VA Loan ReportMissouri - 2010Realtor’s Edition

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The Veterans Administration now guarantees more than 3,300 loans in Missouri. We will show you how to earn an additional 3-4 deals per year from this group of home buyers with very little effort.

The next few pages provide Realtors with the key basics of VA loans. In less than five minutes, you’ll be prepared to discuss, market and sell like few other agents in Missouri.

The CurrenT LandsCape

On the heels of the subprime collapse, the Department of

Veterans Affairs guaranteed more than $68 billion in single-

family loans for the fiscal year ending Sept. 30, 2009, an 80

percent increase from last year. There are currently more

than 23 million veterans across the country, including almost

530,000 in Missouri.

Against this backdrop, the ranks of registered Realtors are

thinning nationwide. In Missouri, the number of registered

agents has fallen 8 percent since 2007. That shortage

is forcing veterans to spend more time hunting for a

qualified agent than ever before. Realtors who can cater

to this deserving demographic stand to boost their book of

business significantly as veterans return home from Iraq and

Afghanistan in the coming months.

“The one important factor in a VA loan is that once a purchaser is preapproved, you are generally assured that they will have a successful closing because VA does require good credit for a buyer. Another advantage for VA loans is that a vet can use his eligibility more than once.”

Kathy JonesPrudential Patterson

Realtors

By the NumbersMissouri Realtors by Year

40,000

50,000

60,000

48,101

51,56252,322

2007 2008 2009

3

Pulaski

St.Francois

Morgan

Camden

Taney

Texas

Howell

Henry

JohnsonCass

JacksonBoone

St. Charles

St. LouisPettis

Stone

Missouri CounTies wiTh highesT perCenTage of VeTerans

Pulaski 27%

Camden 18.5%

Stone 16.1%

Morgan 15.8%

Henry 15.6%

Johnson 15.6%

Taney 15.2%

Texas15.1%

Howell14.9%

Pettis 14.3%

St. Fran-cois14.1%

Cass13.3%

St. Charles 11.2%

St. Louis County 11.2%

Jackson 11.1%

Boone 9.3%

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15.5 to 17.114.0 to 15.412.7 to 13.95.4 to 12.6

The VeteranPopulation2000

Source: U.S. Census Bureau, Census 2000 SummaryFile 3. American Factfinder at fact�nder.census.gov provides census data and mapping tools.

Percent of people,18 years andover, who areveterans by state

18.0 to 39.115.0 to 17.912.7 to 14.98.5 to 12.6Less than 8.5

U.S. percent 12.7

U.S. percent 12.7

0 100 Miles0 100 Miles0 100 Miles

0 100 Miles

Percent of people,18 years andover, who areveterans by county

The BasiCsVA loans are backed by the government, a layer of protection that

often translates to excellent loan terms for qualified veterans.

VA loans can be used for a host of purposes, including:

• To buy, build or refinance an owner-occupied residence

• To refinance an existing VA-guaranteed or direct loan

• To repair, alter or improve a veteran-owned residence

• To simultaneously purchase and improve a home

• To buy a single-family residential unit in a VA-approved

condominium development

• To buy a farm residence owned and occupied by the

veteran

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There are a few limitations on properties that can be financed with

a VA loan. VA loans cannot be used for:

• Land loans

• Investment properties

• Buying or building a combined residential and business

property, unless:

The property is primarily residential, with no more

than one business unit and a nonresidential area

that doesn’t exceed 25 percent of total floor space

• Buying more than one separate residential unit or lot

unless one is owner-occupied and there’s evidence that:

The units are not available separately

The units have a common owner, were considered

one unit in the past or are assessed as one unit

The BenefiTsVA Loans provide qualified veterans with an array of financial

and lifestyle benefits, including:

• Less stringent qualification guidelines

• No down payments

• No private monthly mortgage insurance

• No pre-payment penalties

• Higher allowable debt-to-income ratios than conven-

tional loans

• Sellers can pay up to 6 percent of closing costs and con-

cessions

• Refinance options that do not have credit score re-

quirements and require less stringent underwriting

requirements than traditional refinances.

Agent Reminder:VA Loans come withNO DOWN PAYMENT.

“I love VA loans! It’s a fantastic product for the client. Sellers can contribute up to 4% of the purchase price, there’s no PMI and typically, VA loans have a better interest rate than most conventional, even FHA financing! No money down for the buyer is always great!”

