What are the Qualifications for a Veterans Affairs Loan?

For many Americans, buying a home requires a significant cash down payment, making the goal of homeownership out of reach. Former service members can qualify for a Veterans Administration (VA) loan due to their own military service or their spouse’s military service. Through the VA loan program, it is possible to purchase a home with little or no money down. 


Understanding a VA Home Loan

The U.S. Department of Veterans Affairs guarantees VA loans. The government does not make the loan, but the government does back the loan. Overall, VA loans pose less risk, making government agencies more comfortable offering these loans to customers. You will be able to get a VA loan without providing a down payment. In some cases, the credit requirements are looser for VA loans than for other conventional home loans. 

If you are considering applying for a VA loan, it is important that you meet the VA requirements. Your lender will still need to approve your loan, it is not guaranteed just because you served in the military. If you do qualify for a home loan, however, this type of loan can help you secure homeownership.


Qualifying for a VA Home Loan

The best way to discover whether or not you are eligible for the VA is to fill out the paperwork. If you qualify, you will receive an entitlement. The entitlement is the dollar amount that the VA will guarantee for your home loan. Even though the VA only guarantees a certain amount, lenders are sometimes willing to loan you up to four times the amount of your VA entitlement. 

It is possible for you to get a VA loan without putting any money down. Instead of paying for private mortgage insurance, or PMI, you will pay what is called a VA funding fee when your loan closes. The process can be somewhat complicated, but with a little help, you will be able to get through the process and buy your home. 


What are the VA Loan Eligibility Requirements?

You will need to ensure that you are eligible for a VA loan in the first place. The federal government requires that you have served on active duty. Certain qualifying military spouses can also qualify for VA loans. You will be able to get more information on the VA’s website for your specific requirements. The basic requirements for a VA loan are as follows:

  • You are an honorably discharged veteran or you are currently active military
  • You served at least 90 consecutive days of active military service during wartime, or you served at least 181 consecutive days of active duty during peacetime
  • You spent more than six years in the National Guard or in the Select Reserve
  • Your spouse died while in the line of duty

Before you use the VA loan, you will need to secure your VA loan Certificate of Eligibility. You will only be able to secure these benefits through your military eBenefits portal online, or by applying for the VA loan through your home loan lender. 


Preparing to Apply for Your VA Loan

To apply, you will need to provide information, based on your current state. If you are a veteran, you will need to submit your DD Form 214. If you are an active duty service member, you will need to provide a signed statement of service. Your signed statement of service needs to include the following:

  • Your date of birth
  • Your full name
  • Your Social Security number
  • The date that you started on active duty
  • Any lost time
  • The name of the command that is providing your information

If you are trying to become eligible through your Reserve or National Guard service, or you are a surviving spouse, you will need to provide different types of documents that prove your eligibility. Your VA home loan lender will be able to provide you with a list of information you will need to gather any relevant paperwork. 


VA Home Loan Occupancy Requirements

You will also need to meet occupancy requirements to qualify for a VA home loan. For example, you must intend to live in the home you are attempting to finance as your primary residence. You cannot use the home as a commercial investment, or as a vacation home. You might also be able to refinance a VA loan. The VA offers a special program that can help you refinance to a lower VA loan rate, as well.


VA Loan Underwriting Requirements

Every lender has a unique set of requirements to determine which applicants are worthy of taking on. Most lenders will need you to prove the following:

  • You have enough income to make your monthly mortgage payments
  • You do not have a massive debt load
  • Usually, you will need to show that you have at least a 620 FICO Score to secure a loan

If you have filed for bankruptcy in the past, you might still be able to secure a VA loan, as long as enough time has passed since you filed. 


What are the Limits for VA Loans in 2020?

There are currently no limits for VA loans. If you have a full VA loan entitlement, there are no limits on how much you can finance for your home loan. Importantly, your entitlement will still be based on your lender’s limits. In other words, just because the VA lets you borrow an unlimited amount, your lender will still have their own criteria for deciding how much money you can borrow for your home. 


Contact Our Experienced VA Loan Professionals Today

If you are hoping to use a VA loan to purchase a home, Justice Robers, your mortgage lender, can help. We are located in Federal Way, Washington, and we are on a mission to help as many clients as possible purchase a home. Fill out an online application today or contact one of our friendly mortgage experts to learn how we can help you achieve your dreams.

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