VA Loans / No Money Down Loan Program

VA loans offer “no money down” payment options for Veterans looking to purchase a property in the South Bay area.  Many of our Buyers ask us about using these loan programs for a purchase, and several of our Sellers also ask us about these loan products, especially when they are considering accepting a VA Buyer’s offer for their property.  As a Seller, it is beneficial to work with VA Buyers, as they tend to pay premium prices for properties, since they have a lower down payment, and usually need to compete with higher down payment or all cash Buyers.  Allowing VA Buyers to submit an offer on a property will typically net a Seller more money from the sale.   

VA Buyers can purchase many types of properties, including some short sales and bank owned properties.  A Buyer using a VA loan program (or Veterans loan program) typically puts $0 down.  A VA Buyer will need funds for closing costs for their escrow fees, lender fees, title fees, etc. For this loan program, our team usually estimates closing costs for a VA Buyer at 2.5% of the purchase price.  This figure is normally on the higher side.  For example, on a $900,000 property, a Buyer using this program will need about $22,500 for closing costs, but wait… If a VA Buyer does not have $22,500 available, we can ask the Seller for a credit for the Buyer’s closing costs, so the Buyer comes out of pocket essentially $0 for the transaction, yes I said, $0!  For VA loans, a termite report is required.  The VA Buyer cannot pay for the termite report, so we normally request for the Seller to pay for that cost in our initial offer.  The VA Buyer can, however, pay for the cost of termite repairs, so these costs are up to negotiation between the Buyer and the Seller.  To use a VA loan, the property needs to be in livable condition since the Buyer is putting no money down.  An appraiser will call out issues such as chipping and peeling paint, missing fixtures such as toilets, sinks, etc., missing outlet switches, missing flooring, missing smoke detectors or carbon monoxide detectors, etc.  A home can be in “older” condition, and still be considered livable.  Any items an appraiser calls out need to be corrected before the Buyer’s lender will allow a loan on the property.  These items can be fixed by the Seller, the Buyer, or a combination thereof.  VA appraisers take significantly longer than appraisers for other loan products, so our team will normally instruct for the appraisal to be ordered on day 1 of a transaction.  A VA appraisal can take up to 14 days to receive back, and normally a VA Buyer only has 17 days to complete the appraisal in a transaction.  If you are purchasing a condo or townhome utilizing a VA product, the condo complex will need to be approved by VA.  The great thing about VA complex approvals is that they never expire, so if the complex has been approved at any time in the past by VA, we can proceed as normal.  If the complex you choose is not approved, our lender’s team will work on the VA complex approval for our team at no charge to the Buyer, Seller, or complex.  Team Whitney is very experienced with VA loan products, so whether you are a Seller or a Buyer, we will be here to help navigate you through this intricate loan process.  For more information or to set up a personal consultation, please contact Danielle Whitney Moore with Team Whitney (Keller Williams Realty L.A. Harbor) at (310) 987-9103.