The One VA Sentence That Changed What Aiden Thought He Needed in the Bank
Aiden lives near Fort Stewart, and he was about to wait another year to buy a home. Then he read one sentence in the VA guideline that he had never heard anyone mention. That sentence changed what he thought he needed in the bank.
Aiden is a fictional Veteran, an illustration of a situation that comes up often. He is not a real client. But his belief is very real, and I hear versions of it all the time: that a Veteran must have months of mortgage payments saved after closing before a lender will even look at the file.
The belief that kept Aiden waiting
Aiden figured the safe move was to keep renting and keep saving. He pictured a lender asking to see a cushion of payments sitting in the account after the keys changed hands. Nobody had told him otherwise, and everybody he talked to seemed to assume the same thing. So he planned to wait another year.
The problem is that waiting has its own cost, and he was doing it over a rule he had never actually read.
What the VA guideline actually says
The VA guideline is plain on this point: "VA does not require the borrower(s) to have additional cash to cover a certain number of mortgage payments, unplanned expenses or other contingencies on the residence or refinance of the Veteran's residence."
Read it slowly. VA does not require additional cash to cover a certain number of mortgage payments. It does not require a cushion for unplanned expenses. It does not require one for other contingencies. That is the agency's own language, and it is the sentence Aiden had never heard anyone mention.
What the guideline does still require
Here is where people get tangled, so let me be careful. The same section says the borrower must have sufficient cash assets to cover any closing costs, pre-paids or discount points which are the borrower's responsibility and are not financed into the loan. It also covers the difference between the sales price and the loan amount if the sales price exceeds the reasonable value established by VA.
So Aiden does need cash. He needs cash for the costs of closing that fall on him. What VA does not set is a number of months of payments to hold in reserve afterward.
Where the confusion comes from
The guideline also says the borrower's ability to accumulate liquid assets, and the current availability of liquid assets for unplanned expenses, should be considered in the overall credit analysis. That means assets can matter to a lender's decision. But being considered in an overall analysis is not the same as a required number of months. One is a factor. The other would be a rule.
When a request for a reserve cushion shows up, the honest question is whether it is VA's requirement or the individual lender's own requirement. Both can exist. Aiden deserves to know which one he is looking at.
The question to ask your lender
This is the tactical piece you can use today. Ask your lender: "Which part of the cash you are asking me to show is required by the VA guideline, Chapter 4, Topic 4, Subsection a, and which part is your own requirement?"
If more is requested than the guideline requires, ask where it comes from in writing. You are not being difficult. You are asking a lender to show its work, and a clear answer lets you decide whether to proceed, adjust, or compare another lender.
What Aiden does next
Aiden stops asking how many months of payments he has to save. He starts asking what is actually required, and what is simply preferred. That shift moves him from waiting on a guess to working from the guideline.
If you are a Veteran near Fort Stewart, or anywhere else, and you have been holding off because of the same belief, you do not have to guess either. As a mortgage broker I can look across multiple wholesale lenders, and I find the path. Call me at 843-LOW-RATE and we will go through what the guideline asks for and what it does not.
Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.
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