Does anyone remember that show Myth Busters? That show always had “proof in the pudding” when dispelling commonly held beliefs. Well today, as a part of Military Appreciation May, I’ve decided to take a page from Adam Savage and Jamie Hyneman’s book by correcting a few preconceived notions surrounding VA mortgages. While there are a lot of misunderstandings to unpack in the world of VA lending, since there is no camera crew on standby, I’ll summarize a few of the larger points here:

MYTH: VA loans are harder and take longer to approve, so sellers are less likely to want to write a contract with a borrower using their VA benefits.

CORRECTION: VA loans often are easier to underwrite due to more flexible credit requirements, higher ratio ceilings, and the fact that many Veteran borrowers have non-taxable income that can be grossed up when necessary.

MYTH: VA Appraisals take longer to complete or often come in with low values, which can delay meeting commitment obligations, or may require sales prices to be lowered.

CORRECTION: VA appraisers are held to extremely high standards. As a result of VA’s rules around their collateral reviews, appraisers are limited to specific timeframes in which to complete their assignments (based upon the geographic region). VA also utilizes the Tidewater Act, which simply put, means if the Appraiser does not believe the value can be substantiated for the contract price, they are required to reach out to all parties to attempt to gather additional comparable support. Lastly, VA allows for reconsiderations of value, when necessary. If all of this is not enough to change minds about the property evaluations for VA loans, remember, so long as your Veteran borrower has sufficient funds to put down, there may not even be a need to renegotiate the sales price.

MYTH: Residual income requirements make VA loans difficult to process and nearly impossible to qualify for in underwriting.

CORRECTION: Leveraging websites like www.paycheckcity.com can make residual calculations easy for Processing and Underwriting. It is also worth noting that there are several guideline exceptions that may permit a reduction to the required residual amount (example: Active-duty Service Members and those that can access base benefits may be granted a 5% reduction to the required amount).

MYTH: Veteran borrowers can only use their benefits on one home at a time.

CORRECTION: The ability to utilize VA home loan benefits is dependent on the amount of the borrower’s available entitlement. If a veteran has sufficient entitlement to back multiple VA loans and can meet occupancy requirements, they may use their benefits as many times as they wish.

These are some of the arguments against VA loans I hear most frequently, so we’ll end our mini myth buster segment here, but be on the lookout for more helpful tips on how we can do more for our Veteran borrowers. Just remember, the goal is to provide more access to homeownership, not less, so VA is all about the open application of guidelines and a common sense lending approach to help reach this goal!