Myth #1
Eligible Veteran Does Not Qualify

This myth is more is a misconception and is one more of misinformation than anything else. Sometimes a Veteran was never told about their benefits upon exit from the armed forces. It happens. There is a program called TAPS that veterans go through when they leave the military and it is chock full of information for veterans that are transitioning to civilian life. Unfortunately,  with all of the information given at this training, the VA loan benefit can get lost in communication or translation.

There are several other things that can happen too. Sometimes a veteran might have thought that their VA Loan eligibility expired, or possibly even believe that they do not qualify for a VA Loan benefit. They may believe that they used it once before and that they don't have any additional benefits.

Active military personnel also qualify while serving! So, ALWAYS call and check with a Certified Veterans Lending Specialist before making any decision about eligibility.

Myth #2
It is Harder to Apply and Qualify for a VA Loan

Quite the opposite! VA Loans are considerably easier for a veteran to get preapproved. VA does not have a minimum FICO score listed in the VA Lender’s Handbook. There are NO FICO score minimums or DTI Ratios for the federal VA Loan program.

Any minimum FICO score requirement or DTI is an overlay (an additional requirement set by the bank). VA uses what is called a Residual Income technique and not the standard Debt-to-Income (DTI) technique. However, veterans must meet lender overlays to qualify for a VA Loan. Fortunately, there are hundreds of banks that offer a VA loan product, so when one door closes... there is always another bank willing to help.

As a Certified Veterans Lending Specialist that works for a direct lender, I can help you find the right bank with the best terms for your VA Loan! I have access to 100's of lenders with thousands of loan products.

Unlike big banks, I am not locked down to just a few loan programs. So, if you or your veteran has been told that they do not qualify for a Florida VA loan, it is worth a 5 minute phone call to see what I can do to help (772) 222-6590.

Myth #3
VA Loans Cost the Seller Money

Some sellers and their agents mistakenly believe that it will cost the seller more money to close with a VA Loan because of rules on fees the buyer is not allowed to pay. But, just because the buyer cannot pay these fees does NOT mean that the seller automatically has to foot the bill on those costs.

In reality, the buyer is often allowed to cover all the fees being charged (outside of closing) and if they can’t, then someone like the agent, can cover any non-allowed fees.

Additionally, if the buyer or another person cannot cover the fees, then a lender can increase the interest rate a slight amount to cover the additional fees at closing with a lender credit.

When working with my veterans, I offer a 1% buyer rebate from my commission to help veterans cover any closing or other costs.

Myth #4
It Takes Longer to Close On a VA Loan

Many sellers and their agents believe that it takes longer to close a VA loan. In fact, it takes an experienced mortgage loan originator no longer to close a VA loan than it does a conventional loan. The Veterans Administration is NOT involved in the approval process (other than issuing a valid Certificate of Eligibility), so there are no wait times as far as getting approval to close from the VA.

Myth #5
A Veteran Using a VA Loan is "Broke" and Can't Afford the Home

Some believe that because VA loans are 100% financing, the buyer must be experiencing financial hardship. This is untrue. The VA Loan is a benefit and anyone who qualifies for a 100% loan, veteran or not, would be crazy not to take advantage of the loan product that allows them to close without a down payment.

A VA Loan is based on mortgage insurance, the same as with a FHA loan. With FHA Loans, the homebuyer has to use a down payment AND pay for mortgage insurance to cover an amount up to 20% of the purchase price. The amount that the buyer pays for mortgage insurance is based on how much the buyer puts down and how much the insurance company will have to cover in the event that the buyer does not pay their obligation.

With a VA Loan, the federal government provides this mortgage insurance FREE of charge to all honorably discharged veterans that qualify. So, instead of having to put down a large down payment or buy mortgage insurance,  the veteran can close on a loan with ZERO down. The VA provides FREE mortgage insurance equal to 25% of the home loan amount to active military and veterans. That is the essence of a VA Loan!

A veteran that takes advantage of this amazing benefit can then use the money that they do have to move, buy furniture, improve the property, or anything else they want to do with their money. Using a VA Loan does NOT mean a veteran has NO money, it means that they are being SMART with their money!

Myth #6
The Seller Will Have To do Crazy Repairs If They Accept a VA Loan Offer

Sometimes sellers and their agents that appraisal will come in too low, that the seller will have to pay for crazy repairs, or that the lender will require they do an abnormal amount of work to bring the property up to VA standards. In reality, VA appraisers have to do more work if the value is low. Appraisers also have to abide by TIDEWATER for VA loans, which means that if the appraisal comes in low, they have to follow a process.

