It is fairly easy to finance a home under the VA Home Loan Program.
- Obtain counseling.
This isn’t required under the VA Home Loan Program, but it’s certainly a good idea — especially for the first-time home buyer. Prepurchase counseling gives you information on
- The process of buying a home
- The key players in the home-buying process
- Debt management
Housing counseling is usually free. The Department of Housing and Urban Development (HUD) maintains a toll-free number and Web site for this purpose. To locate a nearby housing counseling office, call 800-569-4287, or visit HUD’s Web site at www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm
- Find a home
Look for the home of your dreams, and once you find it speak with the seller or Realtor about purchasing. You can sign a contract to purchase if it’s conditioned on approval of your VA home loan.
- Select a lender
Almost all lenders participate in the VA Home Loan Program, but you should still look around to find the best possible terms.
- Obtain a Certificate of Eligibility
The VA has to certify that you are eligible for the program, and will give you a certificate. Lenders can obtain the certificate for you through the Automated Certificate of Eligibility (ACE) system. This can save you days and days of time, so ask you lender about the option.
If your lender doesn’t have access to ACE, you can apply for a Certificate of Eligibility by submitting a completed VA Form 26-1880. You can obtain this form from any VA regional center (see Appendix B) or print it from the VA’s Web site at www.vba.va.gov/pubs/forms/vba-26-1880-ARE.pdf.
Proof of military service is also needed.
Mail the completed application to VA Loan Eligibility Center, P.O. Box 20729, Winston-Salem, NC 27120. For overnight delivery, VA Loan Eligibility Center, 251 N. Main St., Winston-Salem, NC 27155.
- Get a VA appraisal
The VA assigns a licensed appraiser to determine the value of the property. The appraiser issues a Certificate of Reasonable Value. The VA guarantees the loan, not the condition of the property, so in addition to the appraiser you should hire your own inspector.
Wait for the lender to let you know the status of the loan. This can take awhile if your employer is slow in returning verification, or if your credit rating needs to confirm with out of state creditors. It should take about 4 to 6 weeks to hear back on a decision.
- Attend the loan closing
The lender will explain the loan terms and how to make monthly payments. You will sign the related papers, and you’re all set.
- Move in!
The loan is sent to the VA for guaranty, and you can move into your new home. The VA annotates your Certificate of Eligibility to reflect the use of entitlement, and returns it to you.