2022 Hawaii VA Loan Guide: FAQ’s & Tips
In our work as realtors in Hawaii, VA loan questions are some of the ones we get asked most often. There’s a lot of confusion around the VA loan, and in Hawaii -- a state with a high cost of living that’s OCONUS (outside the continental United States) -- there can be more uncertainty. We hope that this guide helps you as you navigate your move to Hawaii and decide whether to use the VA loan.
FAQ’s
What is the VA loan limit in Hawaii?
Good news! First-time loan users and those with fully-restored entitlements have no limit on their VA loan. Yep, you read that right. As of 2020, the VA loan limit has been lifted. That means you could buy a one-million dollar home, with no down payment. Of course, you still need to be able to pay the mortgage and fees. We’ll get into that below.
What are my fees on a VA loan?
Sure, there’s no down payment, but keep in mind you will have to pay a one-time, VA loan funding fee. This is a percentage of the loan amount and the rates have slightly increased for 2020. If it’s your first time using a VA loan or you have made a down payment, your fee will be slightly lower than if you’ve used one before. In addition, active military purple heart recipients and veterans with a 10% or more disability rating are exempt from paying the funding fee.
Check out this chart to see how much you can expect to pay.
Should I choose a local or national lender?
There are some great national lenders, but we HIGHLY recommend using a local lender. Local lenders are more accessible, especially here in Hawaii where we have a 2-3 hour time difference from the west coast and a 5-6 hour time difference from the east coast. This may seem like a small hurdle, but small hurdles can become big hills when you’re trying to close on a home in time! Need help finding a local lender? Feel free to reach out if you have any questions or if you want us to connect you to a local lender!
Can I use the VA home loan more than once?
Yes! If you sell your home or pay off your mortgage, you may be eligible for a VA loan. Just keep in mind, if you’ve already used the loan once, you’ll be subject to a slightly higher funding fee (see FAQ 2).
Can I have more than one VA loan at a time? Second entitlement
The answer to this question is tricky, but ultimately, yes. There are some caveats. You can get a second loan if you’ve paid off the first or if you have a remaining balance on your available entitlement.
For example, the county limit in Hawaii is $970,800. Let’s say you use $350,000 to buy a home on the mainland; you’ll have $620,800 to use on a second property (see reasons why you’d do this below) no money down. However, if you bought the home for $700,000, you could still use the remaining to buy a different property, but you’ll have to put 25% down -- this will be of the difference between the remaining entitlement and the higher purchase price. This is why it’s helpful to us a real estate agent that understands the VA home loan!
However, the VA loan is intended for active duty military and veterans to live in the homes they buy using it. So no, you can’t have a mansion in Florida and a beach house in Lanikai. But, if you’re looking to downsize or get a larger home and you have money left on your entitlement -- you can take out a second loan to make that purchase before selling your current residence.
Am I Eligible?
This is an important question. The VA loan is an amazing benefit, but not everyone qualifies for it. For eligibility you must have a good credit score, make a steady and sufficient income, and have a valid Certificate of Eligibility (COE).
For active duty military, you’ll have to complete 90 consecutive days of active duty service in order to establish eligibility.
Oh, and as we mentioned earlier, this home needs to be for your own personal occupancy. These loans aren’t for vacation homes or rentals. Here’s more information about eligibility.
It’s also important to note that after you’ve closed on a home, you’ll need to move in within 60 days. There are some exceptions (for example, for deployed service members), so be upfront about your timeline.
Helpful Tips
1. Know your credit score
This will allow you to determine your mortgage rate. The higher the score, the lower the rate! And, if you’re looking to improve your score, knowing it in advance will allow you to work on building it up while you plan to buy a home.
2. Loan pre-approval is essential
This allows you to go in with a clear understanding of how much you can afford. Imagine finding your dream home and then finding out it’s way out of your budget. What a bummer that would be!
3. Find an agent that understands the VA loan
We’re not just saying this because we’re military relocation specialists. We genuinely want you to find an agent who knows what they’re talking about. The VA loan has its own set of requirements and nuances that are very different from those of a civilian loan. Selling homes to the brave men and women in our military is an honor and we take that responsibility very seriously. Connect with us here!
PCSing to Hawaii? Don’t forget to check out our PCS Checklist and Oahu Neighborhood Guide.
