You should never use a VA loan without knowing this. My name is Evan Kaufman, your VA loan originator, and I’ve been helping folks either buy real estate or do their mortgages as a mortgage officer for years.

The VA loan is a special area that has been our niche, working with a lot of active duty military families to buy and then help finance their homes.

One thing that you should know whenever you’re about to use a VA loan is the fact that the VA actually does not fund VA loans.

This is something that’s a big misnomer out there. A lot of folks assume they’ll say, “Hey, the VA said this,” or “The VA did that.” The reality is – the VA loan is actually not funded by the VA.

The real name for a VA loan is called the VA home loan guarantee. Think of it more as an insurance policy.

What does that exactly mean?

Well, it means that lenders technically are lending you the money, and the VA is just guaranteeing the lenders.

That further means that every lender is choosing if what they say to you is a yes or a no; they make that choice themselves.

So, the VA kind of sets their standard guidelines, and they tell us as lenders, “Hey, you know, Evan and other lenders, if you meet these guidelines, we’ll go ahead and offer that guarantee” – meaning that if, for some reason, the veteran defaults, we will cover a certain percentage of any of the losses.

But they just set their basic guidelines, so we’ve got to make sure it achieves those guidelines. Every lender, one, treats those guidelines sometimes slightly differently, but two, will often add their own loan requirements on top of that.

So, if there’s one thing you should know, it’s the fact that every lender treats a VA loan slightly differently, which is different from a lot of other loan types where things are relatively common.

The VA loan has some of the broadest restrictions, or no restrictions, depending on the lender that you work with. For example, credit score.

What matters?

Well, some folks will call and say, “Evan, they told me I couldn’t get it because the VA said my credit score wasn’t high enough.”

Well, the VA didn’t necessarily say that; it was specific lenders.

So know that those things—credit score, how income is calculated, how you ultimately are treating taxable versus non-taxable pay that you’re getting—all can be different lender by lender.

Can you use a VA loan to build a home, to do a construction loan?

Depends on who you’re talking with.

So just know that the VA loan is really more of a guarantee, like an insurance policy.

Lenders are the ones technically giving you the money, which means you want to work with someone that understands it, that you trust, and if you’re told no by someone, maybe someone else can work with it. You always want to ask that question.

My name’s Evan Kaufman, your VA loan originator. Hope this just helped dispel another myth about the VA loan. Take care.