VA Home Loans in Memphis, Tennessee

One cost that makes VA loans different from most conventional mortgages is the VA funding fee.

The funding fee is a one-time charge that helps support the VA home loan program and allows it to continue offering benefits such as no down payment in many cases and no monthly private mortgage insurance.

Not every VA borrower has to pay it.

For a VA purchase loan, the amount depends primarily on whether you've used your VA home loan benefit before and how much money you put down.

First Use of Your VA Benefit

Less than 5% down: 2.15%

5% or more down: 1.50%

10% or more down: 1.25%

After Your First Use

Less than 5% down: 3.30%

5% or more down: 1.50%

10% or more down: 1.25%

This means making a down payment isn't required in many VA purchases, but a buyer who chooses to put at least 5% down may qualify for a lower funding fee.

Not necessarily.

If you're required to pay the VA funding fee, you can generally pay it at closing or finance it into your VA loan.

Financing the fee allows you to avoid paying that amount upfront, although it increases the total amount you're borrowing and will affect your monthly payment.

This is especially important because many Veterans do not have to pay the funding fee at all.

You may be exempt if you:

• Receive VA compensation for a service-connected disability
• Are eligible to receive VA compensation for a service-connected disability but receive retirement or active-duty pay instead
• Receive certain Dependency and Indemnity Compensation as a surviving spouse
• Received a qualifying pre-discharge disability rating before closing
• Are an active-duty service member who received a Purple Heart on or before the loan closing date

Your lender will verify your funding-fee status as part of the VA loan process.

The savings can be significant.

For example, on a $400,000 first-use VA purchase with no down payment, a 2.15% funding fee would equal $8,600.

A qualifying Veteran who is exempt from the funding fee would not have to pay or finance that $8,600.

That's why determining whether you're exempt should be part of the conversation early in the VA home-buying process.

The funding fee is a one-time charge.

Unlike mortgage insurance associated with some other low-down-payment loan programs, VA loans do not require monthly private mortgage insurance.

For many buyers, that can make a significant difference in both the monthly payment and the long-term cost of owning the home.

The VA appraisal is one of the most misunderstood parts of buying a home with a VA loan.

Some buyers worry that a home has to be nearly perfect to qualify for VA financing. Sellers sometimes hear “VA loan” and assume the appraisal will be unusually difficult or that they'll be required to make a long list of repairs.

Neither is an accurate way to look at it.

After you have a home under contract, your lender will order an appraisal from a VA-approved appraiser.

The appraisal has two important purposes:

1. Determine the home's reasonable market value
2. Determine whether the property meets the VA's Minimum Property Requirements

The VA isn't expecting you to buy a brand-new or perfect house.

The goal of the Minimum Property Requirements is to make sure the home is generally safe, structurally sound, and sanitary.

The appraiser will consider the overall condition of the property and identify readily apparent conditions that don't meet VA Minimum Property Requirements.

Depending on the home, potential concerns could include things such as:

• Safety hazards
• Structural concerns
• Inadequate or unsafe access to the property
• Problems with essential utilities or building systems
• Conditions affecting sanitation
• Certain roof or moisture-related issues
• Peeling or defective paint when applicable to VA requirements
• Other readily apparent conditions that could affect whether the property is safe, sound, and sanitary

If a condition doesn't meet VA requirements, repairs may need to be completed before the loan can close.

Absolutely not.

VA guidance specifically distinguishes genuine property-condition concerns from cosmetic issues and normal wear and tear.

An older kitchen, dated bathroom, worn carpet, ugly paint color, or other cosmetic issue does not automatically make a house ineligible for VA financing.

That's an important distinction when we're looking at homes.

A house doesn't need to be completely updated. It needs to satisfy the applicable VA property requirements.

If the VA appraiser identifies a condition that must be corrected to meet the Minimum Property Requirements, the appraisal may be made subject to completion of that repair.

How we handle it will depend on the property, the purchase contract, the seller, and the specific repair involved.

In some situations, the seller may agree to make the repair. In others, we may need to negotiate a solution before moving forward.

This is one reason having a real estate agent who understands VA financing matters. Identifying potential VA property-condition concerns while we're looking at homes can help us address issues before they become surprises later in the transaction.

This is extremely important.

A VA appraisal does not replace a professional home inspection.

The VA appraiser isn't performing the same comprehensive evaluation that a home inspector performs. The appraisal focuses on value and VA Minimum Property Requirements.

A home inspector performs a much more detailed examination of the property's condition and can help identify defects, maintenance concerns, and potential problems that may not be part of the VA appraisal.

Even when a property satisfies the VA appraisal requirements, I strongly recommend that buyers have a professional home inspection performed.

A low appraisal doesn't necessarily mean the transaction is over.

Depending on the circumstances, there may be several options, including:

• Asking the seller to reduce the purchase price
• Providing additional comparable sales and requesting a Reconsideration of Value
• Negotiating another solution with the seller
• Choosing to pay some or all of the difference between the appraised value and purchase price when appropriate

VA buyers also have an important appraisal-related protection built into the VA purchase process, which we'll explain later on this page.

VA financing was created to help Veterans and service members become homeowners, not to make buying a home unnecessarily difficult.

