Famous for its rich American history, sports and overall vitality, Boston is home to more than 30,000 civilian veterans. All of Massachusetts houses more than 425,000 veterans. Veterans who are considering purchasing a home in Massachusetts are entitled to the VA home loan program.

In the Bay State, VA uses two income qualifications to deem veterans eligible: debt-to-income ratio (DTI) and residual income. To qualify, a veteran’s total debt should not be more than 41 percent of his or her total income. The residual income requirement measures whether or not the borrowing veteran can cover daily living costs after taxes, housing, insurance and liabilities (e.g. credit card and car payments) have been made.

With the exception of seven counties with higher VA loan limits, Massachusetts’ counties’ limit is $417,000. Suffolk County, where Boston is, has a $475,000 maximum, and Nantucket’s ceiling goes up to $1,094,625. Qualified veterans can pay no money down to finance 100 percent of the lower of the selling price or appraised value.

In addition to the no money down, VA loan interest rates tend to be lower than those of conventional loans. VA guidelines in Massachusetts curb a handful of fees, such as underwriting and processing fees. Another fee that veterans can get waived is the VA funding fee, which supports VA loan guarantees. If they cannot get it waived, veterans in Massachusetts can finance the fee. Other advantages to VA loans include:

• No private monthly mortgage insurance
• In some cases, sellers paying the closing costs
• No penalty for making loan payments early
• Several refinancing options

The median cost of a single family home or condominium in downtown Boston during 2009 was approximately $475,000, and roughly $350,000 at the sate of Massachusetts level. That’s why the state’s VA loan limits balloon above the norm. But before veterans start looking at homes in Boston and its state, they should check their eligibility for a VA loan.

Veterans who meet one of the three following criteria may be eligible:

• Military members who’ve served 181 days on active duty or three months during war time
• People who have spent at least six years in the National Guard or Reserves
• Spouses of those killed in the line of duty

For more information on VA loans in Massachusetts, visit VAmortgagecenter.com.

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