16 Apr VA Home Loan Basics
For regular citizens, purchasing a new home means saving cash for two to three years to be able to pay the down payment. However, qualifying veterans get the benefit of buying a new house with no money down through the VA loan program.
What is a VA loan?
A VA loan works like a regular loan with an exception of a guarantee by the U.S. Department of Veterans Affairs. The loan itself isn’t actually provided by the federal government, but because it is backed by a government agency, lenders feel more comfortable in offering these low-risk loans.
The VA guarantee makes it possible for veterans to own a new home without a down payment, and with looser credit requirements.
How do VA loans work?
Ideally, you will need to fill out paperwork from the VA that will validate your eligibility for the program. This will also determine the maximum entitlement amount you are eligible for.
Not only are VA loans available with no money down, but they also come with lower closing and related fees.
What are VA loan eligibility requirements?
The government places service requirements on active duty, as well as offering an opportunity to get a VA loan for certain military spouses. A detailed description is available on the VA benefits website.
- You’re must be a currently active duty military or an honorably discharged veteran.
- You must have 90 consecutive days of active service during wartime or at least 181 consecutive days of active service during peacetime.
- You must have more than six years of service in the National Guard or Selective Reserve.
Additionally, if your active duty spouse died in the line of duty, you might be able to qualify for a VA loan.
In order to go through the process, you need to obtain a VA Certificate of Eligibility, or COE. Without this certificate, you won’t be able to get your loan.