definitely not alone!

Rather than acting as a lending agent itself, the Veterans Administration simply guarantees the home loans of veterans. This means that if the borrower defaults on the mortgage, the lender has an insurance policy with the VA for the entitlement amount.

Because they are protected against losses, VA lenders can offer more favorable terms on VA loans.

The VA is able to give a guaranty to applicants who fulfill the eligibility requirements, which include but are not limited to:

  • Having a good credit score, typically above 620.
  • Having enough income for monthly mortgage payments.
  • Not having a bankruptcy or foreclosure within the past 24 months.

For the majority of veteran borrowers, the standard entitlement for a VA loan is $36,000 for a loan equal to or less than $144,000.

However, if your loan amount is over $144,000, the Veterans Administration will offer a guaranty of up to 25% of your county limits.

County limits for VA loans vary greatly throughout different parts of the United States. You can determine what your limit is by looking at the list of specific VA county loan limits on va.gov.

It is important to note that the VA does not list every county. Counties that are not included in the official 2011 VA County Loan Limits website have a loan limit of $417,000.

After reading this you may be wondering to yourself, “Why does the Veterans Administration have different loan limits for different counties?”

The long and short of it is that housing markets across the United States vary greatly.

For example, the average price of a house in California is close to double the average price for a house in Ohio! It would never work to have a set one-size-fits-all limit for all 50 states.

Keep in mind that while the VA does not set a cap for how much veterans can borrow, some VA mortgage lenders may not approve loans above $417,000. This is because lenders usually sell bundles of VA loans in secondary markets, where – you guessed it – the maximum loan limit can be $417,000.

It’s important to note that VA loan entitlements have also gradually risen over time. Because of this, many veterans who have previously taken out a VA loan might actually be qualified for more money today than they were originally.

If you have taken out a VA loan in the past, you can contact us to quickly determine whether or not you are indeed eligible for some portion of your VA loan entitlement now.

This all ties into the fact that veterans are allowed to take out more than a single VA loan as long as they are not concurrent, and that you can also refinance with a VA loan!

In other words, if you took out a VA loan on the house that you are currently living in, but have decided to sell it and move, you can take out another VA loan for the house that you want to buy.

However, you cannot have two VA loans at the same time.

Is A VA Loan Better Than A Conventional Mortgage?

For eligible veteran and active duty military borrowers, a VA loan is often a better option than a conventional mortgage. This is due to the many distinct advantages offered by VA loans.

For starters, VA loans have fantastic interest rates. VA loan rates can be up to .50% lower than what you would get in a conventional mortgage!

That may not sound like much, but over the course of a year it can add up to a substantial savings.

Another big advantage of VA mortgages is that they do not require any monthly mortgage insurance.

Private mortgage insurance (PMI) is generally required on conventional loans when borrowing more than 80% of the value of a property, and the percentage amount varies with the loan-to-value.

Once again, this may not seem like a lot of money, but when added up, PMI also ends up costing hundreds of dollars a year, if not more.

By combining only the saved expenses of lower VA loan rates and the elimination of the PMI requirement, you are already looking at savings in the hundreds to thousands of dollars a year, depending on the total loan amount.

It is also typically easier to qualify for a VA mortgage loan than a conventional mortgage. This has become especially true with the current downturn in the housing market.

VA loans do not require any money down at time of purchase, and, as is often the case, with no cash out of pocket.

In addition, veterans are allowed to choose between having a fixed rate or an adjustable rate for their VA mortgage. The difference between the two options is as follows:

  • Fixed rate loans have only one interest rate that is used throughout the duration of the loan.
  • Adjustable rate loans start off with a set interest rate, but after an established time period the person who took out the loan can have their rate changed if it would work in their favor.

The Department of Veterans Affairs does have a funding fee requirement for VA loans. This funding fee can be anywhere between 0.5% to 3.3% of the loan total.

However, veterans who were classified as disabled during at least 10% of their time in active duty do not have to pay the fee.

Refinancing with a VA loan also has many benefits over refinancing with a conventional loan. Some of these benefits include:

  • A higher refinance limit (up to 90% and some 100%) than the majority of conventional loans.
  • Easier credit requirements, which often make refinancing with a VA loan simpler and less stressful.
  • Help from the Department of Veterans Affairs for borrowers currently in default because of financial hardship.
  • No requirement of private mortgage insurance.
  • The ability to include the VA funding fee with the total amount of the refinance.

