VA Loans (A Personal Story): Navy Vet Uses “No Downpayment” Option

Marcie Geffner
The Mortgage Reports contributor

Praise For The VA Loan Program

Mike Davis has plenty of praise for the VA Loan Guaranty Program, a veterans benefit guaranteed by the U.S. Department of Veterans Affairs.

Not long ago, the VA loan had a so-so reputation. But Davis, a recent home buyer and VA borrower, formed a favorable impression of the loan based on his personal experience.

In fact, he says he’d encourage other servicemembers to look into the VA loan as a benefit of their service and see whether it makes sense for them.

“The stereotype is that it’s a lot more cumbersome, and it’s slower,” Davis says. “I think they’ve made good progress on (fixing) that.”

“Obviously, it’s a small sample size, but it looks like it’s as quick to close as any conventional loan, so people shouldn’t be dissuaded.”

Retired Navy Commander Purchases A Bungalow

Davis, 51, is an attorney with the state of California. He retired from military service as a U.S. Navy commander at the end of 2014, after 28 years of combined active and reserve duty.

His first seven years on active duty were served on a ship-and-shore command. He then remained in the Reserves until 2013, when he was mobilized to work in the U.S. Navy Central Command in Bahrain.

Davis’ wife Andrea, 42, is an executive with The Walt Disney Company. The couple has two pets: a Siamese cat named Mr. Boo and mixed-breed rescue dog named Peanut.

The home the couple bought is a 1906 California bungalow in Pasadena, Calif.

Extensively remodeled in 2012, the home has 1,266 square feet of space with three bedrooms and two bathrooms.

It’s not located in Pasadena’s “bungalow heaven” area, but Davis says it’s nearby.

“It ended up being pretty much a turnkey place that had the charm of an older bungalow, but then also had a lot of the things that you don’t get in older homes — an updated kitchen, walk-in closet, a larger bathroom with larger tub, dual sinks.”

“Things they didn’t think about back in the early 20th century,” he says.

A VA Closing After Just 35 Days

The Davises made their offer to buy their home at the end of July 2015 and the deal closed at the end of August, after an escrow of about 35 days.

They moved in over the three-day Labor Day weekend.

“Our son is an adult now and out of the house, so we realized that we didn’t need a really large place,” Davis says. “We just liked it.”

The home cost $600,000, and Davis estimates that his out-of-pocket closing costs came to about $10,000.

The monthly payment, approximately $3,800, includes principal and interest at 4.3%, and an impound for property tax and homeowner insurance.

The Davises have owned two prior homes. They purchased the first with a VA loan, and the second using home builder financing.

Using The “Extended Loan Limits” Of A VA Loan

Davis has a long list of reasons why he likes his VA loan: no down payment, no private mortgage insurance, a 30-year term, and a fixed mortgage interest rate.

He also likes that VA loan limits are high enough to accommodate the California’s high-cost housing.

“The funding limits on the VA were within the range that we were looking at, and the ability to buy the home without doing a 5 percent to 20 percent down payment was attractive to us,” Davis says.

The funding limit came as a welcome surprise.

“We were pleased to know that the federal limits on the VA loan increase in more expensive areas,” Davis says. “If you don’t look into that, you might think that the house that you might want to buy is more than [what the VA allows].”

“[Elevated VA loan limits] was a good discovery.”

This interview is part of a series of stories covering veterans and homeownership. is honored to highlight these honest, first-hand accounts.

Are you a U.S. armed services veteran? Get today’s live VA mortgage rates now.