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Getting A Veteran’s Affairs (VA) Loan / Mortgage Loan in Delaware

If you are a veteran and are hoping to buy a home in Delaware, the Veterans Affairs (VA) loan program may be able to help you. The VA loan program was established in 1944 as a part of the Servicemen’s Readjustment Act, better known as the GI Bill. This legislation helped World War II veterans reintegrate into civilian life by offering various benefits, including education assistance and home loan guarantees.

The rationale behind creating the VA loan program was to address the economic disadvantages many veterans face as they returned from service to civilian life. Many of our service members gave up schooling and job training to serve overseas, thus limiting their ability to save money and establish credit. The VA loan program also stimulated the economy post-war, as it invested in a housing market and fueled economic growth and created jobs in the construction and real estate industries. 

On This Page: Does the VA Give Loans?, Disadvantages to a VA Loan, Who is Eligible?, What is the VA Loan Limit in DE?, What Credit Score Do I Need For A VA Loan?, Are VA Loans Hard to Get?, Contact Us For Help

The VA loan program has been highly successful in helping millions of veterans achieve homeownership. It continues to be an important benefit for veterans today, offering them a path to financial stability and the American dream.  Our team of expert real estate agents work with veterans in the area regularly to secure the home of their dreams near 

TIP: Our sister company, Motto Mortgage - Prosperity Milton, has additional info about VA home loans in Delaware.

va loans near you in Delaware

Can The VA Give Me A Loan? 

The Department of Veterans Affairs (VA) doesn't directly give out loans to homebuyers in Delaware, but they do offer a home loan program called a VA loan. This program is administered through private lenders, such as banks and mortgage companies, but the VA guarantees a portion of the loan, making it easier for veterans and eligible service members to qualify for a home loan.

Here are some of the key benefits of VA loans:

  • No down payment required: Unlike most conventional loans, you may not need to make a down payment on a home purchase with a VA loan.
  • Competitive interest rates: VA loans typically offer lower interest rates than conventional loans.
  • No private mortgage insurance (PMI): VA loans don't require PMI, which can save you money on your monthly mortgage payment.

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The Oldfather Group are expert real estate agents in Delaware, serving all of DE (including the DE shore), MD shore, and Chester/Delaware Counties in PA.

What Are The Disadvantages Of A VA Loan Near You In Delaware? 

While VA loans offer significant advantages, there are also some differences when comparing the requirements and rules when compared to a conventional home loan. Here are a few potential downsides to consider:

  • VA funding fee: This is a one-time charge that helps offset the cost of the program for taxpayers. The fee varies depending on several factors, including whether you're a first-time user, the size of your down payment, and your service history. While you can finance the fee into your loan, it increases your overall borrowing amount.
  • Tighter occupancy requirements: VA loans are intended for primary residences, not investment properties or vacation homes. You must occupy the property as your primary dwelling within 60 days of closing. This means buying your home must also coordinate with the date of your PCS or transfer into a Delaware military installation if you’re active duty.
  • Stricter appraisal requirements: VA appraisals are more stringent than conventional appraisals, ensuring the property meets the department's safety and quality standards. This may add time and complexity to the loan process, and could potentially lead to delays or even rejection if issues are found. 
  • Less equity upfront: Without a down payment, you'll have less equity in the home initially. This can be risky if home values fall, potentially putting you underwater on the mortgage. Additionally, it takes longer to build equity and access its benefits, like using it for a home improvement loan.
  • Limited property types: VA loans are generally not available for certain property types, including manufactured homes (unless they meet specific requirements) and some types of multi-unit dwellings.

Weigh the pros and cons of taking out a VA loan before taking the leap. While in most cases we find it’s a great option for our homebuyers, you must ultimately decide if it’s the right choice for you. Consulting with a mortgage professional who specializes in VA loans can help you understand your eligibility, answer your questions, and determine if this program aligns with your financial goals and circumstances. If you're looking for a VA loan for a home for sale in Delaware, give our team a call!

Who Is Eligible For A VA Loan? 

Part of what our team of veteran home buying experts can do is help you determine if a VA Loan is right for you. Eligibility is fairly straight forward, but there are some qualifications and criteria you must meet.

Several groups of individuals are potentially eligible for a VA loan in Delaware, including:

  • Active duty service members: Those currently serving in the US Army, Navy, Air Force, Marines, Coast Guard, or National Guard.
  • Veterans: Individuals who have served in the military and have been discharged honorably after meeting minimum service requirements. These requirements vary depending on wartime or peacetime service and whether you served in active duty or the Reserves/National Guard.
  • Spouses: Un-remarried surviving spouses of service members who died in the line of duty or as a result of a service-related disability.

To confirm your eligibility, you'll need to apply for a Certificate of Eligibility (COE) from the Department of Veterans Affairs (VA). This document verifies your service history and entitlement to VA loan benefits. You can apply online through the VA's eBenefits portal or by mail using VA Form 26-1880.

If you’re not sure if your service meets the requirements, you can view the eligibility requirements based on your dates of service on the VA.Gov website.

What Is The VA Loan Limit In Delaware?

The VA loan limit in Delaware for all counties as of January 1, 2024, is $766,550. It's important to remember that this limit applies to veterans who haven't used their full VA loan entitlement. Veterans with full entitlement can borrow up to the amount the lender is willing to offer, even if it exceeds the limit.

VA loan entitlement is essentially a guarantee provided by the Department of Veterans Affairs (VA) to lenders that partially protects them against losses if a veteran defaults on their mortgage. This guarantee allows veterans to access several benefits, including:

  • No down payment: If you have full entitlement, you can generally finance the entire cost of your home without needing a down payment.
  • Competitive interest rates: VA loans typically offer lower interest rates compared to conventional loans.

Here's a breakdown of how VA loan entitlement works:

Basic Entitlement is a set dollar amount, currently $36,000. The VA guarantees up to this amount for loans under the conforming loan limit, which we know in Delaware is $766,550. This means if you default on a loan under the limit, and it goes into foreclosure, the VA will reimburse the lender up to $36,000.

Full Entitlement is available if you meet certain criteria, such as never using your VA benefit before or having a previous VA loan paid off and the property sold. With full entitlement, the VA guarantees 25% of the loan amount for loans over the conforming loan limit. There's no limit on the loan amount itself, but you'll still need to qualify based on your income and creditworthiness.

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The Oldfather Group are expert real estate agents in Delaware, the MD shore, and Chester/Delaware Counties in PA.

Using and Restoring Entitlement:

Each time you use your VA benefit, the amount used is deducted from your entitlement. You can regain entitlement if you fully repay a previous VA loan and sell the property, or if you make a one-time restoration request, which is only applicable in certain situations and circumstances.

Keep in mind that your Certificate of Eligibility (COE) issued by the VA will show your entitlement amount. You also must remember that even with full entitlement, lenders may still require a down payment depending on your individual circumstances. It's crucial to understand your entitlement before applying for a VA loan and to consult with a lender to determine your eligibility and options.

va loans near you in Delaware

What Credit Score Do You Need To Get A Va Home Loan?

The Department of Veterans Affairs (VA) currently doesn't have a set minimum credit score requirement for VA loans. However, individual lenders do set their own minimums, which can vary. Remember, VA loans are not direct loans from the government - they are loans from lenders that are guaranteed by the government.

Generally, most VA lenders require a credit score of at least 620. Some lenders may go lower, while others may require a higher score for larger loan amounts. Even if you have a credit score below 620, it's still possible to qualify for a VA loan, but you may need to shop around and compare lenders.

As you look for a VA loan, there are some additional points to keep in mind: 

  • The higher your credit score, the better the interest rate you'll qualify for on your VA loan.
  • Even if you meet the minimum credit score requirement, the lender will also consider other factors, such as your debt-to-income ratio and your employment history.

If you're a veteran considering a VA loan, it's important to shop around and compare lenders to find the best deal. You may also choose to get help from a reputable credit counselor to improve your credit score before you apply for a loan.

Are VA Loans Near You In Delaware Harder To Get Approved? 

In general terms, it is no harder to buy a house with a VA loan than it is getting a conventional mortgage approved, but there can be a few nuances that might be hurdles you must overcome. VA loans don’t typically have a minimum credit score requirement, however some of the individual lenders who offer VA loans may require a minimum credit score. Your debt-to-income ratio is considered for both VA and conventional loans - this is the measure between your monthly debt payments and your monthly income. A lower DTI is generally better for approval. 

As we’ve discussed above, VA loans have additional requirements, like a minimum service time and a Certificate of Eligibility (COE) from the Department of Veterans Affairs. However, these requirements are specific to veterans and don't necessarily make them harder to get approved compared to conventional loans.

Ready To Find A VA Loan Near You in Delaware? Contact Us Today!

The Oldfather Group's team of veteran home buying experts near you in Delaware is here to guide you through the VA loan process and help you find the perfect home for your needs. We understand the unique challenges and opportunities veterans face when it comes to buying a home, and we're committed to making the process smooth and stress-free.

Contact The Oldfather Group or Motto Mortgage - Prosperity today to learn more about VA loans and get started on your home buying journey!

⭐⭐⭐⭐⭐  "We were referred to The Oldfather Group through a link on Zillow. We appreciated all of the support that we received from both the agent and the support staff. It made the process much easier than it would have been otherwise. Our agent was very knowledgeable and we found her advice on several issues to be invaluable. With regard to the support, there was some confusion with regard to the differences between the way things were handled in Maryland vs. Delaware. The communication and education was extremely helpful. We were particularly pleased with the rapid response time to our communication when something came up (which it frequently did)! We would be extremely pleased to work with The Oldfather Group and with our agent, Julie Seymour, again. Thanks for everything!" - Lori Lake

⭐⭐⭐⭐⭐ "My wife and I could not have had a better experience looking for a home than we did with Jesse. We had used a couple other realtors in Md. and De. before we worked with Jesse , and it is not even comparable. He is the most honest , hard working and caring person you could be lucky enough to work with. He worked so hard for us and constantly updated us on where we were. You could not be in better hands. Oldfather Group is the way to go if you are looking for a home. I will not let my family or friends go with anyone else. Thank you so much Jesse and Oldfather Group!" - Joseph "Joe" Heald

⭐⭐⭐⭐⭐ "Julie Seymour is the most knowledgeable and dedicated realtor in the Maryland and Delaware area. Whether helping to list your home or helping you to find a home Julie has it all covered from making sure your house presents at it's best to sell or finding your dream home. She is always prompt in responding going the extra mile on your behalf to find solutions to issues. The best thing about Julie is that she knows the area, she listens, she cares and she makes sure your experience is always positive." -Lynn D.

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