Between the tremendous savings and easier terms, any veteran who is in the home-buying process should strongly consider using their hard earned VA benefits. In both the long and short, it simply makes sense.

VA Mortgage Approval – How Long Does It Take?

The amount of time it takes for a VA mortgage approval varies depending on the amount of volume the lender has at that moment.

However, our country’s economic crisis has resulted in tightened lending guidelines and longer processing and approval time-lines for all loans including VA mortgages.

Full mortgage approval can take anywhere from one to five weeks, depending on how complete and organized your paperwork is when submitted to the bank.

While there are a few explanations as to why the entire process is now taking as much time as it does, the simplified reason is that there are now more underwriting guidelines and restrictions on the mortgage industry today.

Fortunately, there are ways that veterans and military families can ensure that their VA mortgage approval process will go as quickly as possible:

1. Keep Yourself Organized

It’s a good idea to keep a well-organized folder of all the documents that you will need to send to your loan officer; this will ensure you are not scrambling at the last minute to find your required paperwork. You should also keep records here of any messages or documents you receive from your loan officer.

2. Fully Understand Your Benefits

You should now have a good understanding of your benefits and VA home loans. Ask your lender any questions you might have.

3. Send Requested Documents ASAP

As obvious as this one may seem, it is often a problem. Be sure to send requested documents as soon as possible to keep the VA loan process moving along.

4. Ask Questions As They Come Up

If you have questions or concerns, ask your lender right away. Don’t wait until the very end of the process to ask, or else you risk causing a slowdown.

5. Do Your VA Lender Shopping Early

The sooner you select your VA lender the sooner the process can begin, and the sooner you can be at closing.

6. Work With A VA Loan Specialist

If you work with someone who has been through the VA loan process many times before, there will be far fewer errors and setbacks. The choice is obvious: work with an experienced VA lender.

7. Be Available

Make your hours of availability as flexible as you can. There will be questions that arise throughout the course of the process, and the faster you communicate with your lender, the faster your VA loan approval process will be. If you will be unavailable for a period of time (for example, current military personnel going into the field) let your VA loan officer know in advance so there are no surprises.

8. Be Able To Communicate Through Email

The majority of the loan process can be done without extensive phone conversations. Also, if your lender has your data saved on their computer, there will be reduced chances of having information lost.

9. Stay Updated

Ask your lender to routinely keep you informed of where you are in the VA approval process.

What Is A VA Loan Pre-Approval Letter?

A VA loan pre-approval letter is a document granted by a VA mortgage lender that states that based on preliminary information such as the potential borrower’s credit, assets, and income, that they qualify for a VA loan of a specified amount.

It is different from a pre-qualification in that some or all of the submitted information is reviewed for accuracy before the letter is issued.

Having a pre-approval letter from your VA lender will show home sellers that you are a qualified buyer and may lead to your offer being more seriously considered.

Once you have obtained your VA loan pre-approval letter, you will then be able to begin making offers on homes you are interested in purchasing.

In order to get your VA loan pre-approval letter, your lender may require the following:

  • At least one months pay stubs or LES (if still active duty).
  • W-2’s and Tax Returns for the past two years.
  • Two months bank statements for any/all assets.
  • Your DD 214 form (if no longer on active duty).
  • Statement of Service from S1 (if still active duty)

Your pay stub is needed to show that you are currently employed, as well as your current income. W-2 statements (for the past two years) then show how much you normally earn in a year.

If you are currently still on active duty, your Statement of Service must show a minimum of 12 months remaining on your contract.

Finally, your DD 214 form will enable your VA lender to decrease the amount of time necessary for processing your certificate of eligibility. Once again, this is not required, but it is generally a smart idea.

The reason why this is a smart idea is that the majority of direct lenders with the VA can put in an order for your certificate of eligibility, which determines whether or not you are eligible for a VA loan.

The process can be very quick as long as you turn in all these documents as soon as possible to your loan officer.

