With home values rising faster than incomes, loan options that offer low down payments are more popular than ever before. And loans that offer zero down payment are even more appealing to many buyers, especially those who want to use their available cash to renovate their new home.
There are only two loan types that don’t require any down payment for qualified buyers: USDA loans and VA loans. So lenders are getting lots of questions about the qualification requirements for these loan types.
Today, we’re going to tackle a question we’re hearing more often: Can children of veterans get a VA loan?
Can the Child of a Veteran Get a VA Loan?
No, children of veterans don’t qualify for VA loans.
VA loans are reserved for active military service members, veterans, and their spouses. VA loan benefits do not extend to children of veterans.
But you do have other options for getting low down payment loans. You could even consider a USDA loan if you need a no down payment option.
What Low Down Payment Options are Available to Children of Veterans?
There is no loan type specifically designated for children of veterans. But, thankfully, there are several low down payment loan options available to all buyers who meet the income and credit criteria.
FHA loans give buyers with less-than-stellar credit a chance to get on the property ladder. With a credit score of around 580, you can qualify for a 3.5% down payment. If your score isn’t quite that good, you might still be able to qualify for an FHA loan with 10% down.
FHA loans are only available for your primary residence, so you must live on the property. But for those who want to own rentals, FHA loans allow you to purchase a multi-unit property with up to four units, as long as you live in one of the units.
USDA loans offer zero down payment options for qualified buyers. Backed by the US Department of Agriculture, USDA loans were created to promote homeownership and development in more rural areas. To qualify for a USDA loan, the property must fall within an approved rural area. But you might be surprised by how liberal the definition of rural is. Homes in many smaller towns and even suburbs can qualify. Check the USDA’s map to see which areas qualify for this program.
It’s important to note that USDA loans are only good for single-family homes that you intend to occupy as your primary residence. This loan type does not apply to investment properties. Although VA loans are also for primary residences, it is possible to buy a duplex with a VA loan, live in one unit, and rent out the other side.
Conventional loans are highly versatile as they can be used for any type of residential property in any area across the country. Conventional loans are available with as little as 3% down. The potential downside of conventional loans is that you need pretty good credit to qualify. Most lenders want to see at least 620 to offer a conventional loan.
Down Payment Assistance Programs
Some homebuyers, particularly lower-income or first-time buyers might qualify for a down payment assistance program. There are several programs available, including loans that you repay and grants that don’t require repayment. Many states offer state-specific programs, and some counties offer their own programs to incentivize buyers to move to their county. You can search online for local programs in your area or speak to a mortgage expert.
Can VA loans be assumed by the child of a veteran?
It’s is possible to assume a VA loan from someone else under specific circumstances. Check with your loan officer to determine if VA loan assumption is possible in your situation. If a surviving spouse is assuming a VA loan after the death of a military parent, we have more information that explains the process for this specific circumstance.
Where to Go for Help With Home Loans
Even though children of veterans don’t qualify for VA loan benefits, there are other ways to get a home loan with a low down payment.
If you’re not sure which loan type would serve you best, contact the mortgage experts here at OVM Financial. We’re happy to discuss your unique situation and go through your options with you. Give us a call today at 757-296-2148.
And when you’re ready to apply for a mortgage, you can start your loan application online at ovmfinancial.com/QuickStart.