Before I go into an explanation on TIDEWATER, I'd like to address the notion that sellers will have more required repairs. Again, this is not true.  The underlying VA Loan requirements are to be Safe, Sound, and Sanitary. Those are what drive the requirement for VA required repairs. It always make me shake my head as a real estate agent when I see a listing that accepts FHA, but wont accept VA. As a loan officer, I know that if a house can pass FHA, it will likely pass VA. If its won't pass either, than it should be really just be listed as a cash-only listing.

So, now, back to TIDEWATER. This is a process unique to VA Loans and I highly suspect that if more real estate agents were aware of this process, they wouldn't be telling sellers to ignore VA loan offers.

When an appraisal for a VA Loan looks like it might come back low, it triggers what is called TIDEWATER (named after a conference in Tidewater, VA). With this process, IF the appraisal looks like it might not meet the sales price, the appraiser must notify the person that ordered the appraisal. That person is most always the loan processor.

Once the loan processor receives word that the appraisal "might" come back lower than the sales price, they must notify BOTH real estate agents. Both agents then have two business days to submit ANY information that would support the higher sales price. While you can "sometimes" ask an appraiser to consider additional comps on other loan types, with TIDEWATER it is different. The appraiser must consider any information submitted by the agents BEFORE finalizing the appraisal.

TIDEWATER makes the VA appraisal MUCH more likely to meet the sales price of the home over an FHA or Conventional appraisal. Combine that with the fact that the VA is only looking for the property to be Safe, Sound, and Sanitary, and you have a much more desirable closing process than with any other loan type!

Myth #7
Surviving Spouses Do Not Qualify for a VA Loan

Surviving spouses may absolutely qualify to use a VA Loan for the purchase of a home. They must remain unmarried after surviving their spouse to qualify for a VA Loan and must request a Certificate of Eligibility from the VA. Getting the COE is a simple process and any experienced loan officer can request one on the spouse's behalf.

NOTE: A VA Loan can also be obtained for the spouse of an active duty member who is listed as MIA or a POW for at least 90 days. Eligibility under this MIA/POW provision is limited to one time use only.

Surviving spouses of Veterans who died from non-service connected causes may also be eligible under certain conditions. So, it is best to contact a Certified Veterans Lender Specialist to see if the veteran's spouse can use their veteran's benefit for a VA Loan. There is a different process to request a COE for a surviving spouse and the normal automated COE system will not work for this purpose.

Myth #8
Veterans Can Only Use a VA Loan for One Home

As a matter of fact, a veteran can use their VA Loan benefit many many times over the course of their lifetime for the purchase of their primary residence. Each time a veteran uses their benefit, they use a PORTION of their eligibility.

VA Loans are assumable too, so it can happen that a portion of a veteran's benefit is "ties up" in a property when they go to purchase a new primary residence. However, they may have enough eligibility left for a second home and can conceivably have more than one VA Loan out at a time.

Veterans can also restore their initial full entitlement amount. This is a one-time process that veterans are entitled to invoke when they need their VA Loan benefit restored to purchase a residence. So, ALWAYS call and check with a Certified Veterans Lending Specialist before making any decision about eligibility.

Myth #9
Veterans Do Not Have to Pay Anything at Closing

This myth comes from the misinterpretation of "no money down" to read "no money at closing". It is simply not possible for a veteran to pay absolutely nothing (short of a gift from others) to close on a home. Well.... sort of.... I will explain...

Before a veteran even gets to closing, there are costs that must be paid out-of-pocket which can amount to a couple thousand dollars or more. Also, there are fees that will need to be paid at closing that the buyer is allowed to and will pay. For example, Here are a list of VA allowable fees that buyers can pay and a list of VA nonallowable fees that they cannot.

Just to give an idea of the costs, here are fees with approximate costs that a VA borrower may pay before ever going to closing:

• Credit Report Fee $25 - $60
• Appraisal - $300 - $1500 (can be more in some areas)
• Survey - $400 - $800 (can be more in some areas)
• Insurance (can be paid at closing) $$$varies
• Any repairs the veteran wishes to pay prior to closing (not recommended)

Note: In Vero Beach and Indian River County, prices typically range about $500 - $650 for an appraisal and about $400 for a survey.

Having said ALL of that, it is still possible for a veteran to pay nothing on closing day. In addition to the new FL Hometown Heroes Housing Program, I also contribute up to $10,000 from my buyer agent commission with my buyer rebates.  However, the veteran will be responsible for all out-of-pocket costs up to the day of closing.