Military Real Estate Opportunity: VA-owned Properties for Sale

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A VA Real Estate Owned (REO) property can become the possession of the VA after a home is foreclosed and a third party does not purchase at the foreclosure sale. There are many types of VA REO properties available including single family, condos, townhomes and multi-family dwellings. A list can be obtained here.

Both veterans and non-veterans can purchase VA-owned properties. How a property is financed is the buyer’s choice. Often a VA loan is used, and sometimes other means are used to pay for VA-owned properties.

One popular option is the VA Vendee Financing program. The Vendee loan product is offered only to individuals wishing to finance VA REO properties. Vendee Financing Quick Facts:

  • Military and civilian buyers alike can apply for Vendee Financing
  • Owner occupancy and non-owner occupancy allowed
  • Homes to be owner-occupied can be obtained with as little as zero down
  • Non-owner occupancy requires 5% down or more and property management experience
  • Seller can pay up to 6% of the sales price in closing costs
  • VA Funding Fee is 2.25%
  • No private mortgage insurance
  • No pre-payment penalties
  • Appraisal is not required for underwriting
  • Vendee Financing can be obtained directly through the Veterans Administration
  • For non-owner occupancy, there is no limit to the number of investment properties
  • Assumable
  • Vendee financing has 15- and 30-year fixed-rate terms
  • VA REO properties are sold “AS IS” at or below fair market value

If the buyer is VA-eligible, then a military mortgage is a popular zero-down option for financing a VA REO property. Here are some quick VA loan facts:

  • Zero money down within conforming loan limits
  • No private mortgage insurance
  • No pre-payment penalties
  • VA Funding Fee from 0% to 3.3%
  • VA loans are made by approved lenders
  • Owner occupancy required
  • Assumable
  • VA appraisal required
  • Up to 4% of closing costs may be paid by seller

Though a minimum credit score is not published in either guidelines, both VA and Vendee borrowers must prove to be a good credit risk.

Click here for information on financing a VA-acquired property with a VA loan contact an experienced VA mortgage professional.

Veterans First is a trade name of Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank. I NMLS# 449042 I Equal Housing Lender

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