VA Vendee Loans

by Amberstar
(Las Vegas, NV)

I have applied for a VA Vendee loan. I am not a Veteran but am taking a repo'd house off the VA's repossessed homes list. This loan product is offered to individuals to help finance the purchase of VA REO Properties. Both veterans and non-veterans are eligible for Vendee financing.

Some of the guidelines are listed below:

Can be financed with as little as 0% down. The loan amount may be increased up to 2% to finance closing costs, pre-paids or other expenses.

Funding fee of 2.25% may not be financed. Seller may contribute up to 6% of the purchase price to pay for the funding fee, closing costs (including the $2500.00 origination fee), prepaid and other expenses.

I'm a first time home buyer trying to figure this out for a home that costs about $60,000.

I can't figure how much cash I need to start with for a $0 down home loan. I seem to understand that equals about $5000.

I cannot finance 2.25% $1350+ plus 6% closing costs of $3600.

Loan may be increased by 2% to finance closing cost -$1200 = $3700 I need for my $0 down?

That was my first question, second is if I get approved for $62,000 does that mean I need to find a house for $62,000 or do I anticipate the 102% of the loan totaling $62,000? So my max bid cannot be more than $60,784?

=====ANSWER=====

Hello Amberstar;

Well, I have to admit, this kind of loan product is new to me. I did a little quick research at the VA website and you have found a great loan product here.

The best answer I can give you is to look at it this way.

You are looking to buy a VA repossessed home using a loan product that offers very flexible terms in my opinion. So when you consider who the seller is, it is likely you would have no problem getting the 6% sellers concessions which can be used towards most all of the cost involved in doing the loan including your 2.25% funding fee.

Consider the sale price of the home is $60,000. You are going to borrow $61,200 with $1200 going towards your closing cost. You do not need a down payment. Let's say the closing cost charged by the lender is 6% of the sales price which is $60,000. So your closing cost would be $3600.

At closing you would have to pay the $3600, plus the funding fee of $1350. For this we have a total costs of $4950. If we get a 6% seller concession of $3600 and you have the 2% or $1200 from your financing, you should not need more than $150 for closing.

However, the question remains if you can get all the closing cost covered by the this 8% (6% from the seller and the 2% you financed).
There are several costs involved, like credit reports, home owner insurance, taxes etc.

I would expect you would need somewhere around $3000 total.

Your best bet is to see a good loan officer and have them do a GFE (Good Faith Estimate) for you.

I must say, I learn something new everyday. I see this loan product works for investors also. I may need to start looking around for some of these myself.

I wish you the best.

Kind Regards,

Jeff Ragan

Comments for VA Vendee Loans

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VA Vendee Loan Refi
by: Thomas

Can a 30 year VA Vendee Home mortgage (held by a non-veteran) be refinanced for 15 years at a lower rate in today's market? I've heard that the VA holds the title and the mortgage requirements can only be satisfied if the current mortgage is paid in full or the house is sold to pay the mortgage in full.

=====ANSWER=====
Hello Thomas,

This is a great question. I cannot say for sure since I have not personally done one of these loans. I suggest you go to VA.gov and do a little research.

If a non Vet is the current mortgagee, I'm guessing, but I doubt anything can be done to refinance.

Anyone else in this forum wish to contribute?

Jeff

Va Vendee Qualifications
by: Wendee

I am looking at a VA Vendee loan. I got a flyer from the VA website directly and it says on there "not a credit based driven program". I called the telephone number they had on the flyer and I was put through to Bank of America.

When I inquired about this the lady was very snotty and rude, she said that they require a minimum of 620 FICO and this VA Vendee program was in fact credit driven. I told her that's not was it says on the flyer, she said she didn't know where I got it but my info was all wrong. Then she said "do you want to do this or not?" she was very pushy.

Can someone confirm for me? I felt I was speaking to someone at Bank of America who was not knowledgeable on this particular VA Vendee program and she was just talking about their regular programs in general as per what the guidelines are. Can someone clarify for me? I'm so confused!

VA Knowledge
by: Miss Virginia

I have currently placed a bid on a VA foreclosure property, and would like to obtain a VA Vendee loan.

The loan officer I spoke with didn't explain all I would need for the closing fees and down payment.

The home is listed at $162,900. I would like to know what I would be required to have upon closing on this purchase if my bid is accepted. I want to have everything I need prior to closing. My main concern is to understand so I'm not taken advantage of during my purchase.

Another thing, my other concerns are that the home needs major repairs and my Realtor advises me to use less of my cash and do the repairs after the purchase, but if all those fees are required then I can not make repairs after purchase.

Currently the property is not suitable to move in without repairs. So from this stand point which financing would best suit my needs.

Thank You,

Ms. VA From VA

======ANSWER=====

Hello Ms. VA,

Well you have a great deal of loaded questions here.

You are correct in wanting to understand all the costs involved before closing. I suggest you visit your local Bank of America and ask about the VA Vendee Loan. I understand that BOA is the current service provider for this type of loan.

As far as figuring your closing cost. It is very hard for me to do so without many more details. I know you need to have a good faith estimate explained to you in detail. A good loan officer will doe this with you.

One thing you need to know is there will be a $2500 origination fee which should include your credit report, tax service, flood certificate and closing costs. The seller can contribute up to 3% of the sales price towards these costs.

You will also pay a 2.25% VA funding fee which the seller cannot contribute to. In most VA loans, the funding fee can be added to the loan amount. This should be around $3,665.25.

If you plan to live in the house, you should be able to get a zero down payment.

So if the seller pays 3% of the sales price towards your closing costs, you should be able to get into the house with little to no money down.

Also, keep in mind your will have prepaid expenses like taxes and homeowners insurance that can be covered in a large way with the seller concessions also.

Again, you need to speak with a bank loan officer at BOA.

Hope this Helps,

Jeffrey Ragan

VA Vendee Loans
by: Russ

What a great opportunity!!! I will have to check into this myself. Now I'm wondering how to find VA foreclosed homes? I will have to investigate this since you do not have to be a veteran to qualify!

Great question!!!

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