Ever heard of a VA Vendee Loan?

Question

A few years back I bought a foreclosed property with the intent of using a conventional mortgage. When our offer was accepted the listing realtor contacted us and said the previous owner had a 'VA Vendee' loan which was some kind of special loan from the VA. They said that we could get grandfathered into the program and offered the same terms to us. The loan was fantastic. Really great intrest rates, 0% down payment, no PMI insurance, no appraisal, no inspections.

Has anyone ever heard of this type of loan? Most people I've asked have never heard of it, but surely this is the place to get more info on it. I'm wondering if it's possible I have been grandfathered into the program that I might be able to use this loan on other properties? Or does anyone know where I could look to get more info myself?

Please help!

Chris Majors · Answer

Hey @Wesley Read

It looks like it is legit back.  If you go to vrmco.com and go to the VA owned properties, the site will indicate whether the listing is eligible for vendee financing.  You can request more info and get the contact for a lender.  I have a local contact, but have not yet applied for the vendee product yet.  There haven't been any decent VA deals lately in my area.  If I end up applying for the loan I will definitely post an update.

Chris Majors · Answer

Looks like the Vendee loan product is back!!  I've noticed on some local VA REO's that they are now offering it.  I just started researching it again and came across this thread.  I'll post some more info after further research.

It looks like it's pretty much the same terms: 0% down owner-occupied and 5% down NOO. 2.25% funding fee and the seller will pay up to 6% of the sales price towards closing costs.  No appraisal required.  No limit on number of investment properties.

Chris Majors · Answer

I believe all the info I just gave was from the old product.  The listing agents do not have any info either, they are just instructed to put the verbiage in their listing that owner financing with the vendee program may be available.  When you go to the vrmco.com and search listings there is a tab you can click to request more info.  Unfortunately, I was only sent an auto-email with no lender contact or any additional information.

It doesn't look like anyone has closed with the "new" vendee loan in my market yet.

If anyone has additional information or contacts please let me know!

Jamie Engledow · Answer

I would assume the same.  USAA insurance and banking is totally different.  I am a veteran and have USAA.  My children may never join the military, but my decendents will all have benefits of USAA.  Anyone may assume a VA loan as long as they qualify with the lender, but only a veteran can obtain an initial VA loan. And you may not do a VA refinance unless you are a veteran.

Nate O'Neil · Answer

Jon,  This loan program was great while it lasted.  As you referenced, it provided low interest rates and required a very low down payment.There was no limit to the number of properties an investor/owner could finance.  The program has been gone for a few years now and unfortunately, does not appear to be coming back.  It seems it was a temporary government sponsored play to help move Department of Veteran Affairs owned foreclosures off the books when there was a glut of them.

Carlos Scarpero · Answer

It's a program for VA foreclosures. The interesting part of the program is the buyer actually does not need to be a veteran. I believe it's also zero down.

Tony Sklavounakis · Answer

Does anyone know of a mortgage professional who has completed a recent Vendee loan deal??

Wesley Read · Answer

@Chris Majors did you ever find out anymore? This is fascinating to me.

Bernie D. · Answer

So... I take it there are no other VA products similar to the Vendee Loan for non-veterans looking to purchase VA Foreclosures?

Nate O'Neil · Answer

Jon,

I did a few of these VA Vendee loans and have also been bombarded with VA loan offers since.  I responded to a few and learned that while the VA Vendee program was temporarily open to non-veteran investors, in order to take advantage of these programs, one now needs to actually be a veteran.

Not sure how having a family member as a veteran may effect this, but my suspicion is that the person in whose name the mortgage loan will be made would need to be a veteran?

Nate

Ever heard of a VA Vendee Loan?

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