Eligible Veterans, service members and other beneficiaries

VA Housing Benefits: The U.S. Department of Veterans Affairs, commonly referred to as “the VA,” provides many assistance programs for eligible Veterans, service members and other beneficiaries interested in purchasing, building or repairing a home. One of the most powerful benefits is the VA-Backed home purchase loan program. This program allows eligible buyers in most cases to purchase a home with no money down, receive preferential terms and interest rate, avoid private mortgage insurance and several others. For more info on VA-backed purchase loans, click here.

The basics: The closest transaction type to a subject to that most Veterans are familiar with is a VA loan assumption, however, they are fundamentally different. The reason a loan assumption comes to mind when a Veteran learns about subject to is because the buyer is in essence “taking over” the seller’s loan, although in a subject to, the loan remains in the seller’s name.

In a loan assumption, the loan is “assumed” by the new buyer and the original terms remain, including the interest rate and the monthly payment – the main difference from subto being that the loan is transferred to the buyer.

An important similarity that these two transactions share is that they both have an impact on a veterans remaining entitlement until the loan is paid off. The only exception for this is if the VA loan is assumed by a Veteran and the entitlement is officially substituted on the mortgage. For more info on these similarities and differences, click here.

Subject To and Entitlement: Although selling a home subject to impacts a Veteran’s entitlement, they may still be able to use their VA benefits for their next purchase. There is no limit to how many times a Veteran can get a VA loan, the determining factor will always be their entitlement. Generally speaking, as long as a Veteran has entitlement available, they should be able to get a new VA loan.

Entitlement: VA entitlement is the dollar amount the VA promises to repay the lender if the buyer defaults on their loan. In other words, the federal government is giving the lender security in lending the Veteran money. Assuming full entitlement, the VA guarantees 25% of the loan to the lender.