New Legislation (Pending) Increase Cash-out refinancing loans to conforming rate. No longer limited to $144,000 Raise LTV from 90% to 100% Renewal of ARMs and HARMs until 2012
82% Veteran Homeownership Rate 68.1% National Homeownership Rate Race: White – 73% Black – 17% Hispanic – 8% Asian/PI – 2% AI/AN –.6% Median FICO Score 679 88% Male 12% Female $62,448 Median Income $6,000 Median Assets 30% Active Duty 70% Veteran 92% No Down Payment Average Purchase Loan $199,000 Veteran and Loan Profile
Year# Loans$ Amount FY 2003490,000$63 Billion FY 2004336,000$44 Billion FY 2005165,000$24 Billion FY 2006143,000 $25 Billion FY 2007133,000$25 Billion FY 2008179,000$36 Billion Total 1,446,000 $217 Billion Recent Loan Guaranty Workload Since 1944, VA has guaranteed over 18.3M loans for over $959B
VA does not make subprime loans, and the average VA borrower does not have subprime credit – VA Credit Standards – Avg. VA FICO score = 679 Toll Free Number for Outreach: (877) 827-3702 The Subprime Crisis
Opportunities With the implosion of the subprime market, VA is one, if not the only, remaining no-down payment option in the market Recent policy & legislation in response to the housing market crisis have benefited VA (HR 3221) This has created a unique opportunity for VA
Opportunities – New Loan Amounts Limits range from floor of $417,000 (basic, standard areas) up to max of $729,750 (high cost areas) https://entp.hud.gov/idapp/html/hicostlook.cfm (change limit type to Fannie/Freddie) https://entp.hud.gov/idapp/html/hicostlook.cfm Exception: States of AK, HI, Guam & Virgin Islands still have higher loan limit ranges – SAH-related provisions Increased PH and AH grants to $60,000 and $12,000 Annual adjustments to SAH grants based on construction cost increases TRA grants for active duty servicemembers SAH benefits for permanent and total service-connected disabilities resulting from severe burns
HR 3221 Maximum Loan Limit by County NC, GA, & TN
Find Home Go to Lender Lender: Determines eligibility electronically using WebLGY/Obtain COE Determines eligibility electronically using WebLGY/Obtain COE Uses AUS to get decision in minutes Uses AUS to get decision in minutes Orders Appraisal thru TAS (7 workday timeliness) Orders Appraisal thru TAS (7 workday timeliness) Obtains Loan Guaranty Electronically Obtains Loan Guaranty Electronically 14-21 Days Lender Closes Loan Lender Closes Loan Where we are Today..
99% of VA Loans are Automatics 1% are Priors 98.8% are LAPP 98.8% are LAPP
http://vip.vba.va.gov www.homeloans.va.gov VETERANS INFORMATION WEBSITES
Eligibility Pending Timeliness FYTD (through August 25, 2008) over 241,000 requests for a Certificate of Eligibility have been received by the Eligibility Center Of these 85,000 were electronic applications WebLGY allows you to obtain the certificate more quickly and is e-mailed to you when completed. No lost certificates! Currently the Eligibility Center is processing electronic applications three (3) days faster than mailed applications
Seller Concessions Limited to 4% of the appraised value Does not include normal costs such as: appraisal, credit report, title exam or title searches. May include VA funding fee, extra points or buy downs, prepaid items, buyers escrow accounts, payoff of buyers obligations Adding to sales price then amending contract is not allowed The VA funding fee can be paid by anyone!
Adjustable Rate Mortgages Authority through September 30, 2008 Authority through September 30, 2008 Annual adjustments limited to 1% Annual adjustments limited to 1% Interest rate increase capped at 5% Interest rate increase capped at 5% Must be underwritten at 1% above initial rate Must be underwritten at 1% above initial rate
Did You Know ? There are now more contractors than military personnel in Iraq???? Thats right….per the Government Business Magazine, there are 180,000 contractors & 156,247 military personnel in Iraq.
Occupancy and the Veteran See Chapter 3, section 5 of Lenders Handbook See Chapter 3, section 5 of Lenders Handbook Generally, must occupy within 60 days Generally, must occupy within 60 days Exceptions – IRRRLs IRRRLs Active Duty service persons spouse Active Duty service persons spouse Specific future event and specific future Specific future event and specific future date will make occupancy possible date will make occupancy possible
Occupancy by Spouse Veterans spouse may occupy if veteran is on active duty or if veteran cannot occupy within a reasonable time due to distant employment No family member, other than the spouse, may satisfy the occupancy requirement
VA Disability Income VA Disability Income Verification of VA Benefit Related Indebtedness – VA form 26-8937 dedicated fax # in Atlanta: 404-929-5558 1)If Veteran has a VA benefit-related indebtedness 2)If exempt from the Funding Fee 3)Disability Compensation Amount 4)Receipt of non service-connected pension (requires prior approval) 5)Incompetent? (requires prior approval)
VA Resale Program Effective July 24, 2008, the sale of VA owned homes has been contracted to: Countrywide(Bank of America)
Contact Information Contact Information www.homeloans.va.gov www.homeloans.va.gov www.homeloans.va.gov Atlanta RLC 888- 768-2132 Atlanta RLC 888- 768-2132 General Fax 404-929-5401 General Fax 404-929-5401 Email: email@example.com Email: firstname.lastname@example.org Winston-Salem Eligibility Center 888-244-6711 option 1-1-2 Winston-Salem Eligibility Center 888-244-6711 option 1-1-2 email@example.com firstname.lastname@example.org email@example.com VIP@vba.va.govVIP@vba.va.gov for portal assistance VIP@vba.va.gov
Questions? A handout with telephone numbers, fax numbers, e-mail addresses, and web site addresses is available.