After your VA loan officer or lender has the described documents, he or she can submit your information in the VA loan analysis software to determine your eligibility. The calculation that will determine your eligibility is:

(Monthly Income) – (Proposed Mortgage Payment + Insurance + Taxes + Utilities for the house + Monthly Credit Card Payments Due) = Residual Income

Residual income is the amount of money that you have after you have paid the sum of your monthly bills. The VA will use their judgment after they have calculated your residual income to decide if you will have a satisfactory amount of money left over after you have paid your bills.

The VA has established various requirements for what your minimum residual income will have to be, such as what part of the country you live in, the size of your family, how old your children are, and various other factors.

When obtaining VA pre-approval letter, be aware that simply getting the letter does not commit the lender to giving you a loan. It just means the initial information has been reviewed. In order for the mortgage application to be approved additional information and documentation about both the borrower(s) and the property must be reviewed to be sure that all of the guidelines are met.

Credit Score Requirements For Boise Idaho VA Mortgages

The VA does not require a certain credit score in order for approval.


However, the actual mortgage lenders are allowed to set their own standards for Boise Idaho VA loan requirements.


In the recent years, eligible veterans and military personnel have enjoyed an easier mortgage process than was available to many home buyers obtaining conventional loans. Occasionally, a veteran could receive a loan through the VA with a lower credit score and little or no down payment.


Changing economic conditions and increased losses due to loan defaults have motivated lenders to limit the availability of such mortgage deals.


Since early 2010, most lenders in the U.S. have tightened their lending and credit score requirements, making these loans harder to come by.


As a result, getting a loan without a down payment is more difficult, though one of the few remaining options for 100% financing is a Boise Idaho VA Mortgage. Major lending groups have generally resolved to set the minimum credit score requirement at 620.


These conditions similarly impact the Idaho VA Streamline Refinance program. Previously, the program let borrowers with a standing VA loan refinance to another VA loan without an appraisal. This allows veterans to navigate the process with much less paperwork by streamlining the process.


Most lenders now require borrowers to pay up to $300 or more for their own appraisal, which varies in price depending on the location and value of the home. If the appraisal shows the home value to be less than the VA loan amount, the lenders are likely to decline the application.


There is some good news for those eligible for a Boise Idaho VA loan, and the VA lenders who offer them: VA borrowers default significantly less (2.6%) than prime borrowers in general (3.4%).


However, the credit scores of V.A. insured borrowers are generally lower than other prime borrowers, according to the Federal Housing Finance Agency.


All things considered, Boise Idaho VA Mortgage loans remain a great opportunity. Veterans and active duty military personnel who qualify can often secure a low mortgage rate and meet the VA loan requirements even if their credit score is less than perfect.


In addition, about 25% of applicants to the Boise Idaho VA Mortgage loans, such as disabled or retired veterans, qualify for exemption from the one-time insurance fee that amounts to about 0.5% – 3.3% of the loan amount, depending on the scenario.

Frequently Asked Questions:


Q: Are the children of a living or deceased veteran eligible for the home loan benefit?

No, the children of an eligible veteran are not eligible for the home loan benefit.


Q: How can I obtain proof of military service?

Standard Form 180, Request Pertaining to Military Records, is used to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is NOT processed by VA.

Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.


Q: Is the surviving spouse of a deceased veteran eligible for the home loan benefit?

The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit.


If you have any questions about VA mortgage loans please feel free to contact us.

Are There VA Jumbo Loans Available?

If you’re looking at buying the home of your dreams – and the price reflects it – then a VA jumbo loan may very well be the best option for your mortgage.

In most veteran loan scenarios, the VA guarantees up to 25% of the total amount of the loan up to the VA loan limit in your county – which, in much of the US, is $417,000.

But what happens when the value of the loan exceeds your county loan limit?

This is where VA jumbo loans come into the picture.

For the purposes of this example, let’s say that you live in a county where the VA loan limit is indeed $417,000. You find the perfect house for you and your family, and it’s selling for $517,000.

You decide that you would like to use your hard-earned veteran benefits to take out a VA mortgage!

So, the VA guarantees $104,250 of your loan (with $104,250 being 25% of $417,000). Yet what happens with the remaining $100,000 of the loan?

Simple. The U.S. Department of Veterans Affairs mandates that on jumbo loans above the county loan limit, the borrower put down 25% of the difference between the cost of the loan and the applicable county VA loan limit.

Continuing on with our jumbo loan example from above, 25% of $100,000 ($25,000) would be required as a down payment, and the VA would guarantee 25% of $417,000 ($104,250).

