Whether you’re an active duty military or veteran interested in buying a home, having trouble meeting your mortgage payments, or interested in refinancing your current mortgage, there are many options available to you. Below are some mortgage programs that serve homebuyers and homeowners in the military.
VA Home Loan Program
Administered by the US Department of Veterans Affairs (VA), the VA Home Loan Program is a guaranteed loan program for veterans and active duty personnel. Even though you get the loan from a private lender, the VA underwrites the loan with that lender. That means that if you ever have trouble making payments, the VA covers any losses the lender may incur. Essentially, a VA loan guarantee is like insurance that the VA provides to the lender. Advantages of the VA home loan program include low or no down payment, no private mortgage insurance, a cap on closing costs, and no penalties if you pay off your mortgage early.
Cal Vet Home Loan Program
Designed specifically for military veterans looking to purchase homes in California, Cal Vet’s home loan program offers 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” as of the date of your application. The Cal Vet Home Loan Program secures the loan from the VA. Eligibility for Cal Vet’s home loan program has been expanded, so most veterans who buy a home in California are now eligible. There are no prior residency requirements.
Military Leniency Option
If you are facing financial hardship due to an injury incurred while on active duty, military leniency may be an option. Military forbearance is an agreement between you and the lender that temporarily suspends or reduces your monthly mortgage payments during the forbearance period. The forbearance period can last up to six months.
The military forbearance program allows 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 repaying the amount that was reduced or suspended. You can pay it off by lengthening the term of your mortgage and moving those payments to the end, making a lump sum payment, or adding a specific amount to your monthly payments until it’s paid off.
Refinance loan with interest rate reduction
The Interest Rate Reduction Refinancing Loan (IRRRL), also known as a Streamline Loan or “VA to VA,” is a refinancing loan that offers current VA mortgage holders the opportunity to take advantage of low interest rates . To qualify for an IRRRL, the new interest rate must be lower than the existing rate. For an IRRRL to be worthwhile, your interest rate must be at least 1% lower than your current rate. However, if you are refinancing an adjustable rate mortgage to a fixed rate mortgage, the interest rate may increase.
