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Page 1 of 2 VA loans generally do not require that the
borrower provide a downpayment. However, the
borrower may need funds to cover closing cost or
to cover the difference between their loan amount
and the purchase price. The may be the case with
loans that are considered to be VA Jumbo
loans.
Veterans can also reduce their VA
funding fee by making a downpayment.
Funds for downpayments and closing cost must be
verified by the lender. The verification may
come from:
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original or certified true copies of the
applicant's last two bank/stock/mutual funds
statements.
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the borrower's bank statements available to
them by Internet or faxed from the depository
directly to the lender. In cases where the
lending institution uses Internet based
verifications, ensure the URL appears on the
document.
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Proceeds from the sale of other Real Estate
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Stocks. Bonds Mutual Funds
Cash on Hand:
Another area where low- to moderate-income
borrowers sometimes differ from others is the
source of funds to close loans. It is not
unusual or unacceptable for some borrowers to
save money at home versus using depositories.
In order to be acceptable, a reasonable
explanation of how the borrower saved the funds
should be provided.
OTHER DOWNPAYMENT ISSUE
Because VA loans can be for the full
reasonable value of the property, no
downpayment is required by VA except in the
following circumstances:
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If the purchase price exceeds the reasonable
value of the property, a downpayment in the
amount of the difference must be made in cash
from the borrower's own resources.
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Also, VA requires a downpayment on all
GPMs.
If a veteran has less than full entitlement
available, a lender may require a downpayment in
order to make the veteran a loan that meets GNMA
or other secondary market requirements. The "rule
of thumb" for GNMA is that the VA guaranty, or a
combination of VA guaranty plus downpayment
and/or equity, must cover at least 25 percent of
the loan.
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Qualifying 
