primary residence.
VA-backed Home Loan
A VA-backed home loan means the U.S. Department of Veterans Affairs guarantees — or stands behind — a portion of a veteran's loan from a private lender. If the veteran defaults on the loan and the home goes into foreclosure, the lender will recover some or all of their losses. Since these loans are less risky for the lender, they are more likely to loan the money and give those borrowers more favorable terms. Lenders follow VA guidelines when making VA-backed home loans. Still, they may also require borrowers to meet additional standards like having a high enough credit score or getting an updated home appraisal. There are three types of VA-backed home loans available to eligible veterans. Purchase loans—A purchase loan can be used by a veteran to buy or build a new home, buy a manufactured home or lot, buy a condo in a VA-approved project, buy a home with up to four units if the veteran plans to live in one, or even improve a home by adding new features like solar power to make it more energy efficient. Interest Rate Reduction Refinance Loan (IRRRL) - n (IRRRL) -An IRRRL is available to veterans who have an existing VA-backed home loan that they want to refinance under better terms to reduce monthly payments or make them more stable by switching from a variable or adjustable interest rate to a fixed one. Also known as a VA streamlined refinance, these typically require less paperwork than a traditional refinance and don’t require a new home appraisal. These loans require a one-time .5% funding fee plus any closing costs the lender requires, so be sure it makes financial sense to refinance your existing VA loan. Cash-out refinance loan—A Cash-out refinance loan allows a veteran to replace their existing home loan with a new one with
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