The Truth About VA Home Loans In Williamsport

There is sometimes confusion around the rules and eligibility of VA home loans. To get to the bottom of the issue, we sat down with Williamsport mortgage broker D. Shane Whitteker, owner and chief broker at Principle Home Mortgage. Whitteker is an expert in VA home loans.

Not True: VA loans come from and are funded by the Department of Veterans Affairs

The Truth: The VA loans do not originate from the Veterans Affairs department. VA mortgages are funded by private banks that lend their own money under VA guidelines. The VA insures these mortgages to provide loss coverage to the lender that funds the mortgage for the qualifying veteran or surviving spouse. The VA sets the guidelines for this insurance to be issued as a protection to the lender.

Not True: It’s impossible to know if the house I want qualifies for a VA loan

The Truth: It’s best to contact your local mortgage broker to help steer you through this process. However, clear guidelines dictate which property qualifies for a VA loan. A property that qualifies for a VA loan must meet the Minimum Property Requirements or the MPRs. The MPRs include:

• The mechanical system must be safe and can be used in the future


• The heating and cooling systems must be adequate.


• The roofing must be sufficient.


• The property must be free from termites, fungus, or rots.


• The paint must not be lead-based.


• The basement and any crawl spaces must be dry.


“VA isn’t that difficult to figure out in relation to the property itself,” Whitteker says. “Most properties that are 4 units or less and residential will qualify. The home can not be in a significant status of disrepair and peeling paint is a sticking point as well. The paint or repairs will just need to be made prior to closing unless the veteran is utilizing a VA renovation mortgage.”

Not True: I’m going to use a VA loan to buy an investment property

The Truth: VA loans cannot be used to buy an investment property. You can use the loans to acquire assets such as a home or repay or refinance a conventional loan. VA mortgages are offered for a number of options, including construction loans, renovation loans, cash out refinance loans, and rate and term refinance loans (IRRRL). They are not applicable for the acquisition of commercial property since one of the main objectives of the VA loans is to ensure veterans have a home to live in full-time or so their families can find a home.

Not True: If I pay my VA loan early there will be penalties.

The Truth: Very few loans at this point come with a pre-payment penalty. A lender would have to meet a very narrow set of circumstances to be allowed to offer a mortgage that includes a pre-payment penalty on a primary residence. This includes VA mortgages, there is not pre-payment penalty allowed on a VA mortgage. 

“You can pay your VA loan off at any time with no prepayment penalty,” Whitteker says. “It is not possible to set up a VA mortgage with a prepayment penalty.”

There are benefits to paying the loans early. As you pay early, you get to save some cash that you could have paid in the form of interest. Therefore, for those with VA loans, you can save by beginning early payments.

Not True: There is no funding fee with a VA loan

The Truth: A VA funding fee is a one-time payment made by military veterans, service members, or survivors pay for VA-backed client home loans. The main purpose of the VA funding fee is to help cover the overall cost of providing the VA mortgage program. VA home loans do not have down payments or monthly mortgage insurance; hence the funding fee ensures you are able to receive a VA mortgage under these terms. The VA funding fee is usually refundable; however, you have to meet certain criteria to qualify for the refund.

Not True: I don’t have 20% to put down on my VA loan, so I’ll have to get mortgage insurance

The Truth: There is no monthly mortgage insurance required for VA loans. The loans use the funding fee to serve in the place of 20% down payments as compensation for the risk of loan defaults. As long as you pay the funding fee, you qualify for the loan without any other financial requirements included again. Veterans with any percentage of disability from the VA are exempt from paying the funding fee.

Not True: I already bought a house with a VA loan when I was younger. I’m only allowed to get one VA loan

The Truth: As long as you are eligible for the loans, you can borrow as many times as possible. One can have two VA loans at once. There are other reasons why one may need VA loans besides first-time borrowing, which is usually directed towards buying a home. There are specific calculations required if a veteran will be carrying two VA mortgages at once, make sure to discuss this situtation with your local mortgage broker.

Not True: Getting a certificate of eligibility is a difficult and cumbersome experience

The Truth: The certificate of eligibility confirms that you qualify for the VA loan benefits. The process of application for the COE is simple and streamlined.

“For most veterans this is a simple and immediate process that is completed by the lender or mortgage broker that is VA approved,” Whitteker says. “I have had clients that we could not get a COE for in the past. Something to do with loss of records because or a fire at a certain location where said records were stored. In that case it would take a lot more effort to get the COE.”

You can apply to get your COE online or by email, and the department of veterans affairs will respond to your request as soon as possible. You can also ask the VA-approved lenders to get the certification on your behalf. This is the best, shortest, and simplest method because the mortgage broker performs all the functions and has access to the VA department database, enabling them to get the results quickly.

Not True: Nobody knows what is acceptable proof of my military service

The Truth: The acceptable proof of military service is the documentation showing you served in the military. For those still in active service, it is an original statement signed by the personnel office, adjutant, or a commander to identify you or your social security number and provides the relevant dates such as date of entry, departure, and so forth. For a discharged veteran, the form DD-214 will provide the necessary information.

Not True: My ex-wife is a veteran, so I am eligible for a VA loan

The Truth: An ex-spouse cannot apply for a VA loan under any circumstances other than being a widow to a qualifying veteran.

“Only veterans or the spouse of a deceased veteran are able to qualify,” Whitteker says. “The veteran must have died in the line of duty or from an injury incurred in the line of duty for the spouse to be eligible.”

If you’re a widow to a military member, you qualify as a survivor. The loans are intended for veterans who have served in the military; hence you cannot get the services without wither being a veteran or a surviving spouse of a veteran.

To learn more about VA home loans in Williamsport - or anywhere else in Pennsylvania - contact Williamsport mortgage broker Principle Home Mortgage at (814) 308-0959.