But as the agency itself outlines in an online reference guide (PDF), there are parts of the real estate purchasing process that VA can neither control nor guarantee. While these issues may not arise with your particular loan, it’s worth knowing the limitations of any program before taking part.

Here are four such limitations for VA borrowers. The agency cannot:

1. Guarantee your home’s condition. While VA appraisals do check for a variety of structural and other issues, they aren’t meant to substitute for a home inspection. VA recommends an inspection prior to purchase; these checks are more likely to find smaller problems that could grow into big ones, and most sellers are willing to discuss repair options (and costs) prior to a sale.

2. Guarantee your future home’s condition. While VA loans can be taken out on property before the home is built, and while VA does require certain safeguards from the builder to ensure proper construction, there is no mechanism for VA to “compel the builder to correct construction defects or otherwise live up to the contract,” per VA guidance. Any punishment the builder faces would come in the form of an inability to participate in future VA-backed projects.

3. Guarantee your investment. While VA requires appraisals to track a home’s value, market forces are outside the agency’s control.

4. Offer legal aid. While the agency has programs that can assist veteran borrowers in avoiding foreclosure and dealing with other loan-related issues, the agency won’t field advocates on your behalf.

Now that you know the limitations, visit our VA Loan Center for more on what a VA-backed loan can offer.

NewDay USA has been restricted, at least temporarily, from pools of money that are open for other lenders through Ginnie Mae, a government corporation that oversees the process for ensuring the success of the government’s mortgage-backed securities guarantee. Ginnie Mae took similar action this week against Nations Lending, according to Bloomberg.com.

NewDay USA VA loans will still be placed in specialized loan pools under Ginnie Mae, but won’t be mingled with other lenders, so the terms won’t be as good for borrowers. Thus, one mortgage banking industry source said, the action may limit NewDay USA’s ability to make loans to veterans with low credit scores; Nations Lending faces a similar fate, per Bloomberg.

“Our record is absolutely clear. NewDay does not churn veteran loans,” the company said in a statement to Military Times. “We have been an outspoken supporter of measures to end the shameful practice of loan churning.”

A response was not immediately available from Nations Lending. However, the lender’s chief administrative officer provided a statement to Bloomberg noting that the company recently underwent a routine VA examination, and the company doesn’t have issues with its VA loan program.

About 99 percent of VA loans are secured into a Ginnie Mae mortgage-backed security and then sold in the secondary mortgage market with a full faith and credit guaranty from Ginnie Mae, which is also responsible for policing their program to protect against loss.

The “churn“ begins when VA loan users are targeted with an onslaught of mortgage-refinance solicitations, often shortly after they’ve closed on a home loan. Some borrowers have been convinced to refinance their loan multiple times in a year, often with little or no financial benefit. Fees attached to the deals increase the overall loan amount each time it’s refinanced.

These rapid refinances remove the loan from the Ginnie Mae pool, along with the return expected from monthly principal and interest payments. Thus, investors are less willing to pay a premium price for Ginnie Mae bonds. As bond prices fall, interest rates to borrowers increase.

Ginnie Mae is continuing to take steps to ensure that loans with refinance speeds that are higher than the market norm aren’t mingled with its main programs, said Michael Bright, Ginnie Mae executive vice president and chief operating officer, in a statement provided to Military Times. “This ensures the integrity of our bonds, and strengthens the support they provide to veterans and other homebuyers.”

“Roughly one out of four customers of NewDay says they have been rejected by major banks while applying for the VA benefits they are entitled to receive,” per NewDay’s statement. “When veterans cannot access their VA financial benefits, they are forced to pay much higher credit card interest rates or use extremely high interest payday lenders.”

In February, Ginnie Mae put nine lenders on notice that they’d be removed from the primary finance program for VA loans if they didn’t stop the alleged loan churning practices. Information was not available from Ginnie Mae about whether punitive action has been taken against any of the other seven lenders. The lenders had varying deadlines for responding to the initial Ginnie Mae notification.

