Honoring Our Nation’s Heroes LenderSelect Mortgage Group VA Advantage Series Honoring Our Nation’s Heroes

What is a VA Home Loan? The Department of Veterans Affairs (VA) helps Servicemembers, Veterans, and eligible surviving spouses become homeowners. The VA provides a home loan guaranty benefit to help with the purchase or refinance of a primary residence. VA Home Loans are provided by private lenders (banks and mortgage companies), not the VA. If the borrower fails to repay, a portion of the loan is “backed” by the VA, offering loss-protection to the lender. This enables lenders to provide more favorable loan terms and interest rates to borrowers.

What Can a VA Home Loan Be Used For? Purchase of a primary residence Stick-built, Modular, Manufactured (restrictions may apply), Townhouse, or Condo (VA-approved project) Purchase new construction. Simultaneously purchase and make energy-efficient improvements (EEMs). Refinance of an existing VA home loan Up to 100% cash-out (if still the primary residence) Interest Rate Reduction Loans (IRRLs) do not require current owner occupancy. For example: A Veteran is transferred to a duty station overseas. They decide to rent out their home while overseas. The Veteran may do an IRRL because they previously occupied the home.

Program Highlights Down Payment Requirement – ZERO!!!!! Credit Score Requirement 600 minimum preferred 580 available (with credit overlays) Loan Limits $417,000* with no money down and full entitlement. Loan amounts can be higher with a down payment. *Some areas may have higher loan limits. Gift Funds – Allowed (with documentation) Cash Reserves – None required for single-family home Loan Types – Fixed & ARMs

VA Eligibility – Who Can Do a VA Loan? ERA Dates Service Time Required WW II 90 days Post WW II 7/26/1947 - 6/26/1950 181 days Korean 6/27/1950 - 1/31/1955 Post Korean 2/1/1955 - 8/4/1964 Vietnam 8/5/1964 - 5/7/1975 Note: The Vietnam Era began 2/28/1961 for those individuals who served in the Republic of Vietnam. Post-Vietnam 5/8/1975 - 9/7/1980 5/8/1975 - 10/16/1981 9/8/1980 - 8/1/1990 10/17/1981 - 8/1/1990 Enlisted - 181 days Officers - 181 days Enlisted - 2 years** Officers—2 years** Gulf War 8/2/1990 - present 2 years **Note: The veteran must have served 2 years or the full period which called or ordered to active duty (at least 90 days during wartime and 181 during peacetime).

VA Eligibility – Who Can Do a VA Loan? Current Active Duty – 90 days Members of the Reserves & National Guard must have 6 years of service. Veterans with a service-connected disability. Spouses of Veterans Unmarried surviving spouse of a veteran who died from a service-connected cause. If remarried, must be age 57+ and remarried after Dec. 16, 2003. Spouse of MIA or POW active duty member.

VA Funding Fee & Mortgage Insurance VA Funding Fees are financed into the borrower’s loan. Putting money down may reduce the funding fee. Veterans with disabilities may be eligible for funding fee waiver. No monthly mortgage insurance!!! Type of Veteran Down Payment % for First-Time Use % for Subsequent Use Regular Military None 5 - 9.99% 10% or more 2.15% 1.50% 1.25% 3.30% Reserves/ National Guard 2.40% 1.75%

VA Jumbo Loans VA loans are a great way to purchase a luxury home with: Low rates Lower down payment Lower fees No Monthly Mortgage Insurance For example: $650,000 Purchase Price Less VA loan limit of $417,000 = $233,000 difference VA Jumbo Down Payment = 25% of difference VA Jumbo Down Payment = $58,250 (only 8.96% of purchase price) A substantial savings compared to Conventional Jumbo Loans!!!

Seller Contributions & Concessions Sellers may pay ALL allowable closing costs and pre-paids!!! Including up to 2% in discount points

Seller Contributions & Concessions Sellers may also pay up to 4% of the purchase price to be used at the buyer’s discretion. What’s Not Allowed: Cash Decorating allowances (including carpet & flooring) Moving Costs Payment abatements More than 30 days of interest

Seller Contributions & Concessions Sellers may also pay up to 4% of the purchase price to be used at the buyer’s discretion. What’s Allowed: Payoff of debt, collections, or judgments Appliances VA funding fee Real estate taxes (advance payments) Hazard insurance

Damaging Credit Events BANKRUPTCY Chapter 7 2 years from discharge date 1 year from discharge date, with extenuating circumstances* Chapter 13 1 year payout completion; payment history must be satisfactory *Extenuating circumstances are temporary events that are beyond a borrower’s control, such as the loss of a job, medical bills or death of a wage earner. Divorce does not qualify. These events must be verified and documented, and they are subject to review by the underwriter.

Damaging Credit Events FORECLOSURE 2 years from discharge date (if related to a bankruptcy) 2 years from sale date (if not related to a bankruptcy) 1 year from sale date, with extenuating circumstances* *Extenuating circumstances are temporary events that are beyond a borrower’s control, such as the loss of a job, medical bills or death of a wage earner. Divorce does not qualify. These events must be verified and documented, and they are subject to review by the underwriter.

Damaging Credit Events SHORT SALE / DEED-IN-LIEU OF FORECLOSURE No wait period! Current on mortgage payments Not taking advantage of declining market conditions

How can LSMG help you and your borrowers with a VA loan?