Kelly Sloan, BrokerHome Sweet Home Realty

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Loan LiMiTsThe VA pledges to repay a quarter of the loan amount in the

event of default. The amount of that guarantee has recently

increased, making homeownership more affordable to more

veterans and their families.

Today, the VA will guarantee up to $104,250, which has

boosted loan limits to $417,000 throughout most of the

country. However, there are higher loan limits in some of

the nation’s high-cost areas, such as Hawaii, California and

New York. In these high-cost regions, qualified veterans can

purchase a home worth up to $729,000 without putting down

a single dollar.

funding feeThe Veterans Administration charges a per-person funding fee to help defray program costs. There are exemptions for veterans with service-related disabilities, but generally the fees change depending on the borrower’s military status and down payment.

For regular military, the breakdown is:

Down Payment Funding Fee for First-Time Use

None 2.15 percent

5% or more 1.50 percent

10% or more 1.25 percent

Agent Reminder:Today, the VA will guarantee up to $104,250, which has boosted loan limits to $417,000 throughout most of the country.

“The best feeling as a realtor is watching someone who served our country purchase a home. My experience with VA loans has always been wonderful.”

Brooke Sydenstricker McCarty

Weichert, Realtors

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For cash-out refinancing loans, the funding fee is 2.15 percent for regular military and 2.4 percent for Reserves and National Guard.

appraisaLsEach VA field station sets a maximum appraisal and inspection

fee based on comparable costs. Appraisal costs typically

average about $350. Here is the cost breakdown for Missouri:

Single-Family Home Condo

Condo Manufac-tured Home

Re-Inspection

$300 $325 $225 $65

Manufactured homes are eligible for a 30-year VA loan if:

• It is classified and taxed as real property

• It is property attached to a permanent foundation

• It conforms to applicable building codes and zoning

requirements

Agent Reminder:Appraisal costs typically average about $350.

Down Payment Funding Fee for First-Time Use

None 2.4 percent

5% or more 1.75 percent

10% or more 1.50 percent

For the Reserves and National Guard, the funding fee table is:

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New construction (those less than a year old and never owner-

occupied) is eligible if either:

• Covered by a one-year VA builder’s warranty

• Enrolled in a HUD-accepted 10-year insured protection

plan, or

• Built by a veteran as the general contractor for his or

her own occupancy

There are exceptions for veterans if builders will not provide

a one-year builder’s warranty or a 10-year insured protection

plan.

repayMenT and refinanCe

TThe VA guaranteed more than 144,000 refinances in fiscal

year 2009, a jaw-dropping 300 percent increase from FY 08.

The VA offers flexible refinance options for qualified borrowers.

Veterans can utilize a cash-out refinance to consolidate debt

or refinance to obtain a better interest rate using an Interest

Rate Reduction Loan, better known as a VA Streamline.

Qualified borrowers can’t get cash back with a VA Streamline.

But any out-of-pocket costs can be rolled into the cost of the

new loan – or borrowers can accept a higher interest rate and

allow the lender to cover the costs.

There are also refinance options for veterans with conventional

home loans. Qualified veterans can currently refinance up to

100 percent of their property’s appraised value. Veterans and

their families can also prepay on their loan without financial

penalty.

Qualified borrowers can’t get cash back with a VA Streamline.

But any out-of-pocket costs can be rolled into the cost of the

Agent Reminder:The VA offers flexible refinance options for qualified borrowers.

By the NumbersRefinances

0

30,000

60,000

90,000

120,000

150,000

2008 2009

144,800

37,300

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new loan – or borrowers can accept a higher interest rate and

allow the lender to cover the costs.

There are also refinance options for veterans with conventional

home loans. Qualified veterans can currently refinance up to

100 percent of their property’s appraised value.

good Business for reaLTors and Their CLienTs

Veterans are increasingly turning to the Veterans Admin-

istration when the time comes to purchase or refinance a

home. A roiling national economy and hardened credit market

have only underscored the urgency.

But surprisingly few Realtors have significant experience with

VA loans. Those who can harness the power of this dynamic

and deserving demographic will have a significant advantage

as the agent pool continues to shrink.

VAMortgageCenter.com®PROUD TO SERVE THOSE WHO HAVE SERVED OUR NATION

This guide was produced by VA Mortgage Center.com, America’s #1 VA LoanPurchase Specialists. Founded in 2003, VAMC.com has worked with over500,000 military families and serviced over $1 billion in VA Loans in 2009.

800-405-6682 Licensed Nationwide www.vamortgagecenter.com