Some borrowers may have good reasons to refinance: Better rates may be available, or a cash-out loan may suit their financial situation. But for most VA loan users, especially those who’ve just closed on their new home, refinance solicitations can lead to problems.

New regulations are planned for later this year to better monitor this lending practice. In the meantime, here are five ways to keep your guard up:

1. Read everything. A November 2016 report by the Consumer Financial Protection Bureau included multiple complaints from VA loan-holders about refinance solicitations. A common theme: Promises in big letters, problems in the fine print: Some “low, low interest rates” went up once the conditions were factored in, and one refinance used a homeowner’s escrow account to pay down the loan balance, then started charging the borrower to rebuild a new escrow account.

2. Ask anything. If the fine print (see above) is confusing, don’t just nod along with what the lender tells you. Seek clarity on any points of confusion, and if you feel like the lender’s representative is moving too fast, stop the process cold. And be sure to confirm with your lender that you qualify, in full, for any program being advertised. If you don’t, expect some fees to pop up late in the process.

3. Don’t get caught up. A typical borrower concern, per the CFPB report, came when red flags shot up just prior to signing, after the lender had run the borrower’s credit. Faced with a higher rate or a potential ding on their credit score, at least one borrower reported going through with the transaction, worried that changing leaders would be too complicated. That’s not true, the CFPB advised: Running your credit has a minimal effect on your score, and having it run multiple times during a given window (at least two weeks, sometimes longer) while shopping for a new mortgage rate will count as a single inquiry.

4. General scam awareness. Check out our refinance-scam tip sheet, including advice from the Better Business Bureau.

5. Get educated. Along with Military Times’ coverage of the issue, check out this from the CFPB (written by Holly Petraeus), learn the basics on VA’s Interest Rate Reduction Refinance Loans, and get briefed by the Federal Trade Commission on all types of mortgage scams.

Until the postman shows up.

“After I did close on my home, my mailbox was just flooded with mail solicitations, with ‘Refinance!‘ and ‘Get a Better Rate!‘ said Cassandra Rowley, a former sailor-turned-Realtor in the Seattle area who used her VA loan benefit to help finance her own home earlier this year.

“Ignore all that. You have to ignore all that. You just took on this huge, several-thousand-dollar debt. You want to let your credit repair, you want to let everything smooth out before you make any more major decisions.”

There’s another good reason to skip out on those offers: Some may not be legit.

Home HQ outlined a recent “Warning Order” by two federal agencies on possible VA loan scams here, but that warning was far from the first. A 2016 message from the Better Business Bureau addressed the refinance scams specifically and offered some tips to help new homeowners ward off predatory lenders:

• New-school scammers: You may still get the red, white and blue leaflets in the mail, but many of the scams have moved to email or social media to find their victims.
• Don’t “act now”: Some legitimate lenders do offer limited-time pricing, and there may be deadlines attached, but if you’re feeling pressured into an immediate decision, it’s not a good sign.
• Pay first, problems later: If you’re asked to pay upfront so you can lock in a rate, step away. And if the lender requests an unusual method of payment (gift card, prepaid debt card, wire transfer), there’s a good chance it’s being done to your detriment.
• Guaranteed rate?: Any pitches that involve “guaranteed” figures before a lender even gets a glimpse at your credit score should be cast aside. Fast.

If you’ve been targeted by a suspected scammer, you can contact VA investigators to share your story. You can also contribute to the Better Business Bureau’s Scam Tracker, which monitors lending and other types of scams nationwide.

“The biggest thing is, ‘Well, I’ve been out of the service for 15, 20 years, so I can no longer use it,’ ” said Kathleen Ricketts, a 29-year real estate professional and an instructor with the National Association of Realtors’ Military Relocation Professional program.

“And I’m like, ‘Why?’ ‘Well, I thought it expired,’ they say. It didn’t expire. It’s yours. As long as they have an honorable or a general discharge, it’s there.”

