VA Loan

The Servicemen’s Readjustment Act, passed by Congress in 1944, was developed to provide various benefits to veterans and their surviving spouses including the VA loan. The VA loan program was created to help American veterans purchase homes with no down payment and in situations where alternative financing may not be available. This is made possible by the U.S. Department of Veterans Affairs (VA) guaranteeing home loans made to eligible veterans. Megastar Financial is proud to offer VA financing to the many veterans living throughout Oakdale, Modesto, Sonora, Manteca, and all of California.

Most veterans, military, and spouses of deceased military members will be eligible to apply for a VA loan however service status will determine when someone will become eligible. If minimum active duty service requirements are met, veterans will be eligible without any delay. Active-duty members will need to complete approximately 6 months of service before becoming eligible. Applicants in the National Guard and reservists will need to wait 6 years before becoming eligible, however if they are called to active duty, they will become eligible after only 181 days of service. A Certificate of Eligibility (COE) will be required by all applicants so it is best to obtain this prior to beginning the application process.

The VA loan program provides many benefits to veterans when compared with alternative mortgage options.

VA Loan Benefits:

  • 100% financing (appraised value cannot exceed sale price)
  • VA funding fees can be financed with the loan (up to 3.3%)
  • No private mortgage insurance (PMI)
  • No pre-payment penalty
  • VA regulation limits closing costs
  • Up to $424,100 loan amount (certain counties may be higher)

VA Loan Limits

County Single-Family Two-Family Three-Family Four-Family
San Joaquin $424,100 $543,000 $656,350 $815,650
Stanislaus $424,100 $543,000 $656,350 $815,650
Tuolumne $424,100 $543,000 $656,350 $815,650

Lenders will typically require borrowers to have a credit score of 620 or higher but there is no required minimum score imposed by the VA. This means that at Megastar Financial, we can be flexible with each borrower depending on their unique financial situation. In some cases, a lower credit score can be approved in exchange for slightly higher rates or down payment requirements. W-2 statements, recent paystubs, and documentation of checking accounts, savings accounts, and other financial investments will be needed at the time of application. Being prepared with this information ahead of time can expedite the application process.

Veterans are also able to use the VA loan program to refinance an existing VA loan they may have. Cash-out refinances are available for those in need of extra cash for various expenses such as home improvements or high-interest debt consolidation. Interest Rate Reduction Refinance Loan (IRRRL) are also available for veterans who want to improve their current interest rate. The IRRRL is also referred to as the streamline refinance loan.

At Megastar Financial, our goal is to help veterans throughout Oakdale, Modesto, Sonora, and Manteca purchase a home or refinance their existing home loan at a great rate through the VA loan program. For more information on California VA loans, contact Megastar Financial today.