Can VA Status Help An FHA Borrower?
Follow on 
For many years VA-qualified borrowers could obtain FHA financing with a lower downpayment. The way the system worked, FHA borrowers were required to have a down payment equal to 3 percent of the first $25,000, 5 percent of the next $100,000, and 10 percent of everything higher. With a VA certificate, the 3 percent down on the first $25,000 was waived. In effect, closing costs were cut by $750 ($25,000 x 3 percent) because of the lower down payment requirement — but the loan amount increased by $750 (because less was being put down at closing.)
Also, under Section 222, (National Housing Act — 12. U.S.C. 1715m), the government through the Department of Commerce and the Department of Transportation would pay monthly FHA insurance premiums for Coast Guard personnel and members of the National Oceanic and Atmospheric Administration on active duty. This program, however, has now been suspended, according to HUD.
The FHA has now gone to a new downpayment schedule and it is unclear whether any benefits for VA-qualified personnel have been maintained. Please check with lenders for the latest details.
© Copyright 