Florida VA Loan: Mortgage Program Requirements and Guidelines

VA Loan In Florida

Veterans that live in the sunshine state of Florida can use the VA mortgage for a home purchase or refinance. The VA loan program backed by Veterans Affairs is a benefit offered to men and women that served our great country. For many reasons, this loan has been an important benefit for Veterans buying a home and starting a family.

Primary Benefits of VA Loans

There are several reasons why eligible veterans choose the VA loan for a home purchase. In no particular order, the major benefits are

  • VA does not ask qualifying borrowers to make a down payment. 100% of the sales price can be financed.
  • The interest rates are similar to conventional mortgage loans
  • The credit requirements for getting a VA mortgage approval are not as strict as other loans
  • Private Mortgage Insurance is not required
  • Home sellers are allowed to pay a portion of the closing costs

With no down payment requirement and no private mortgage insurance, the VA mortgage is an affordable way for veterans to buy a home with little out of pocket expense.

Who is Eligible?

There are many ways people can choose to serve our country via the military. For this reason, there are also different qualifications for who is eligible for the VA mortgage. Here is a brief description of the various ways people can meet the eligibility rules:

  • Active Duty – any person that has served in a branch of the military during war for at least 90 days (service days must be consecutive)
  • Discharged with wartime service – Any veteran that has been honorably discharged and served a minimum of 90 days during war
  • Discharged with peacetime service – Any veteran that has been honorably discharged and served a minimum of 181 days (service days must be consecutive)
  • Discharged with a disability – veterans that were honorably discharged with a disability that occurred during service may be eligible
  • Specific time period – Veterans that served between the dates of September 7, 1980, and August 1, 1990, must show that they were enlisted for at least 24 months in a row. They must be dishonorably discharged as well.
  • Reservists or National Guard – People that have served in either the Reservists or National Guard may be eligible if they meet the following conditions:
    • Served a minimum of 6 years. If served less than 6 years due to disability based on service, they must fall in one of these categories:
      • Listed as Retired
      • Discharged Honorably
      • Choose to serve as a member of Selected Reserve
      • Transferred to Ready Reserve

Based on these rules, a wide range of military personnel can meet the eligibility requirements for the loan.

Surviving Spouses Of Florida Veterans

As a way to honor the memory of veterans that perished in the line of duty, the loan is now available to their surviving spouses. If the veteran was discharged due to injury/disability and subsequently passes away because of the injury, the veteran’s surviving spouse can be eligible for the VA mortgage as well.

How to Use the VA Loan

The VA mortgage is available for the following types of homes

  • Townhomes
  • Single Family Home
  • 2-4 unit owner-occupied homes
  • Condos that are previously approved by the VA
  • New construction home (if the builder is not VA approved be sure to take care of that asap)

The rules state that the veteran must intend to live in the home as their primary residence. For those of you looking to secure an investment property with a VA mortgage, you will have to owner-occupy one unit and then you can rent out the rest. Available for 2-4 unit properties.

Funding Fee

It was mentioned earlier that the loan will allow eligible veterans to buy a home with no down payment and also waive the requirement for private mortgage insurance. In order to guarantee the loans for approved lenders, the VA needs available funds to cover an existing mortgage if the payments are not made and the home is foreclosed. These funds come from the funding fee.

When a veteran, members of the National Guard, or reserves uses the VA mortgage for the first time, a fee of 2.3% will be applied. This fee is added to the loan amount, allowing the veteran to pay the fee over time. If a veteran uses a VA mortgage a second or subsequent time, the funding fee will go up to 3.6%.

VA Debt-to-Income – Paying for the Mortgage

Besides the military service and credit requirements, the other important qualification for the Florida VA mortgage is the debt-to-income calculation.

The lender will calculate the borrower’s monthly debt requirements from their credit report. Added to that amount will be the proposed mortgage payment, including escrow for home insurance and property taxes. The rules state that the calculation should be 41% or lower.

For example, a veteran has a salary of $70,000 per year. Their current monthly bills are a car loan of $437, credit card payments of $208, and a proposed home payment, including escrow, of $1,123.

So, the calculation would be

Annual salary $70,000
Salary divided by 12 $5,833
Total debts ($437 + $208 + $1,123) $1,768
Debt to Income ratio ($1,768 / $5,833) 30%

There are one other criteria that need to be met after meeting the debt to income ratio called the residual income.

The residual income indicates how much money a veteran should have left after paying their debt and housing payment. The residual income amount is based on the number of people living in the home, the size of the VA mortgage, and location. With these figures, the lender can predict whether or not the borrower is a good risk for the loan.


The VA loan can be used beyond simply buying a home. The program will allow refinances as well. There are 3 ways to refinance VA loan in Florida:

  • Cash-out – this is where a borrower can take advantage of the built-up equity in the home. The loan to value ratio will be based on the borrower’s credit score and debt to income ratio.
  • Streamline – Mortgage rates move in cycles. Some years they are up and some years they are down. When the rates drop, people with existing VA home loan can choose to refinance in order to take advantage of the better interest rate. The streamline refinance has less paperwork and is usually a much faster loan process.
  • Refinance from another loan to VA mortgage – if an eligible veteran used a different type of mortgage to purchase their home and would like to take advantage of the VA home loan program, they are welcome to do so.

The various refinance options make it easy to either keep a VA loan or use a VA mortgage to remove an existing loan.

Summing Up The VA Loan

With the no money down option, competitive interest rates, and no private mortgage insurance, it is easy to see why eligible veterans choose the VA loan as a way to purchase a home.

Important Disclosure

VA loans are only available to eligible veterans and/or their spouses.

Madisonmortgageguys.com is not acting on behalf of or at the discretion of the Department of Veteran Affairs or the Federal Government.

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