Join Club

Ask Eli: Department of Veterans Affairs Loans

Ask Eli banner

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: Are funding fees on VA loans eligible for seller credits?

Loans guaranteed by the Department of Veterans Affairs are known as VA Loans (Who thought VA stood for Virginia? Be honest…) and provide current and former servicemembers with an opportunity to purchase a home with as little as 0% down. In addition to the normal closing costs (title fees, transfer taxes, etc), a Funding Fee is charged at settlement, which is equal to anywhere from 1.5-3.3% of the loan amount. It’s a fee paid to the VA on every loan to offset the cost of loans that default. It’s the same concept as Mortgage Insurance, but much cheaper.

In a previous column, I explained how buyers can negotiate for seller credits to reduce or eliminate the out-of-pocket expense of closing costs at settlement. Fortunately, the Funding Fee falls into this category, along with the rest of the standard closing costs associated with a VA loan, and buyers are eligible to have all of these costs covered by the seller. In theory, if a buyer is able to negotiate 100% of closing costs paid by the seller and chooses a 0% down payment loan, a home can be purchased cash-free (until the first monthly payment).

If you’re unable to negotiate seller credits to cover the Funding Fee and are concerned about having the cash to pay for closing costs, you’re also allowed to roll the Funding Fee into your mortgage so that it becomes part of your monthly payment.

Arlington Veterans Affairs (VA) loans by the numbers:

  • In 2015, 218 of 2,893 purchasers (7.5%) used a VA loan. By comparison, 2,038 used a Conventional loan (70%). I’m actually a little surprised by this; I would’ve thought a higher percentage of purchases in Arlington would use VA loans.
  • The average sold price for homes purchased using VA loans was just over $581,000
  • The type of housing purchased using VA loans was pretty evenly split between single family (detached), townhouse, and condo
  • The maximum loan amount for Arlington (and the rest of the Northern VA counties) is $625,500, but there are ways to increase the loan amount by putting more money down.

I hope the veterans and active duty military residents of Arlington had a great Memorial Day Weekend. Thank you for your service!

If you’d like a question answered in my weekly column, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at http://www.RealtyDCMetro.com.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, (202) 518-8781.

Recent Stories

A 3 BD/3.5 BA four level brick townhome with a private roof deck and finished 2 car garage is included in Just Reduced.

Good Tuesday evening, Arlington. Today we published articles that were read a total of 16176 times… so far. 📈 Top stories The following are the most-read articles for today —…

A teenage girl on an electric scooter was seriously injured after colliding with a driver near Washington-Liberty High School earlier this afternoon. Shortly after 1 p.m. on Tuesday, police were…

Arlington County is offering residents free training on the anti-overdose drug Narcan. The sessions are available as an hour-long online training course or an abridged, 10-minute training over the phone….

EDBS Dental Billing Solutions is pleased to announce that it has achieved compliance with the federally mandated standards of the Health Insurance Portability and Accountability Act (HIPAA) through the use of Compliancy Group’s proprietary HIPAA methodology, The Guard® compliance tracking software, and HIPAA Seal of Compliance®.

The HIPAA Seal of Compliance is issued to organizations that have implemented an effective HIPAA compliance program through the use of The Guard, Compliancy Group’s proprietary compliance tracking solution.

Clients and patients are becoming more aware of the requirements of HIPAA compliance and how the regulation protects their personal information. Forward-thinking providers like EDBS Dental Billing Solutions choose the HIPAA Seal of Compliance to differentiate their services.

“Since the nature of our business being exclusively remote, we take HIPAA compliance very seriously. With the help of Compliancy Group, we are able to take steps to fortify our systems to protect PHI information and familiarize each employee about HIPAA and how we can further safeguard PHI data.” said EDBS Dental Billing Solutions founder Goldie De Leon.

Read More

Submit your own Announcement here.

Are you feeling overwhelmed or struggling to cope with life’s challenges? You’re not alone. Mental health issues are more common than you might think, and seeking help is a sign of strength, not weakness.

Our counseling service provides a safe, supportive environment where you can explore your feelings, identify negative thought patterns, and learn coping skills to manage your symptoms. Lauren is trained in evidence-based practices and specializes in a range of mental health concerns, including anxiety, depression, trauma, and addiction.

We understand that seeking counseling can be intimidating, but we believe that everyone deserves to live a fulfilling, happy life. Our approach is non-judgmental and compassionate, and we work collaboratively with you to develop a personalized treatment plan that meets your unique needs and goals.

We offer a free 15-minute consultation to see if our service is a good fit for you. Reach out at https://peacefulmindsolutions.com or call (703) 994-0300 to set up a consultation.

Read More

Submit your own Announcement here.

Singin’ in the Rain

The “Greatest Movie Musical of All Time” is faithfully and lovingly adapted for the stage by Broadway legends, Betty Comden and Adolph Green, from their original award-winning screenplay. Each unforgettable scene, song and dance is accounted for, including the show-stopping

5 Tips for Buying Your Dream Home – A Free…

Are you planning to move in the next 12 months but feeling overwhelmed by the current real estate market’s low inventory and high mortgage rates? Join us for a short seminar where we’ll provide 5 tips to help you find

×

Subscribe to our mailing list