When applying for a loan that is sponsored by the VA, applicants can typically expect an amount that is about 25% of the anticipated loan. If it is an amount that is under $144,000, they may give up to 40%, or the greater part of the loan. Although this is considered a veteran’s benefit, not everyone automatically qualifies. Individual applicants have the burden of proof when it comes to showing that they will be capable of paying the loan payments in the future.
- Because the VA guarantees loans, VA lenders can afford to significantly relax their requirements.
- In essence, the VA agrees to stump up a defined portion of the monies allocated should there be a default on a VA loan.
- A basic VA entitlement is about 144,000, of which about a quarter will be reimbursed to the lender should the loan be defaulted on.
“The guaranty takes away the need for a down payment and makes it easier for veterans to buy a home.”