Homes By Josh

Got Questions? We Have Answers

Browse our comprehensive FAQ covering VA loans, construction loans, FHA loans, down payment assistance, refinancing, and more.

VA Loans

What is a VA loan and who qualifies?
A VA loan is a mortgage loan guaranteed by the U.S. Department of Veterans Affairs. It is available to eligible veterans, active-duty service members, certain National Guard and Reserve members, and surviving spouses. The VA guarantee allows lenders to offer favorable terms such as no down payment and no private mortgage insurance (PMI).
Is there a down payment required for a VA loan?
No. One of the most significant benefits of a VA loan is the ability to purchase a home with zero down payment. This applies to eligible borrowers regardless of the purchase price, as long as the loan amount does not exceed the appraised value of the property.
What is the VA funding fee and can it be waived?
The VA funding fee is a one-time charge paid to the Department of Veterans Affairs to help sustain the loan program. The fee varies based on your down payment, whether it is your first or subsequent use, and your type of service. Veterans receiving VA disability compensation, Purple Heart recipients on active duty, and surviving spouses receiving Dependency and Indemnity Compensation are exempt from the funding fee.
Can I use a VA loan more than once?
Yes. VA loan benefits can be used multiple times throughout your life. You can restore your entitlement after paying off a previous VA loan and selling the property, or you can use remaining entitlement to have more than one VA loan at the same time in certain situations.
What is a Certificate of Eligibility (COE) and how do I get one?
A Certificate of Eligibility is a document that verifies to the lender that you are eligible for a VA-backed loan. You can obtain your COE through your lender (the fastest method), through the VA eBenefits portal online, or by submitting VA Form 26-1880 by mail. Your lender can often pull your COE electronically in minutes.
Are there VA loan limits?
For borrowers with full entitlement (meaning you have never used your VA loan benefit, or you have had your entitlement fully restored), there is no loan limit. You can borrow as much as a lender is willing to approve. For borrowers with reduced entitlement, county-specific loan limits may apply based on the FHFA conforming loan limits.
What are the minimum credit score requirements for a VA loan?
The VA does not set a minimum credit score requirement. However, most lenders have their own minimum credit score overlays, typically ranging from 580 to 620. Some lenders, including our team, work with borrowers who have lower credit scores and can help you explore your options.
Can I use a VA loan to buy a condo or multi-unit property?
Yes. VA loans can be used to purchase condominiums that are in VA-approved condo projects. You can also use a VA loan to buy a multi-unit property with up to four units, as long as you occupy one of the units as your primary residence.
What is the VA appraisal and how is it different from a home inspection?
A VA appraisal is required by the VA to determine the fair market value of the property and to ensure it meets the VA Minimum Property Requirements (MPRs). It is not the same as a home inspection. While the appraisal checks basic safety and livability standards, a home inspection is a more thorough examination of the property's systems and components. We always recommend getting both.
How long does it take to close on a VA loan?
On average, a VA loan takes 30 to 45 days to close from the time you go under contract, which is comparable to conventional loans. The timeline can vary depending on factors such as the complexity of your financial situation, the VA appraisal turnaround time, and how quickly you provide required documentation.

Construction Loans

What is a VA construction loan?
A VA construction loan allows eligible veterans to finance the construction of a new home using their VA loan benefits. The VA One-Time Close (OTC) construction loan is the most common type, combining the construction financing and permanent mortgage into a single loan with one closing, saving you time and closing costs.
Can I build a home with zero down payment using a VA construction loan?
Yes. Just like a traditional VA purchase loan, a VA construction loan offers 100% financing with no down payment required. The loan amount is based on the appraised value of the completed home, and you can build on land you already own or finance the land purchase as part of the construction loan.
Do I need to find my own builder for a VA construction loan?
Yes, you will need to work with a VA-registered builder who meets the VA's requirements. The builder must be licensed, insured, and registered with the VA. We can help connect you with experienced builders in your area who are familiar with the VA construction loan process.
How does the draw process work during construction?
During construction, the lender releases funds to the builder in a series of draws as construction milestones are completed. A VA inspector will verify the work at each stage before funds are disbursed. You typically make interest-only payments on the amount disbursed during the construction phase.
How long does the construction process take?
Most new home construction takes between 6 to 12 months, depending on the size and complexity of the home, weather conditions, and material availability. Your builder will provide a construction timeline as part of the plans and specifications submitted to the lender.
Can I act as my own general contractor on a VA construction loan?
Generally, no. The VA requires a licensed, VA-registered general contractor to oversee the construction. This requirement helps protect you by ensuring the home is built to proper standards and that the construction process is managed by an experienced professional.