Not bad at all! In this example you’re buying your $517,000 dream home for only $25,000 down in addition to the required closing costs.

The real value of VA jumbo loans is apparent when you compare and contrast it to the standard down payment requirement of a conventional mortgage, which is typically 20% to avoid paying private mortgage insurance.

This means that for the example $517,000 house, a conventional loan down payment would be $103,400 while a VA loan down payment would only be $25,000. That’s less than one quarter of the down payment required for the conventional loan in this scenario!

Please keep in mind while house shopping that VA county loan limits vary widely throughout the country and will be higher in areas with especially high property values. Once again, the standard VA county loan limit is $417,000, but it’s smart to check with your local VA mortgage agent prior to looking at houses.

For example, as of 2011 the VA county loan limit for Marin County is $1,000,000! San Francisco County has a loan limit of $1,000,000 as well.

To check what the VA county loan limits are for each county in the United States, you can visit the U.S. Department of Veterans Affairs at their loan limit website. For counties that are not listed on the website, the official VA loan limit is automatically set at $417,000.

Why is there such as large difference in county loan limits throughout the nation? In short, because the various housing markets across the country vary greatly.

In San Francisco a small single-family house may sell for $1,000,000, while in other places you might be able to find a similar house for $100,000!

Wherever you are, if you are in need of a substantial home loan, a VA jumbo loan is certainly worth checking out.

How Is A VA Loan Guaranteed?

When an eligible current or ex-service member needs to purchase a home for their own personal use, they can obtain a VA Guaranteed loan from a bank or broker, depending on the circumstances.

First, the veteran must apply for the loan with one of these lenders; if approved, the VA will guarantee a certain amount of the loan amount to the lender.

This means that if the borrower defaults on the loan the lender will be repaid the guaranteed amount, and they can generally make up the remainder of the loan amount through the sale of the property in foreclosure. This makes VA loans much less risky and allows lenders to offer more favorable terms to those who qualify.

Qualified VA borrowers can often obtain financing with no down payment. $36,000 is the maximum entitlement, or amount the VA will guaranty, for a loan up to $144,000. For loans over this amount, it can go as high as $104,250.

Given the property appraises for the asking price and the borrower is qualified, a lender will generally loan up to 4 times the available entitlement without down payment.

A Few Benefits Of VA Loans:

  • Any qualified veteran or current military personnel has equal opportunity to be given a VA loan.
  • 100% financing is often available.
  • Buyer is notified of appraised value.
  • VA will assist borrowers in case of default due to financial difficulty.
  • The VA funding fee can be financed into the loan amount.
  • Closing costs comparable (possibly lower) to other financing types.
  • Interest rate can be negotiated.
  • An assumable mortgage.
  • Ability to prepay without being penalized.
  • For houses appraised by the VA during construction, builder-provided warranty and help from the VA in acquiring builder cooperation.
  • No mortgage insurance required.

However, the VA does not:

  • Promise that a home is defect-free; only the loan is guaranteed by the VA.
  • Order a builder to fix defects in your home if you had a house built.
  • Guarantee that a veteran is making a good investment.
  • Provide veterans with legal services.

So, how do you go about getting a VA loan?

  1. Find the property you would like to buy and arrange the purchase with the seller.  You’ll then sign a purchase contract conditional upon approval of a VA guaranteed loan.
  2. Choose your lender, present your Certificate of Eligibility, and finish the loan application. Your lender will determine your credit and submit a request to the VA to dispatch a licensed appraiser to evaluate the value of the property.
  3. If the determined value is acceptable to all involved parties, and the lender determines that your loan application meets the VA loan requirements, your mortgage can be approved.
  4. You (and co-borrower, if applicable) will  then attend the loan closing and sign the related papers. The closing attorney will explain loan terms and requirements and monthly payment details.

When the VA receives report of loan, Certificate of Eligibility is adjusted to reflect use of entitlement and is then returned to the veteran.

The Boise Idaho VA Loan Appraisal Process

Before your home can be approved for Boise, Idaho VA home loan financing, a VA appraisal must be completed on the property.

An Idaho VA appraisal involves a thorough inspection of the home and property to determine the current market value of the home. This appraisal is especially geared towards reporting any defects involving safety or security of the home.

