VA Loans for Civilians

Kirk Haverkamp
Written by
Kirk Haverkamp
Read Time: 2 minutes

The VA gives loans to military members with far more favorable terms than are offered in the conventional housing market. Did you know there's also a program for civilians to get VA loans?

No one has been spared by the recent collapse of the mortgage market, including our treasured veterans. Unfortunately, there are many homes that have been foreclosed on by the U.S. Department of Veteran's Affairs. Once they're the property of the VA, they are pooled together and become available for sale, not only to military personnel, but to civilians, as well. The Vendee Financing Program offers homes that can be funded with no money down if the home is owner-occupied, and can be financed with only 5 percent down if it isn't occupied.

Advantages of VA loans

A civilian owner who buys through the Vendee Financing Program will receive the same benefits as veterans. These include low interest rates, and the opportunity not to be penalized by a poor credit history. This can be a real boon if you've applied for traditional financing, and have been turned away because your credit score and history are not as stellar as they should be. Even though they have lower standards, the VA still requires that you be an acceptable credit risk.

You also must show that you have sufficient income to comfortably meet the loan payments each month and keep all taxes up-to-date. But if you don't have enough funds coming in each month to maintain the property and keep the house up to snuff, you may not qualify for the loan.

There are other perks that are affiliated with VA loans that civilians can now take advantage of. The seller is allowed to give up to 6 percent of the sale price to help the borrower pay for closing costs. This money can also go towards the VA Funding Fee, a requirement that's 2.25 percent of the loan amount.

Opportunity for real estate investors

This program offers great options for real estate investors. First, there's no limit to the number of properties that you can purchase as investments. Second, you can finance these houses with a down payment of as little as 5 percent. There is one serious requirement, though - this can't be your first attempt at real estate investing. The VA will require that you have had experience managing rental properties prior to them forking over new money to you.

If you're interested in scouting out the possibilities, you can find a list of VA homes that are available for sale to civilians at

In the past, you may have admired the fact that the VA made it easier for military personnel to own homes by offering them loans with preferential terms. If you buy a home through the Vendee Financing Program, you can take advantage of those same terms, without ever having risked your life overseas.

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