The key is understanding the requirements before you make an offer.

When we're looking at homes together, I'm not just helping you decide whether you like the house. I'm also looking at the property through the lens of your financing and watching for conditions that could potentially become an issue with a VA appraisal.

If we see something that concerns us, we can talk about it before deciding how to move forward.

A VA appraisal and a home inspection are two completely different things, and having a VA appraisal does not eliminate the need for a professional home inspection.

The VA appraisal is ordered by your lender and performed by a VA-approved appraiser.

Its primary purposes are to:

• Determine the home's reasonable market value
• Confirm that the property meets VA Minimum Property Requirements
• Identify readily apparent conditions that may affect whether the home is safe, sound, and sanitary

The appraiser is not performing an in-depth inspection of every component of the house.

A home inspection is performed for you, the buyer.

A professional home inspector takes a much closer look at the condition of the property and its major components and systems. The inspection can uncover defects, maintenance issues, safety concerns, and potential future expenses that may not be identified during the VA appraisal.

I strongly recommend it.

Think of them this way:

The VA appraisal helps determine whether the property and its value meet VA loan requirements.

The home inspection helps you understand what you're actually buying.

A house can pass a VA appraisal and still have issues that you need to know about before purchasing it.

That's why I don't consider the VA appraisal a substitute for a thorough home inspection. The inspection gives us information we can use to evaluate the property, understand potential expenses, and make informed decisions before moving forward with the purchase.

One of the advantages of VA financing is the flexibility it can provide when negotiating closing costs with a seller.

And there is an important VA rule that is often misunderstood.

You may have heard that a seller can only contribute up to 4% toward a VA buyer's closing costs.

That's not exactly how the rule works.

VA distinguishes between normal closing costs and what it defines as seller concessions.

A seller can agree to pay some or all of a VA buyer's allowable normal closing costs. Those payments are not included when calculating the VA's 4% seller-concession limit.

Depending on the transaction, the buyer and seller may negotiate payment of costs such as:

• Loan origination fees
• Discount points
• VA appraisal fee
• Title-related expenses
• Recording fees
• Certain taxes
• Hazard insurance
• Other allowable closing costs

Exactly which expenses apply will depend on the property, lender, contract, and individual transaction.

The VA's 4% limitation applies to certain benefits it specifically considers seller concessions.

Examples can include:

• Paying the buyer's VA funding fee
• Paying certain prepaid property taxes or insurance
• Funding certain temporary interest-rate buydowns
• Paying off certain credit balances or judgments for the buyer
• Other items of value provided by the seller that fall within the VA's definition of a concession

The total of these seller concessions generally cannot exceed 4% of the home's established reasonable value.

Normal allowable closing costs and normal discount points are not included when determining whether that 4% limit has been exceeded.

Potentially, quite a bit.

Imagine you're purchasing a home and have enough money for the closing costs, but you'd rather keep more of that money in savings after you move.

Depending on the market and the seller's negotiating position, we could potentially structure an offer asking the seller to contribute toward allowable closing costs.

That could leave you with more of your own money available after closing for moving expenses, furniture, repairs, emergencies, or simply maintaining a stronger cash reserve.

It's important to understand that the VA allows these contributions. It doesn't require a seller to agree to them.

Whether asking for seller-paid costs makes sense depends on the individual property and the market.

On a home that has been sitting on the market with little activity, we may have considerably more negotiating leverage than we would on a brand-new listing with multiple offers.

That's why I don't believe in using the exact same offer strategy for every VA buyer or every house.

We'll look at the property, the competition, your financial situation, and what's most important to you, and then structure an offer designed around that particular situation.

Getting an offer accepted is important.

But so is making sure the structure of the purchase makes sense for you after closing.

Your VA benefit gives us several tools to work with. My job is to help you understand those options and work with your lender to build the strongest overall strategy for your purchase.

One concern I sometimes hear from Veterans is:

“Will using a VA loan make my offer less competitive?”

It shouldn't.

A well-qualified VA buyer can make a very strong offer. The key is understanding the financing, anticipating potential concerns, and structuring the offer around the particular property and market conditions.

Before we begin seriously shopping for a home, I want you connected with a lender who understands VA financing and can provide a solid preapproval.

That accomplishes two things.

First, it helps us understand your actual purchasing power before we start looking at homes.

Second, when we submit an offer, we can show the seller and listing agent that your financing has already been reviewed by a lender and that you're prepared to move forward.

VA loans sometimes have a reputation for taking longer than other types of financing.

That reputation shouldn't automatically determine how a seller views your offer.

A smooth transaction depends on many factors, including the lender, appraisal, property condition, buyer documentation, title work, and communication between everyone involved.

Working with an experienced VA lender and staying ahead of the process can help keep the transaction moving.

Every situation is different.

A home that's been on the market for 45 days with no offers gives us a very different negotiating position than a home that was listed yesterday and already has multiple offers.

Before deciding how aggressively to structure your offer, we'll look at things such as:

• How long the home has been on the market
• Recent comparable sales
• Whether there are competing offers
• The condition of the property
• Potential VA property requirement concerns
• How much seller assistance, if any, you need
• Your available cash and comfort level
• How badly you want that particular home

Then we can decide what makes sense.

