Mortgage Assistance for Veterans on the Rise

November 01, 2012

chicago new home assistance for veteransFor veterans wishing to purchase new homes in Chicago, the good news is that the Department of Veteran Affairs has guaranteed nearly 540,000 loans in the past year. This is the highest number of loans distributed by the department since 1994 and a 300 percent increase from five years ago.

Now is a good time to take advantage of veteran home loans as tighter credit standards on conventional loans make lending for veterans more appealing.  One advantage to current veteran loans is that they do not require a down payment, which is virtually unheard of for any other type of loan. V.A. loans also do not require that borrowers pay for mortgage insurance.

While the V.A. Department does not directly finance loans, it makes each home loan more appealing to lenders by guaranteeing a part of each loan. In order to qualify, borrowers must have a credit score of at least 620 and must also be able to show they have enough “residual income” (income paid after personal debts and housing costs) to be able to make their monthly payments.

The V.A. expects to celebrate guaranteeing a loan to its 20 millionth veteran later this month.

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