VA Home Loans: Home Buying for Active Duty Military and Veterans
VA home loans remove many barriers to homeownership and allow eligible service members and Veterans buy a home more easily. The VA loan is simply the best way to buy a home, compared to all other mortgage types on the market. Why? Because with a VA loan:
- No down payment is required
- No mortgage insurance is required.
- You get a great interest rate.
- More lenient credit guidelines are available to you.
This loan is a benefit only offered to those who have served in the US Armed Forces. Get your VA Home Purchase Quote.
Because VA home loans are backed by the federal government, VA-approved lenders can lend with greater flexibility. Your status as an eligible service member or Veteran lets you take advantage of this home buying benefit that is not available to just anyone
You’ve earned it, so complete a short one-minute form or call us at 1-888-516-9990 to get an interest rate quote for your home purchase.
VA Home Loans Require No Down Payment, No Mortgage Insurance
Unlike FHA loans which require buyers to make a minimum 3.5% down payment, VA home loans require no down payment unless the purchase price exceeds the value of the property. Qualified buyers can buy a home up to $417,000 without a down payment.
Also, VA loans do not require mortgage insurance. Most other loan types require you to pay a significant amount each month to a private mortgage insurance company if you make a down payment of less than 20% of the purchase price. A VA loan eliminates that cost, freeing up that money for other expenses.
VA Eligibility Service Requirements
There are several ways you may be eligible. General guidelines are that you have the following service history:
- 90 days in wartime while in active duty
- 181 days in peacetime while in active duty
- 2 years or the full time called if enlisted after 9/7/1980
- You were separated from service due to a service-connected disability
- You are an unmarried surviving spouse of a service member who was KIA/POW/MIA.
This chart details wartime/peacetime periods.
|Wartime Service||Peacetime Service|
|WWII: 9/16/1940 – 7/25/1947||7/26/1947 – 6/26/1950|
|Korean: 6/27/1950 – 1/31/1955||2/1/1955 – 8/4/1964|
|Vietnam: 8/5/1964 – 5/7/1975||5/8/1975 – 8/1/1990|
|Gulf: 8/2/1990 – TBD*|
Additionally, eligibility may be established for those who have served in the Selected Reserves or National Guard, Public Health Service officers, cadets of the United States Military, Air Force, Coast Guard Academy, and others.
How Do I Know if I am Eligible?
The only way to be 100% sure that you are eligible to purchase a home with a VA loan is to receive a Certificate of Eligibility (COE) from the VA. There are two ways to obtain your COE:
- Have your lender obtain your COE through VA’s lender website, which is only available to lenders. Your loan officer may need your DD-214 (if separated from service) and your Request for COE Form 26-1880. This is the quickest and easiest way to obtain your COE. Lenders can often have your COE in minutes with an online request.
- You can order your COE by visiting VA’s eBenefits website. This process may take longer.
If you are an unmarried spouse of a veteran who was killed in action, you may be eligible for VA financing. You will need to complete Form 26-1817.
Contact our VA loan experts today to receive your COE.
What Do I Need before I Contact a VA Lender?
For your initial call or contact request to a VA lender, you don’t need any documentation. Most of initial information you probably already know.
The lender will request your COE, so they will need your service history information.
To get pre-approved, the VA loan officer will need information on your monthly income, approximate amount in your checking and savings accounts, and a few other personal details. This is all part of the VA home loan qualification process. Our lenders are pre-screened and reputable, so your information is safe and secure.
What Types of Properties can I buy?
The VA home loan allows you to buy many types of properties:
- Single family homes (non-connected)
- Two- to Four-unit homes
- Attached townhouses (VA approved projects only)
- Condominiums (VA approved projects only)
- Mobile Homes/Manufactured Homes (provided the home comes with land, is permanently affixed, and the structure is at least 20 feet wide and 700 square feet if a double-wide.)
- In some cases, you can buy land or a home in need of repairs, with the intent of constructing or repairing the home.
VA loans are only valid on a home that you plan to keep as your primary residence. They cannot be used to obtain a rental home, investment property, or second home. They can, however, be used to purchase a 2- to 4-unit property even if you live in one unit but rent out the rest.
Homes must also meet Minimum Property Requirements (MPRs), which are standards for the condition of the home. For an in-depth look at MPRs, see our blog post or contact one of our VA loan professionals.
Ways You can use a VA Purchase Loan
- To purchase a new or used move-in ready home
- To purchase land and finance construction of a home
- To purchase a home and finance repairs needed
- To purchase a home and finance energy improvements and upgrades
Check with a VA-approved lender to make sure they provide construction or repair VA financing.
