Who Qualifies for a VA Home Loan
A VA home loan is a mortgage option available to veterans, active-duty service members, and certain members of the National Guard and Reserves, designed to help them purchase, refinance, or build homes. Here is a detailed overview of who is eligible for a VA home loan and how to apply for one.
Eligibility for a VA Home Loan
To be eligible for a VA home loan, you generally need to meet one of the following criteria:
1. Service Requirements
- Veterans: Must have served on active duty and been discharged under conditions other than dishonorable. Specific length-of-service requirements vary depending on when you served.
- Active-Duty Service Members: Must have served for at least 90 continuous days.
- National Guard and Reserve Members: Must have served at least six years in the Selected Reserve or National Guard, or have served 90 days of active service (with at least 30 consecutive days) under Title 10 orders. Those who were called to active duty and discharged under honorable conditions may also be eligible.
- Surviving Spouses: Spouses of service members who died in the line of duty or as a result of a service-connected disability and have not remarried, or spouses of service members who are missing in action or prisoners of war.
2. Other Eligibility
- Certain U.S. citizens who served in the armed forces of a government allied with the United States during World War II.
- Certain cadets at the U.S. Military, Air Force, or Coast Guard Academy, midshipmen at the U.S. Naval Academy, officers at the National Oceanic & Atmospheric Administration, and merchant seamen with World War II service.
How to Apply for a VA Home Loan
1. Obtain a Certificate of Eligibility (COE)
- Online: Through the VA's eBenefits portal.
- Lender: Many lenders can obtain this on your behalf.
- Mail: You can apply by mailing VA Form 26-1880 to the VA Loan Eligibility Center.
2. Choose a VA-Approved Lender
- Work with a lender that has VA approval to issue VA-backed loans.
3. Prequalify for Your Loan
- This helps you understand the loan amount you may qualify for and any potential issues early in the process.
4. Complete the Loan Application
- Provide necessary documentation, such as proof of service, financial records, and personal identification.
5. VA Appraisal
- The lender will request a VA appraisal of the property. This ensures the home meets minimum property requirements and establishes its value.
6. Loan Approval and Closing
- Once the lender approves the loan, you'll go through the closing process to finalize the purchase.
Additional Considerations
- Funding Fee: Some borrowers will need to pay a funding fee. There are exceptions who do not pay a VA Funding Fee. For more detailed information talk to your VA Approved Lender.
- Veterans who receive VA compensation for service-connected disabilities
- Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay
- Veterans rated as eligible to receive compensation based on a pre-discharge exam or review
- Veterans who can but are not receiving compensation because they're on active duty
- Purple Heart recipients
- Surviving spouses of veterans who died in the line of duty
- Credit and Income Requirements: While the VA does not set a minimum credit score, lenders typically have their own requirements. Income verification and debt-to-income ratios will also be assessed.
- Occupancy Requirement: The property must be used as your primary residence.
Meeting the eligibility requirements and following the application process, veterans and other eligible individuals can take advantage of the benefits provided by a VA home loan, such as no down payment, no private mortgage insurance (PMI), and competitive interest rates.
