Subsided Interest Rates
The ODVA funds the ODVA home loan through the issuance of tax-free, state general obligation bonds called Qualified Veterans Mortgage Bonds (or QVMB). Their rates are adjusted with the current conventional market rate but because of the bonds the rates are typically .5% to .75% lower than the current market value for federal VA rates. Contact Associated Mortgage Brokers for a current ODVA rate quote.
No Funding Fee
Unlike the federal VA loan program, the ODVA loan program does not require a funding fee. Veteran’s that are familiar with or have used the federal VA program may be familiar with the funding fee – a fee that is usually built into the loan amount and charged to the veteran at closing. This fee can range from 1.5% to 3.3% of the loan amount depending on certain criteria. This fee does not apply with the ODVA loan program!
ODVA Services the Loan
Typically, the servicing for VA (and conventional) loans is sold shortly after the loan closes. With the ODVA home loan, you’ll have local servicing because not only does the ODVA own of the loan they also will service the loan through their facility in Salem, Oregon.
Current Oregon Residency Not Required!
The ODVA loan is designed for Oregon veterans, but Oregon Residency is not required at the time of application. Veterans re-locating to Oregon from out of state qualify for the loan as long as they intent to occupy the residence as their primary residence within 60 days of purchase.
Common Sense Underwriting
Because the ODVA retains the servicing of the ODVA home loans for the life of the loan they have more flexibility with their underwriting. The ODVA follow the Fannie Mae guidelines but are able to make adjustments and exceptions that are not possible with the federal VA or conventional loans making it possible for veterans to get a loan that might not otherwise be possible.
Are the ODVA home loan and Federal VA loan the same?
No, the ODVA loan program is separate from the federal VA loan program and offers different benefits. The main difference is that the federal VA program is a guaranty, not a loan. The federal VA does not do the loan (a lender offering a VA loan does) but the VA guarantees the top 25% of the loan in the event of default. Because the loan is funded by the lender, the servicing can be transferred to difference servicers and the loan can be sold to different investors. With the ODVA home loan, the ODVA funds the loan with their own money and the loan is never transferred or sold.
Why is the ODVA home loan only for purchases and not refinances?
The restriction to purchase transaction has to do with the way the ODVA loan program is funded, which is the use of Qualified Veterans Mortgage Bonds (QVMB). OVMBs are considered “tax preferred” to investors. Legislation implements by the IRS has placed limitations on the use of “tax preferred” funds. One of those limitations under Oregon tax laws is that the proceeds of QVMB bonds sales can only be used for home acquisitions, not for refinancing existing mortgage loans.
Is there a loan limit?
Yes, the ODVA home loans program requires a 5% down payment and follows the Fannie Mae lending limit.
Can I get 100% financing?
No, the maximum loan to value (LTV) amount is 95% of the home value. ODVA home loans above 80% of the LTV will include Private Mortgage Insurance.
Can I used gift money for down payment?
Yes, but those funds need to be documented and transferred from an acceptable source with a clear documentation that there is no obligation to repay.
How many ODVA loans can I have?
An eligibly veteran can only have one loan with a balance at a time but they may use the ODVA home loan program up to four separate times.
Can I get an ODVA loan if I have had a previous foreclosure or short-sale?
Possibly. This will depend on the time since the foreclosure and the ability to show current credit-worthiness. We can run this on a case by case basis. If you have questions, call Associated Mortgage to discuss the scenario!
Are spouses eligible for the home loan benefit?
Spouses and registered domestic partners may jointly apply for the ODVA home loan with the veteran but they are no eligible for the program on their own.
What are my monthly payment options?
All ODVA home loans are originated with a monthly payment schedule. Partial payment options are not available. Payments can be made by check/money order or the ODVA can draw funds from the borrowers account on the 5th of each month.
What type of properties can I purchase with the ODVA home loan?
For a property to qualify for an ODVA home loan it needs to be an owner-occupied, single family primary residence which includes manufactured homes on owned land, condominiums and stick-built homes. Personal property manufactured homes, multi-family units, commercial and agricultures properties do not qualify for ODVA home loan financing.
To qualify for the ODVA home loan, veterans must have served on active duty, documented by a DD214, with the United States Armed Forces and meet one of the following criteria:
Service Criteria #1
- Beginning on or before January 31, 1955 served more than 90 consecutive days and was discharged or released under honorable conditions; or
- Beginning after January 31, 1955 served more than 178 consecutive days and was discharged or released under honorable conditions; or
- Served 178 days or less and was discharged or released under honorable conditions because of a service-connected disability; or
- Served 178 days or less and was discharged or released under honorable conditions and has a disability rating from the United States Department of Veterans Affairs; or
- Served at least one day in a combat zone and was discharged or released from active duty under honorable conditions.
Service Criteria #2
- Received a combat, campaign or expeditionary ribbon or medial for service and was discharged/released under honorable conditions.
Service Criteria #3
Is receiving nonservice-connected pension from the United States Department of Veterans Affairs