Home Loan FAQ's

COVID-19 update: The Oregon Department of Veterans' Affairs is committed to supporting our veteran home loan borrowers and being a source of assistance in this time of uncertainty. If COVID-19 has impacted your ability to make your mortgage payment, we're here to help. Please contact us at 1-800-633-6826 or 503-373-2373 for potential assistance options.

Borrowing

Can I borrow if I have had a previous foreclosure or short sale?

Possibly. The time since any major negative credit issue will be factored into the underwriting decision. Enough time must have elapsed to demonstrate good credit in the intervening period.

How much can I borrow?

ODVA home loans are currently limited to the Fannie Mae limit, or up to 95 percent of the purchase price or appraised value of the property — whichever is the lesser. For the limited refinance transactions available, no more than 80 percent of the home’s appraised value may be borrowed from ODVA.

Can I get 100 percent financing?

Currently, the maximum loan to value (LTV) amount is 95 percent for an ODVA home loan. ODVA home loans above 80 percent of the LTV must include Private Mortgage Insurance.

How many loans can I have?

Currently, an eligible veteran may use the ODVA home loan program up to four separate times, but may only have one loan with a balance at a time.

Can I use gifted money for a down payment?

Yes. However, such gifts must be documented and be transferred to the borrower or the closing agent prior to or at the close of escrow, without any obligation to repay.

What is the minimum credit score to get a loan?

ODVA does not have a minimum credit score requirement. Credit scores are only one component of the underwriting decision.

Are there any broker offices near me?

Because mortgage originator offices and staff are continually changing, we have elected not to have this information on our website. We are happy to provide names of originators near you: Just call us at 503-373-2051, or toll-free at 1-888-673-8387.

Program Details

Is the ODVA home loan the same as what the federal VA offers?

No, the two programs are completely separate and offer different benefits. The main difference is that the federal VA loan is actually a guaranty, not a loan. The federal VA does not make the loan; rather, an individual lender makes the loan, and the VA guarantees the top 25 percent of the loan in the event of default — provided the loan is originated, underwritten, funded and serviced according to the limits and guidelines of the federal VA.

Because the loan is funded by the lender, the servicing can be transferred to different loan servicers, or the actual loan can be sold to other investors. But with the ODVA home loan, we actually fund the loan with our own money, and the loan is never sold or transferred.

We encourage veterans to explore the benefits and differences of all the available programs to determine which is best for them.

Why can't I refinance using the ODVA home loan?

This restriction has to do with the way the ODVA’s loan program is funded, which is from the proceeds of Qualified Veteran Mortgage Bonds, or QVMB. Because these funds are considered “tax preferred” to investors, Congress passed legislation implemented by the IRS which has placed some limitations on their use. One of the limitations under our tax laws is that proceeds from QVMB bond sales can be used only for home loan acquisition — not for refinancing existing mortgage loans.

Eligibility

Are spouses eligible for the home loan benefit?

Spouses and registered domestic partners may jointly participate with the veteran on an ODVA home loan, but current spouses are not eligible to use the program on their own. To be eligible, a surviving spouse must not have remarried since the veteran passed away, and the veteran must have died on active duty.

What if I live in Oregon and want to buy in another state. Can I still get the ODVA loan?

No. ODVA cannot issue funds to purchase property in another state.

If I am already eligible for the federal VA home loan benefit, do I have to still establish eligibility with ODVA?

Because the criteria for eligibility are different, a veteran must apply for ODVA home loan eligibility separately. Having a federal Certificate of Eligibility does not mean that a veteran will be eligible for the ODVA home loan program.

What if I don't live in Oregon, but plan on moving there after I buy a house? Am I eligible to buy with this benefit?

As long as you intend to occupy the home as your principal residence within 60 days of closing, current residency in Oregon is not required. However, if you fail to occupy the home within that time frame, ODVA may require immediate repayment of the entire loan.

Property Types

Does the property have to be in Oregon?

Yes. ODVA cannot issue funds to purchase property in another state.

What type of properties can I purchase with the ODVA home loan?

The property must be an owner-occupied, single-family primary residence. These include manufactured homes on owned land, condominiums and stick-built. Personal property manufactured homes, multi-family homes, commercial and agricultural properties cannot be financed with an ODVA home loan.

Loan Servicing/Payments

What is loan cancellation life insurance?

Loan Cancellation Life Insurance (LCLI) is a separate program that offers levels of principal loan balance reduction or payoff. LCLI is a term life insurance product, based on your loan balance, intended to pay the loan if the insured should die. Normal underwriting will apply, and pre-existing medical conditions may affect the premium rates and coverage available for the first few years of the loan.

What are my monthly payment options?

All ODVA home loans are originated with a monthly payment schedule. Partial payment options are not available. Veterans may pay by check or money order, have their financial institution send a check, or have ODVA draw funds from their checking or savings account on the fifth of the month.

Is there a prepayment penalty?

No. ODVA home loans have no prepayment penalties.

Who services my loan?

All of our home loans are serviced by ODVA at our home office in Salem. Unlike most other lenders, we service every loan we fund and have never sold that loan or transferred servicing to another entity. Even loans originated by third-party lenders are transferred to us shortly after closing.