VA Home Financing
All About VA Mortgage Loans
VA Mortgage Loans: A VA (Veterans Administration) guaranteed home loan is the preferred loan program for active, non-active, Reserve, National Guard, and retired military of the armed forces because there is no down payment needed and no private monthly mortgage insurance required.
VA mortgage loans can be used to purchase a home or refinance an existing mortgage.
We will discuss what role the VA plays in a VA guaranteed mortgage, the benefits of a VA home loan, who is eligible for a VA loan, and the VA documentation you will need to present to your lender.
Did you know that more than 27 million veterans and service personnel are eligible for VA mortgage loan financing, yet most aren’t aware it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement?
Important Distinction
VA Does Not Offer Loans Directly and Does Not Guaranty You Will Qualify.
VA does not actually lend the money to you directly. They offer a guaranty to a lender that if you should default on the loan, they will pay the lender a percentage of the loan balance. The word GUARANTY does not actually guarnatee the veteran will qualify for a VA home loan.
Program Advantages
Primary Benefits of VA Mortgage Loans:
100% Financing
100% financing available on 1-unit primary residences for Veterans with full eligibility who are requesting loan amounts between $144,001 to $1,500,000. Minimum FICO score requirements and other requirements may apply.
No Monthly PMI
No monthly private mortgage insurance is required.
Funding Fee
Most VA loans will require a funding fee.
Closing Costs
There is a limitation on buyers closing costs.
Assumable Loan
The loan is assumable, subject to VA approval of the assumer’s credit.
Fixed Term
30 year fixed loan.
Seller Contribution
The seller can pay up to 4% of the veterans closing costs and even pay down your debt to help lower your debt-to-income ratio.
Competitive Rates
Interest rates are similar to FHA rates.
Flexible Credit
You don’t need perfect credit.
Service Requirements
Who is Eligible for VA Mortgage Loans?
Veterans with active duty service, that was not dishonorable, during World War II and later periods, are eligible for VA loan benefits. World War II (September 16, 1940, to July 25, 1947), Korean conflict (June 27, 1950, to January 31, 1955), and Vietnam era (August 5, 1964, to May 7, 1975) veterans must have at least 90 days of service.
Veterans with service only during peacetime periods and active-duty military personnel must have had more than 180 days of active service. Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years.
Please visit www.va.gov/housing-assistance/home-loans/eligibility to verify eligibility requirements.
Prepare Your File
VA Mortgage Loans Documentation Needed:
DD214
For discharged veterans.
Statement of Service
For active military personnel.
Certificate of Eligibility
Used to determine VA entitlement.
The three specific pieces of documentation a lender will need to determine your eligibility is a DD214 for discharged veterans, a statement of service for active military personnel, and a certificate of eligibility (COE) to determine you have VA entitlement.
Because each lender has different qualifying guidelines, the next step is to contact your lender to find out if you meet their qualifying criteria such as minimum FICO/credit scores, debt-to-income (DTI) ratios, and find out what your county’s maximum loan amount is. Your lender can help you attain your certificate of eligibility on your behalf.
Helpful Answers
Frequently Asked Questions:
Are the children of a living or deceased veteran eligible for the home loan benefit?
No, the children of an eligible veteran are not eligible for the home loan benefit.
How can I obtain proof of military service?
Standard Form 180, Request Pertaining to Military Records, is used to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is NOT processed by VA.
Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.
Is the surviving spouse of a deceased veteran eligible for the home loan benefit?
The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit.
Explore Your VA Home Loan Benefit
Connect with our mortgage team to review eligibility, entitlement, and documentation.