FHA Loans

What is an FHA loan and who is it best for?
An FHA loan is a mortgage insured by the Federal Housing Administration. It is designed for borrowers who may not qualify for conventional financing, including first-time homebuyers, those with lower credit scores (as low as 580 for 3.5% down), and borrowers with higher debt-to-income ratios. FHA loans are a great option for anyone looking for more flexible qualification requirements.
What is the minimum down payment for an FHA loan?
The minimum down payment for an FHA loan is 3.5% of the purchase price if your credit score is 580 or higher. If your credit score is between 500 and 579, a 10% down payment is required. Down payment funds can come from savings, gifts from family members, or down payment assistance programs.
What is FHA mortgage insurance and how long do I pay it?
FHA loans require two types of mortgage insurance: an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, and an annual mortgage insurance premium (MIP) paid monthly. For most FHA loans with less than 10% down, the annual MIP is required for the life of the loan. If you put 10% or more down, MIP can be removed after 11 years.
Can I use an FHA loan for a multi-unit property?
Yes. FHA loans can be used to purchase properties with up to four units, as long as you occupy one unit as your primary residence. This is a popular strategy for first-time buyers who want to use rental income from the other units to help qualify for and afford the mortgage.
What are the 2026 FHA loan limits?
FHA loan limits vary by county and are updated annually. In most areas, the standard FHA loan limit for a single-family home is $524,225 in 2026. In high-cost areas, the ceiling can go up to $1,209,750. Bexar County (San Antonio) generally follows the standard floor limit. Check with us for the most current limits in your area.
Can I refinance an FHA loan?
Yes. FHA offers the Streamline Refinance program, which allows current FHA borrowers to refinance with reduced documentation and often without a new appraisal. This can be a quick and cost-effective way to lower your interest rate. You can also refinance from an FHA loan to a conventional loan once you have enough equity to eliminate mortgage insurance.

Down Payment Assistance

What is down payment assistance (DPA)?
Down payment assistance programs provide funds to help homebuyers cover their down payment and sometimes closing costs. DPA can come in the form of grants (free money), forgivable loans, deferred-payment loans, or low-interest second mortgages. These programs are offered by state housing agencies, local governments, and nonprofit organizations.
Do I have to be a first-time homebuyer to qualify for DPA?
Not always. While many DPA programs target first-time homebuyers, the definition often includes anyone who has not owned a home in the past three years. Some programs, such as those for veterans or specific professions, do not have first-time buyer requirements at all.
What DPA programs are available in Texas?
Texas offers several DPA programs including My First Texas Home, My Choice Texas Home, Homes for Heroes, Home Sweet Texas, the Housing Assistance for Texas Heroes (HAT) program, and SETH (Southeast Texas Housing Finance Corporation). San Antonio also has local programs such as HIP 80, HIP 120, and programs through Opportunity Home San Antonio.
Can I combine DPA with a VA loan?
In many cases, yes. While VA loans already require no down payment, DPA funds can be used to cover closing costs, the VA funding fee, or other expenses associated with purchasing a home. The specific DPA program terms will determine how the funds can be used in combination with a VA loan.
Are DPA grants taxable income?
Generally, down payment assistance grants are not considered taxable income. However, forgivable loans may have tax implications if they are forgiven. We recommend consulting with a tax advisor about the specific DPA program you are using to understand any potential tax consequences.
How do I apply for down payment assistance?
The application process varies by program, but typically your lender will help you apply for DPA as part of your mortgage application. You will need to meet the program's income limits, purchase price limits, and other eligibility requirements. We can help you identify and apply for the DPA programs you qualify for.

Refinancing

When should I consider refinancing my mortgage?
Consider refinancing when current interest rates are significantly lower than your existing rate (typically 0.5% to 1% or more), when you want to switch from an adjustable-rate to a fixed-rate mortgage, when you need to access home equity through a cash-out refinance, or when you want to remove mortgage insurance from an FHA loan by refinancing to a conventional loan.
What is a VA Interest Rate Reduction Refinance Loan (IRRRL)?
The VA IRRRL, also known as a VA Streamline Refinance, is a simplified refinance option for veterans who already have a VA loan. It allows you to lower your interest rate with minimal documentation, often without an appraisal, and with reduced closing costs. You must demonstrate a net tangible benefit from the refinance, such as a lower interest rate or switching from an adjustable to a fixed rate.
What is a cash-out refinance?
A cash-out refinance replaces your existing mortgage with a new, larger loan, allowing you to take the difference in cash. This can be used for home improvements, debt consolidation, education expenses, or other financial goals. VA cash-out refinances allow up to 100% of the home's appraised value, while conventional cash-out refinances typically allow up to 80%.
How do I calculate my break-even point on a refinance?
The break-even point is calculated by dividing your total closing costs by your monthly savings from the new, lower payment. For example, if your closing costs are $4,000 and you save $200 per month, your break-even point is 20 months. If you plan to stay in the home longer than the break-even period, the refinance makes financial sense.
Do I need an appraisal to refinance?
It depends on the type of refinance. VA IRRRLs and FHA Streamline Refinances often do not require a new appraisal. Rate-and-term refinances and cash-out refinances typically do require an appraisal to determine the current market value of your home. Some conventional refinance programs offer appraisal waivers based on the lender's automated underwriting assessment.
Can I refinance if I have bad credit?
Yes, there are refinance options for borrowers with less-than-perfect credit. VA IRRRLs have flexible credit requirements since you already have a VA loan. FHA Streamline Refinances also have relaxed credit standards. For conventional refinances, you typically need a minimum credit score of 620, though requirements vary by lender. We can help you explore your options based on your specific credit situation.

General

What is the difference between pre-qualification and pre-approval?
Pre-qualification is an informal estimate of how much you might be able to borrow based on self-reported financial information. Pre-approval is a more formal process where the lender verifies your income, assets, credit, and employment to provide a conditional commitment for a specific loan amount. Sellers and real estate agents consider a pre-approval letter much stronger than a pre-qualification.
How much home can I afford?
The amount of home you can afford depends on several factors including your income, monthly debts, credit score, down payment, interest rate, and the loan program you choose. A general guideline is that your total monthly housing costs (including principal, interest, taxes, and insurance) should not exceed 28% to 36% of your gross monthly income. We can run detailed numbers for your specific situation.
What documents do I need to apply for a mortgage?
Common documents include: recent pay stubs (30 days), W-2 forms (2 years), federal tax returns (2 years), bank statements (2 months), government-issued ID, and if applicable, DD-214 or statement of service for VA loans. Self-employed borrowers will need additional documentation such as profit and loss statements and business tax returns.
What is an escrow account?
An escrow account is a separate account managed by your mortgage servicer to pay your property taxes and homeowner's insurance on your behalf. A portion of each monthly mortgage payment goes into the escrow account, and the servicer makes the tax and insurance payments when they are due. This ensures these critical expenses are paid on time.
What is the difference between a fixed-rate and adjustable-rate mortgage?
A fixed-rate mortgage has an interest rate that remains the same for the entire life of the loan, providing predictable monthly payments. An adjustable-rate mortgage (ARM) has an initial fixed-rate period (commonly 5, 7, or 10 years) after which the rate adjusts periodically based on market conditions. ARMs typically offer lower initial rates but carry the risk of rate increases in the future.
How does my credit score affect my mortgage rate?
Your credit score is one of the most significant factors in determining your mortgage interest rate. Generally, higher credit scores qualify for lower interest rates. A difference of even 20 to 40 points in your credit score can result in a meaningfully different rate. We can review your credit profile and help you understand how to optimize your score before applying for a mortgage.
What are closing costs and how much should I expect to pay?
Closing costs are fees associated with finalizing your mortgage and typically range from 2% to 5% of the loan amount. They can include lender fees, appraisal fees, title insurance, attorney fees, recording fees, and prepaid items like homeowner's insurance and property taxes. VA loans limit certain closing costs that lenders can charge to borrowers.
Do you serve clients outside of Texas?
Yes. While our primary market is San Antonio and the greater Texas area, Joshua Payne is licensed in multiple states. We serve veterans and homebuyers across the country. Contact us to confirm licensing in your state and to discuss how we can help you with your home financing needs regardless of your location.