Buying Advice

VA Benefits: Use It or Loose It!

For years, it seemed that Hawaii Veterans’ home loan benefits existed in name only. Previous loan limit guarantees made it seem hopeless in most of the State. These days, veterans can shop with confidence knowing their potential loan amount would make their offer to purchase competitive.

VA Loans in Hawaii

In fact, VA loans have become quite commonplace.  There are reasons that using VA benefits make a lot of sense. It’s refreshing to see that the VA seems willing to bend over backward to assist qualified Veterans.  VA interest rates are competitive or even lower than prevailing conventional rates.

Veterans enjoy higher allowable debt ratios enabling them to purchase more house with the same income. While other programs (especially zero down programs) cap the borrower’s debt ratio at 29-33%, including the proposed house payment, VA expands this ratio to 41%. As an example, a family in East Hawaii making $6000 per month could qualify for a VA mortgage of approximately $370,000.

Other loan programs would cap this amount around $298,000 calculated at 7% principal and interest. VA has always been a bit more forgiving about credit “hiccups” than other loan programs. These days, permit requirements have also even been relaxed quite a bit. So, while it’s still not possible to build a home using a VA loan (except on DHHL lands), purchasing an existing home offers appealing possibilities.

Use Your Benefits

Many National Guard and Reserve members do not realize that they qualify for VA home loan benefits. Widows of qualified Vets can use a spouse’s benefits, but children cannot. For this reason, I always encourage Veterans to use their benefit. It’s possible to inherit a home but, for other than certain spouses, VA benefits are extinguished at death. Vets with existing mortgages should consult their lender to determine if refinancing into a VA loan is worthwhile.

Remember, it’s also possible to use your VA guarantee over and over, and to split or combine your eligibility. While other government guaranteed zero down loans (Rural Development) do not set limits on the cost of the home, they do cap household income which often keeps loan amounts below a median priced home. In general, VA loans have fewer restrictions and limitations, but they do require water testing when a home is serviced by catchment, so be sure to negotiate payment for this.  Considering that no down payment is required, that points are now negotiable, and that interest rates are extremely competitive, it’s easy to understand why VA loans have become very popular in and around our Hawaii neighborhoods. All-in-all, this means that VA loans are not only good for sellers, they great for us Vets! Hats off and many thanks to those who offered their lives to protect our freedoms!

About the Author

Denise Nakanishi

Denise Nakanishi is a REALTOR Broker with Hawai'i Life. Denise Nakanishi is one of Hilo's most acclaimed real estate agents. She reached the rank of Major in the US Army and is now known by many as "Major Mom." The nickname fits–not only does Denise bring the discipline and mission-oriented attitude you'd expect, she's also caring and compassionate, always looking out for her clients like they're her own family. Having made the Big Island her home since 1987, Denise combines her extensive knowledge of the area with a sharp focus on customer service and the results speak for themselves. She's the recent recipient of the Best East Hawai`i, Best of Zillow, Chairman's Circle Award, President's Circle, Top Producing Agent since 2001, and Realtor of the Year awards. Denise stays ahead of the curve because she's passionate about education–she served as Education Chair for Hawaii Island REALTORS® for many years. She's one of Big Island's best real estate resources, known for her weekly article in the Hawaii Tribune Herald. Denise leads Team Nakanishi for Hawai`i Life, who is committed to their family, work, and community. In her little time away from work, Denise is a committed runner and Grandy. She also devotes many hours to various Veterans' Organizations, the East Hawaii Cultural Center, and the Hawaii Island REALTORS®. You can email me at or via phone at (808) 936-5100.

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