The additional financing opportunities That FHA provides to qualified veterans are: The three percent cash investment requirement does not apply to borrowers who are veterans and, under certain circumstances, this veteran's preference may result in a significant reduction to the cash needed to close the mortgage.

Those eligible veterans whose property seller will pay all the closing costs, or choose to use premium pricing for settlement charges, or some combination of both, the cash settlement reduction can be substantial. This cash reduction will always be equal to the difference between the maximum loan-to-value (LTV) limit, which varies according to sales price and the State where the property is located, and 97 percent (the reciprocal of the 3 percent cash investment requirement) multiplied by the sales price (or appraised value, if less). As the amount of borrower-paid closing costs increase, the benefit diminishes.

FHA's program supplements but does not supplant the VA entitlement programs. This additional mortgage financing opportunity being provided by FHA may directly benefit:

• Veterans with less than full eligibility for a VA guaranteed loan
• Veterans who are co-borrowers with someone other than a spouse
• Veterans whose eligibility is tied up until a loan that was assumed is paid off or the veteran is released from all liability
• Veterans re-using their eligibility and whose new loan under VA may have a funding fee greater than FHA's mortgage insurance premium.