Lack of program awareness was one of several issues brought up by military-focused real estate professionals asked by Military Times about common concerns regarding the program. Active-duty troops or those recently separated usually have the best grasp of the benefit, Ricketts said, either because of materials provided by their command or a familiarity with finding such details online.

Still, misinformation can be toxic to the real estate process, said Juanita Charles, an Army veteran and licensed Realtor in both Tennessee and Kentucky, serving an area near Fort Campbell.

“The major challenge that I have faced has been other people outside of the transaction giving incorrect or nonapplicable information,” Charles said. “Although you may have an aunt who just bought a house in Florida, please don’t allow that person to come between you as the buyer and your agent. You have hired a professional to take care of you, and so you should allow them to do their job.”

SELLER BE AWARE

Just because a buyer understands how VA loans work doesn’t mean the seller will be up to speed. It’s a knowledge gap that can prove problematic when troops or veterans put in their VA-backed offers, said Ernie Gonzales, an Army veteran whose real estate business covers Las Vegas and Henderson, Nevada.

“It is a common misconception of the listing agent and seller that accepting a VA offer is a negative thing,” Gonzales said.

“Each time we help a veteran buy a home, we must educate the listing agent and seller that using a VA loan is a benefit to both the buyer and the seller. There are no unusual fees, hoops or negative impact on the appraisal that we need to worry about.”

Ricketts, whose real estate practice covers Chicago’s northwest suburbs, said it falls to the buyer’s representative to be “educating that [seller’s] agent so they can educate their client” on VA loan matters.

Doing so might require a bit of extra effort, study and patience, but there’s a reason to move forward, she explained.

“Sometimes, that’s where we have to put our patriotic hat on. We’re serving those who’ve served us.”

Active-duty members as well as veterans generally qualify for a VA loan, though the Veterans Affairs Department doesn’t make the loans: It guarantees them, which minimizes lenders’ risks and reduces their losses in the event of a foreclosure. The lenders set the interest rate.

Here are some reasons to consider a VA loan, not necessarily in order of importance.

1. No down payment required. Most lenders require a down payment of at least 3 percent of the home’s purchase price, according to Bankrate.com. On a $200,000 loan, that’s $6,000 due up front.

2. No PMI. Many lenders require private mortgage insurance if you make a down payment of less than 20 percent of the purchase price. The most common way to pay for PMI is through a monthly premium, added to your mortgage payment. VA loans don’t require it.

3. No minimum credit score. Instead, VA requires a lender to review the entire profile of the borrower in making a lending decision. On average, those who qualify for VA loans have lower credit scores than those who apply for conventional loans, according to data in the Ellie Mae Origination Insight Report. In September, the average credit score for veterans who had closed on a VA loan that month was 709 for home buyers and 701 for refinancing; for those using conventional loans, those figures were 752 and 731, respectively.

(Get more from Ellie Mae, as well as some myth-busting VA loan details, here.)

4. No maximum debt ratio. However, if the ratio is more than 41 percent of income, the lender must provide information about factors that could compensate for that gap.

5. No loan maximum. There are, however, limits on the amount of liability VA can assume, which usually affects the amount of money an institution will lend. The loan limits vary by county, because the value of a house depends on the location, and change over time.

Veterans can borrow up to $424,000 without a down payment in most areas of the country. The 2017 loan limits are the same as the Federal Housing Finance Agency’s limits, which can be found here.

6. Safeguards in place. There are guidelines to ensure veterans have the capacity to repay their mortgage and other debts while accounting for all living expenses. There are also minimum property requirements to ensure the property is safe, sanitary and sound.

7. Fighting off foreclosure. There are VA staff members dedicated to helping veterans who become delinquent on their loan. In 2016, these staff members helped 97,368 borrowers avoid foreclosure. There were 18,519 foreclosures. “It’s a start-to-finish program for us, not just close the loan and we’re out,” said Greg Nelms, chief of loan policy for the VA home loan program.

For complete information about VA home loans, visit http://www.benefits.va.gov/homeloans/. Take our quiz on the home loan benefit here.