So, how does this fit into the VA loan process?

Simply put, even though the VA’s primary focus in assist veterans in financing a home, the VA must also take precautions to protect the investments of both the borrower and the VA itself with a good appraisal.

Let’s say that a veteran or member of the military found a house that he wanted to purchase for $100,000. The house seems to be exactly what he’s looking for; single story, pool in the backyard, freshly painted, and located on 4 acres of land out in the countryside.

He decides that he wants to use his use his hard-earned military benefits to get a zero money down VA loan. In other words, if approved, he’ll receive a fully financed $100,000 VA loan.

As part of the standard Idaho VA loan approval process, a VA-appointed appraiser goes to the property to do an appraisal of the actual worth. Unfortunately, the appraiser discovers that the house needs a new roof, there are cracks in the pool cement, and there are severe irrigation issues throughout the property that need to be fixed, among other miscellaneous flaws.

Tallied up, the appraiser determines the value of the home and property to be $75,000 instead of $100,000.

Because of the large difference between what the seller is asking for and the actual value of the property, the VA ultimately turns down the loan.

Of course, this is a somewhat extreme example, but you get the idea. The VA needs to verify that the actual value of the home and property is close to what a potential borrower wants to pay for it. Neither a mortgage bank nor the VA want to insure homes that are worth less than the loan amount.

Here is a list of things to consider when shopping for a new home:

* The appraiser needs to inspect both the inside and the outside of the house. If the house in question is being constructed, the appraiser still needs to analyze the property and construction site.

* The official appraisal report will contain a list of “observable repairs that need to be completed.”

* This report will also contain a list of “customer preference items to be installed.”

* A few small issues with the property won’t immediately disqualify it, but a lot of small issues or a few big issues may.

Other Common Idaho VA Mortgage Questions:

Primary Benefits of an Idaho VA Home Loan:

* 100% financing
* No monthly private mortgage insurance is required
* There is a limitation on buyers closing costs
* The loan is assumable, subject to VA approval of the assumer’s credit
* 30 year fixed loan
* Seller can pay up to 4% of the veterans closing costs and even pay down your debt to help lower your debt-to-income ratio
* Interest rates are similar to FHA rates
* You don’t need perfect credit

If you have any questions about purchasing or refinancing a home with an Idaho VA loan please feel free to contact us.

What Is A Statement Of Service Letter?

When veterans apply for a VA loan they are required to provide a Statement of Service letter, otherwise known as a SOS.

The Statement of Service letter has to be specifically geared towards a home loan, and can be obtained through your local office for military personnel.

A Statement of Service is a document which verifies that you are either an active military member, or are retired with at least 6 years of active service prior to retirement or discharge.

A SOS letter is required for VA loans in order to combat fraud and incorrect information. Although it is an extra step in the process, SOS letters ultimately help guard military service members by restricting VA loan availability to only those who qualify due to their service. Because of this, SOS letters are an integral part of the process behind getting approved for a VA loan.

After obtaining a SOS, the next step is to accurately complete it and have it signed by your commanding officer. It is very important that your SOS has both correct information and a signature.

Plan ahead and obtain your Statement of Service letter early in the VA loan process. This will help ensure that your VA loan approval process goes as quickly and smoothly as possible.

According to the Department of Veterans Affairs, if you retired or were discharged from the military after January 1, 1950, you can provide a copy of your DD Form 214 as evidence. If you are still active in the military, a Statement of Service letter is required.

Below is a great example of a Statement of Service letter from the Department of Veterans Affairs website, located at benefits.va.gov/ under the section titled “Chapter 2.”

Although your personal SOS does not have to follow this format, it should contain the same information.


SUBJECT: Statement of Active Military Duty Service

1. I certify that I, as Commanding Officer, am the official custodian for the personnel records of:  <insert name>

a. Name: b. Social Security ID: c. Service Serial Number (If different to b.) d. D.O.B. : e. Rank/Rating:

2. Below is an entire Statement of Service of active duty periods of service by the Veteran stated above.

A. From (date of service entry) b. To: c. Status: d. Separations and Forms Issued: e. ETS:

3. I certify the veteran stated above has lost ____ days of active service during their current period.

4. Service member is not barred from re-enlistment.

a. Type / Print Name: b. Signature: c. Title: d. Date: