Advance planning enables jumbo VA home purchase

Mortgage adviser: Rick Weber. Property type: Single-family home in Dublin. Price: $1.052 million. Loan amount: $824,087. Loan terms: 30-year fixed at 4.00 percent. Background: Rick Weber’s clients wanted to purchase a new home in Dublin and take advantage of all the benefits of the Veterans Administration loan program. With limited resources available to the borrowers for a down payment, the low down payment/no mortgage insurance aspects of the VA product were the perfect solution to making a serious bid in a competitive market.

A complicating factor in the financing was that one of the purchasers was just starting a new position as a physician at Kaiser, which has a program that provides a forgivable second mortgage for 10 percent of the purchase price that does not require monthly payments as long as the borrower remains employed at Kaiser. Not all lender underwriting guidelines allow this second mortgage structure so Weber had to make sure that the overall structure would be fundable when his clients found a home.

Since both these loans are somewhat uncommon in our marketplace, there was concern that a potential seller might be unfamiliar with the VA loan program and the Kaiser second mortgage and might have reservations about accepting the buyers’ offer. Weber took the proactive approach of having the loans fully underwritten in advance and was able to provide the official loan approval as a means of strengthening the offer.

The borrowers’ offer was accepted and the transaction closed successfully and on time.