Understanding VA Loans in Louisiana

Summary

VA home loans are mortgages guaranteed by the Veterans Association for eligible veterans, service members, and surviving spouses.

These mortgages provide distinct advantages, including no down payment, favorable interest rates, and capped lender fees.

VA home loans can be used to buy, build, renovate, or refinance a home.

VA home loans are not always simple. Smart Move Real Estate wants to ensure veterans and service members are fully informed before committing to a mortgage. We pair our clients with expert lenders to guide them through the process. We’ve collaborated with Brent Barnett of Movement Mortgage to explore the ins and outs of VA mortgages!

Movement Mortgage

2281 South Range Ave, Ste A, Denham Springs, LA 70726

p: (225) 304-1662 | f (225) 238-7548

e: brent.barnett@movement.com

What is a VA Loan?

A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs (VA) for eligible veterans, active service members, and surviving spouses. The loans can be used to purchase, build, renovate, or refinance a home. VA loans offer unique benefits. These include no down payments, lower interest rates, and capped lender fees.

How Do VA Loans Work in Louisiana?

A VA loan is not issued by the VA. Instead, they guarantee the loan, meaning they assume its debt obligation if the loan defaults. The mortgage can be applied for through a VA-approved mortgage lender. These include national banks and lenders specializing in VA loans.

VA Loan Entitlements

A VA loan entitlement is the maximum amount the government will repay if you default on a loan. Qualifying service members either have full entitlement or remaining entitlement.

Full entitlement means there are no limits on the amount you can borrow without a down payment. The VA guarantees 25% of the loan, even if it exceeds parish loan limits. You have full entitlement if:

You have never used your VA loan before.
You paid off and sold your last property backed by a VA loan.
You’ve used your VA loan, had a foreclosure or compromise claim (short sale), and repaid the mortgage in full.

Remaining or Partial Entitlement means the VA will guarantee up to 25% of your parish loan limit. All parishes in Louisiana have a loan limit of $766,550 for a single-family home. You may have remaining entitlement if:

You have an active VA loan you’re still paying back.
Your previous VA loan has been paid off and you still own the home.
You refinanced your VA loan into a non-VA loan and still own the property.
You had a compromised claim (short sale) on a previous home and haven’t paid off the loan.
You have not repaid your VA loan.

Entitlement does not guarantee the amount of money you can borrow with a mortgage. Your lender ultimately determines this after assessing your financial information.

Why Use a VA Loan?

The Veterans Association Loan offers unique benefits to borrowers. A few of these advantages include:

No Down Payment:

Down payments are a percentage of the home price paid when applying for a loan. Typical down payments can be anywhere from 3-20% of the cost of a listing. VA Loans, however, do not require down payments. This lets service members apply for mortgages without needing to pay the percentage immediately.

No mortgage insurance:

Mortgage insurance protects lenders if a borrower defaults on a loan. Mortgage insurance is paid regularly or through a one-time payment at the loan origination.

Capped Lender Fees:

Borrowers pay a variety of fees when applying for a mortgage. These may include application or origination fees. VA Loans cap these fees at 1% of the loan amount, potentially lowering closing costs for borrowers.

Other Benefits:

Depending on eligibility, service members may also receive the following benefits:

Lower Interest Rates
Unconventional Credit Accepted
No Prepayment Penalty
Reduce Funding Fees
Ability to Finance Funding Fee
VA Financial Assistance
Life-Long Benefits

Eligibility For VA Loans in Louisiana

Eligibility for a Louisiana VA Loan is the same as that of other states. These requirements are based on service time, fees, and residential requirements. Your lender may also have their own requirements for VA loans.

Service-related requirements include:

90 consecutive days of wartime service
181 continuous days of peacetime active duty service
6 or more years of service in the National Guard or Reserves
Being the surviving spouse of a service member who died in the line of duty or of a service-related disability

Additional requirements include:

Borrowers must move into their new home no more than sixty days after purchase. Some exceptions may apply.
Payment of Funding Fee
The purchased property must be a primary residence.
- Does not include investment properties or vacation homes.

Before applying for a VA Loan in Louisiana, service members must present a Certificate of Eligibility (COE) proving they’ve met the requirements above.

How to Request a Certificate of Eligibility (COE)

A Certificate of Eligibility shows lenders that you meet the requirements for a VA Loan. You can request a COE online through the VA online portal, by mailing your regional VA office, or through your mortgage lender.

Tip: Your lender makes requesting a Certificate of Eligibility easy. You’ll need to provide copies of discharge paperwork and answer a few questions. Reach out to our preferred lender to get started!

Louisiana VA Loan Limits

Louisiana Loan Limit:

All parishes in Louisiana adhere to a loan limit of $766,550 for a single-family home. This represents the maximum amount you can borrow with a Louisiana VA Loan. Exceptions, however, do apply. Talk to your lender about applying for amounts higher than the loan limit.

Funding Fee:

A Funding Fee is a one-time payment when applying for VA Loan. The fee reduces the tax burden of providing mortgages without down payments or mortgage insurance. The fee amount varies based on the following:

Whether you’re buying or refinancing a home.
If you made a down payment and its size.
Your VA Loan history.
Limited to Primary Residences.

VA Loans are specifically designed for primary residences that you will live in. They do not cover vacation homes or rental properties. However, they can be used for up to four-unit properties if you intend to live in one of the units.

VA purchase mortgage	For purchasing a home
VA construction loan	For building a home. Includes costs of land, materials, and labor
Interest Rate Reduction Refinance Loan (IRRRL) or VA streamline refinance	For refinancing a mortgage with new interest rate and/or terms. No appraisal or credit check required
VA rate-and-term refinance	For refinancing a mortgage with new interest rates and/or terms
VA cash-out refinance	For refinancing to a new mortgage, cashing out the difference between the two
VA rehab/renovation loan	For buying and renovating a home
Native American Direct loan (NADL)	For Native American veterans to buy, build, renovate, or refinance a home on federal trust land.

How to Apply for a VA Loan

Apply for a Certificate of Eligibility (COE). A COE is a document that proves you are eligible for VA Loan. You can request this online through the VA.

Organize a file of your financial information. These include recent pay stubs, income statements, and tax returns. Your lender can help you gather these forms.

Work with your loan officer to find the right mortgage. There are various VA Loans for different purposes. Your lender will help you choose the best one for your needs.

Request a mortgage preapproval and start searching for homes.

Complete your mortgage application after accepting an offer.

Prepare to provide additional information as needed during underwriting.

Navigate VA Home Loans with Confidence!

Understanding the homebuyer process is crucial to buying a home in Louisiana. However, you shouldn’t have to do it alone. Smart Move Real Estate is a proud partner of Movement Mortgage. Contact our sponsoring loan officer, Brent Barnett, or call (225) 304-1662. Brent works hand in hand with you, ensuring you make fully informed decisions with each step!