Known as Vacationland, Maine is one of the happiest and safest places to live. They even launched a program in 2016 to try and recruit vacationers to move to the state full time – “Visit for a Week, Stay for a Lifetime,” is a program funded by Maine-based businesses that will reimburse people’s Maine vacation expenses if they choose to move there.
If you happen to be one of those lucky visitors or are looking to move to or within the state of Maine, you’re probably considering your housing options. If you’re a veteran or active service member, you ought to be considering a VA loan.
VA loans, short for Veterans Affairs loans, are home loan options fully guaranteed by the U.S. Department of Veterans Affairs and the federal government. The government does not finance the loan, but their backing of the loan makes it all the more appealing to private lenders.
The benefits of the VA loan are numerous, but the highlights include:
- $0 down payment
- No mortgage insurance
- No minimum credit score requirement
- One-time VA funding fee (those with VA disability compensation are exempt)
- VA staff assistance if you become delinquent on your loan
These lending terms are highly appealing, which is why there are certain qualifications an applicant must meet in order to be eligible. As a guide, use the following checklist as you learn more about VA loans in the Maine.
VA Loan Qualifications
As implied by the name, VA loans are for veterans and active service members in the United States military. There are certain service term requirements, as well exceptions. To be deemed eligible for a VA loan in Maine, you must obtain a Certificate of Eligibility (COE) through your lender or through the VA’s eBenefits portal.
Before seeking out a COE, here are the general rules for who is qualified for a VA loan in Maine or any state.
- 90+ days of active duty service during a time of war, unless discharged for a service-related disability
- 181+ days of continuous service during peacetime, unless discharged for a service-related disability
- 6 years of service in the Reserves or National Guard
- Un-remarried spouse of a veteran killed or missing in action
- Individuals with service as members in certain organizations, such as Public Health Service officers, cadets at the United States Military, Air Force or Coast Guard Academy, midshipmen at the United States Naval Academy, officers of the National Oceanic & Atmospheric Administration, merchant seaman with World War II service
- Other special circumstances
Selecting a Type of VA Loan
VA loans should only be considered for financing your primary residence. Types of residences that are covered by VA loans includes single family, condos and multi-family. They can also be used to build a home, purchase and renovate a home simultaneously, or refinance previous loans.
To select the right type of VA loan for your Maine home purchase, it helps to understand the four primary offerings.
- Purchase loan – the standard financing option for those looking to buy or build a home
- Refinancing loan – a refinancing VA loan can be valued for up to 100% of the equity of your home
- Renovation loan – with a renovation VA loan in Maine, you can simultaneously purchase and renovate a home with funds guaranteed by the VA. This is possible because the financing amount is based on the “after-improvement” expected value of the property
- Interest Rate Reduction Refinance loan – for borrowers with a current VA loan, this loan allows you to obtain a line of credit without a home appraisal or income documentation. This loan is designed to help you improve your interest rates
Meet Maine-Specific VA Loan Requirements
Maine has very few extra hoops to jump through when applying for a VA home loan. The state does require you to get a Reasonable, Tangible Net Benefit Disclosure as required by the “Act to Protect Maine Homeowners from Predatory Lending” enacted in 2007 after the housing crisis.
This form is intended to protect you, the borrower, from what is known as “flipping” your mortgage – the making of a higher-priced mortgage loan (the “new loan”) to a borrower who refinances an existing residential loan when the new loan does not result in a “reasonable, tangible net benefit” to the borrower.
Your Maine VA loan lending partner an provide you with more information regarding this form requirement.
Check Maine VA Loan Limits
Technically there is no lending limit for VA loans. However, each state has their own lending limits for financing options that elect to go with a $0 down payment. For a VA loan in Maine, here are the county-by-county maximums:
- Androscoggin County $484,350
- Aroostook County $484,350
- Cumberland County $484,350
- Franklin County $484,350
- Hancock County $484,350
- Kennebec County $484,350
- Knox County $484,350
- Lincoln County $484,350
- Oxford County $484,350
- Penobscot County $484,350
- Piscataquis County $484,350
- Sagadahoc County $484,350
- Somerset County $484,350
- Waldo County $484,350
- Washington County $484,350
- York County $484,350
If you’ve done your homework and checked the boxes, you’re ready to begin the VA loan application for a real estate purchase in Maine. The next step would be to talk to a Maine Licensed Loan Officer about your options and what to do next.
The team at Blue Water Mortgage has years of experience handling the many types of home loans available, including VA loans. If you would like to learn more or start your application process, please contact us.