If you are an active duty military member or veteran and are interested in buying a home, are having trouble making your mortgage payments or are interested in refinancing your existing mortgage, there are several options available to you. Here are some mortgage programs that cater to homebuyers and military homeowners.
VA Home Loan Program
Administered by the Department of Veterans Affairs (VA), the VA Home Loan Program is a secured loan program for veterans and active duty employees. Even though you get the loan from a private lender, the VA backs the loan with that lender. This means that if you have trouble making payments, the VA covers any losses the lender may incur. Essentially, a VA loan guarantee is like the insurance that a VA provides to a lender. Benefits of the VA Home Loan Program include low or no down payment, no private mortgage insurance, a limit on closing costs, and no penalty fee if you pay off the mortgage early.
Cal Veterinary Home Loan Program
Designed specifically for veterans who want to buy homes in California, the Cal Vet home loan program features low or no down payment and low interest rates. It’s also easier to qualify for a Cal Vet home loan. Cal Vet home loans are offered in amounts up to $521,250. The program is available at no cost to California taxpayers. Interest rates are “locked in” from the date you submit your application. The Cal Vet Home Loan Program obtains the loan guarantee from the VA. Eligibility for the Cal Vet home loan program has expanded, so most veterans who buy a home in California now qualify. There are no prerequisites for residency.
Military endurance option
If you are facing financial hardship due to an active duty injury, military endurance may be an option. A military forbearance is an agreement between you and a lender that temporarily suspends or reduces your monthly mortgage payments during the forbearance period. The patience period may last up to six months.
The Military Endurance Program enables you to overcome short-term financial problems and receive the help you need to get back on your feet. After the forbearance period ends, you are responsible for paying back the amount that was reduced or suspended. You can either pay it off by extending the term of your mortgage and moving those payments to the end, making a one-time payment or adding a set amount to your monthly payments until they are paid off.
Low interest rate refinance loan
An Interest Rate Reduction Refinancing Loan (IRRRL), also known as a simplification loan or a “VA to VA” loan, is a refinancing loan that offers existing mortgage holders the opportunity to take advantage of lower interest rates. To qualify for an IRRRL, the new interest rate must be lower than the current rate. For an IRRRL to be worthwhile, your interest rate must be at least 1% lower than the current rate. If you’re refinancing from an adjustable rate mortgage to a fixed rate mortgage, your interest rate could go up.