Some sellers and even some real estate agents still have misconceptions about VA loans.

They may believe VA financing takes longer, that the appraisal is unusually difficult, or that a seller will automatically be responsible for expensive repairs.

Those assumptions aren't necessarily true.

Part of my job when representing a VA buyer is making sure the other side understands the strength of the offer and doesn't dismiss it simply because the buyer is using the benefit they earned through military service.

Price matters, but it isn't the only thing a seller considers.

Depending on your situation, we may be able to strengthen an offer through the closing timeline, earnest money, inspection terms, seller possession needs, limiting unnecessary requests, or other contract terms.

The right strategy depends on the house and your individual circumstances.

I don't believe in automatically giving away important buyer protections just to make an offer look stronger.

The goal is to make your offer as attractive as reasonably possible without exposing you to risks you don't fully understand.

The appraisal is another area where strategy and experience matter.

If a VA appraiser believes the available market data may not support the contract price, there is a process known as the Tidewater Initiative that can provide an opportunity for additional comparable sales information to be considered before the appraisal is finalized.

If the final VA value still comes in below the contract price, there are several potential options.

We may be able to renegotiate the price, provide additional market data through the Reconsideration of Value process, or determine whether paying some of the difference makes sense for you.

And VA buyers have an important additional protection if the home's VA reasonable value comes in below the contract price.

Using a VA loan shouldn't be something you apologize for when making an offer.

It's a home loan benefit you earned through your service.

My job is to understand how that financing works, communicate effectively with everyone involved in the transaction, and help you put together the strongest offer we reasonably can while protecting your interests along the way.

If you're an active-duty service member or Veteran buying a home in the Memphis area, you may be able to combine the benefits of your VA home loan with Homes for Heroes.

These are two completely separate programs.

Your VA loan is a federal home loan benefit earned through your military service. Homes for Heroes is a program designed to give back to those who serve their communities and our country, including military members and Veterans.

You don't have to choose between them.

I'm a local Homes for Heroes Affiliate Realtor serving the Memphis area.

When you work with me to purchase a home through Homes for Heroes, you can receive a Hero Rewards® check after closing.

It's real money sent to you after the transaction is complete, and you can use it however you'd like.

For example, on a $400,000 home purchase, your Hero Rewards check would be approximately $2,800.

That money could go toward moving expenses, furniture, home improvements, rebuilding your savings after closing, or anything else you choose.

And it doesn't replace or interfere with the benefits of your VA financing.

Homes for Heroes isn't a loan.

It isn't down payment assistance.

There is nothing to repay.

It's simply a way to say thank you for your service while helping you save money when you buy or sell a home.

Using a VA loan comes with some unique considerations, from entitlement and the VA appraisal to property requirements and structuring a competitive offer.

Homes for Heroes adds another benefit to the equation.

My goal is to help you understand all of the benefits available to you and make sure we're taking advantage of every opportunity that makes sense for your purchase.

If you've served our country, you've earned these benefits.

Let's make sure you know how to use them.

Choosing the right home is important. So is choosing a real estate agent who understands how your VA financing affects the purchase from beginning to end.

I've been helping buyers and sellers throughout the Memphis area since 2014, and I've made serving Veterans, active-duty military members, first responders, healthcare professionals, and other local heroes an important part of my real estate business.

A VA loan isn't just something we think about when it's time to apply for the mortgage.

It can affect which homes we consider, how we structure your offer, how we evaluate potential property-condition concerns, how we handle the VA appraisal, and how we negotiate with the seller.

I'll work alongside your lender throughout the transaction so we're all working toward the same goal.

I was born and raised in Memphis and have spent most of my life here.

I know the communities, neighborhoods, and real estate markets throughout Memphis and the surrounding area, and I'll help you look beyond the listing photos and evaluate the things that matter when deciding where and what to buy.

I'm proud to be a Homes for Heroes Affiliate Realtor, but my connection to the hero community goes beyond real estate.

My wife, Andrea, has been a nurse in Memphis since 2006. I've seen firsthand the long hours, sacrifice, and commitment that come with a career built around serving others.

That's one of the reasons Homes for Heroes means so much to me.

Veterans, active-duty military members, first responders, healthcare professionals, teachers, and others spend their careers serving our country and our communities. I consider it a privilege to have the opportunity to serve them when it's time to buy or sell a home.

Military members and Veterans who work with me through Homes for Heroes can receive a 

Hero Rewards® check after closing while still taking advantage of their VA home loan benefit.

My goal is to make sure you understand the benefits available to you and don't leave an opportunity on the table simply because no one told you about it.

Buying a home is a big decision, and I don't believe my job is to talk you into one.

If I see something that concerns me, I'll tell you. If I think we're overpaying, we'll talk about it. If a house doesn't make sense for your goals, I'm not afraid to say so.

My job is to give you the information and advice you need to make a confident decision, then represent you and protect your interests every step of the way.

Whether you're ready to buy now or simply want to understand what your VA home loan benefit could make possible in the Memphis market, I'd be happy to talk with you.