11 Steps to Buying Your Home with a VA Loan
The process to purchase a home with VA financing is much like purchasing a home with any kind of loan. You may encounter is a few extra steps, however, like obtaining your COE (usually done by the lender), and completing/obtaining VA forms such as the 26-1880 and DD-214. Here are some useful tips on the home purchase process:
- Do some budgeting. Figure out how much you are comfortable paying each month. Be sure to factor in expenses that go along with being a homeowner: property taxes, homeowner’s insurance, home repairs, increased utility costs, higher commuting costs, etc. Make sure you don’t commit to a bigger home payment than you can afford.
- Get Preapproved. Your lender will tell you how much you qualify for after receiving all your information. There’s no use looking for a home until you know your lender-approved purchase price. Your lender may need your 26-1880 and DD-214 to issue a preapproval. To get pre-qualified now, contact one of our VA loan professionals. During the prequalification process is also a great time to educate yourself about VA fees, loan limits, and requirements.
- Shop Around for Lenders. Just because you have a pre-approval from a lender or loan officer does not mean you need to use him or her. You can shop around with other VA-approved lenders to make sure you are getting the best rate and fee combination. See our blog post on this subject.
- Find a Reputable Buyer’s Real Estate Agent. The best thing about being a home buyer is that your real estate agent is usually free to you. In most cases, the seller pays both the buyer’s and the seller’s real estate agent commissions. That means you get to choose a great agent who will help you find a home, do the paperwork, negotiate, and guide you through the real estate aspects of the transaction – for free. There’s no reason not to find a great buyer’s agent. Hint: don’t use the agent who is selling the home. He or she will not have your interests at heart, but the seller’s.
- Shop for a Home and Make an Offer. This sounds simple, but can be the longest part of the process. And rightly so. Don’t settle for a home you know won’t suit you for years to come. It’s worth the extra time and work to find the right home. Your buyer’s agent is more than happy to show you as many homes as you’d like to see. Once you’ve found a home, your agent will write up a purchase contract. If the seller accepts your offer, you can proceed with your home purchase.
- Deposit Earnest Money. Many first time homebuyers are surprised that they have to deposit somewhere around 1%-5% of the purchase price of the home when they make an offer. Earnest money is usually required because it tells the seller that you are “earnest” about your desire to buy the home. The earnest money is applied toward the down payment or closing costs when the transaction closes. If you are not making a down payment and all closing costs are covered by credits, your earnest money will be refunded to you.
- Get a home inspection. This will help you avoid costly repairs after you’ve purchased the home. Typically you can back out of your offer and receive your earnest money back as long as there is an “inspection contingency” written into the purchase contract.
- Submit updated documentation to your lender. When your purchase contract is signed by you and the seller, send it along with updated documentation to your lender. If you’ve taken some time to find a home, any documentation you’ve already submitted may be expired. At this point you may need to sign some loan disclosures. Your lender will submit your file to underwriting. Underwriting will issue a conditional approval, meaning the loan is approved, but needs additional documentation. It’s also a good time to call your insurance agent and get your homeowner’s insurance details squared away.
- Submit underwriting conditions to your lender. Your loan officer will ask for “conditions” – items that were missed upfront or that the underwriter needs more clarification on. Don’t be surprised if you have to supply quite a few pieces of additional documentation at this point.
- Sign final paperwork. Once the lender’s underwriter gives your loan a final approval, they will send final loan documents to the escrow company. You will most likely go to an escrow agent’s office to sign everything. Be sure to review the documentation in regards to interest rate, payment, loan amount, and other vital terms. Check the “HUD-1,” also called the settlement statement, for a breakdown of all the fees. If something doesn’t look right, be sure to call your lender to get your questions answered. If you need to pay any money to close the loan, make sure you have the funds available and bring the cashier’s check or other certified funds to escrow when you sign documents. Your escrow company will tell you the amount to bring.
- Check on the status of loan funding. Your loan is not complete when you sign documents. Your lender could take a few days to up to a week or more to finalize your loan and disburse funds. Once the lender funds the loan, the seller and all other parties are paid and the deal is almost done. The final step is when the transaction is recorded in your jurisdiction’s official records, and the home is yours!
I’m Ready to Take Advantage of my VA Home Loan Benefit
As an eligible veteran, you’ve earned the privilege of using a VA home loan, one of the best mortgage products available today. As a VA buyer, you have an advantage over most home buyers: you don’t need a down payment.
If you’re ready to proceed with buying your home with a VA home loan, call 888-516-9990 to speak with a licensed lender who can answer any questions that you might have and who can help you find the lowest rate on a loan. The home of your dreams is made better with a great loan. Get started today.
Want to know More?
Watch this video for more information on the benefits of a VA home loan.
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