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VA Home Loans

The VA Loan began in 1944 through the GI Bill of Rights. VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms. This is one of the benefits earned from military service. VA loans are not obtained through the Department of Veterans Affairs, but they do guarantee the loans.

Benefits of a VA Loan

• 100% financing, no down payment loans are common.
• No Private Mortgage Insurance (PMI).
• No penalties if you prepay the loan.
• Competitive interest rates.
• Loan qualification is sometimes easier than if you were applying for a conventional loan.
• Sellers can pay all closing costs.

Despite all these great reasons, just because a person qualifies for a VA loan doesn't mean it is automatically their best option. A borrower who qualifies for a VA loan should still shop around to see what other options are available to them. In most cases there are limits on the price of house that the VA loan will cover. If the borrower wants to finance a home that has a higher price, they may need to look to a conventional loan program in order to obtain financing for that particular home.

Another thing to keep in mind is that while VA loans do tend to be very flexible in helping veterans to obtain home loans, there are still requirements based on income and credit history. With bad credit or insufficient income, the veteran borrower may have a very difficult time obtaining a loan.

VA Loan Eligibility

Wartime/Conflict Veterans

Wartime/Conflict Veterans who were not dishonorably discharged, and served at least 90 days:

• World War II-September 16, 1940 to July 25, 1947
• Korean Conflict-June 27, 1950 to January 31, 1955
• Vietnam Era-August 5, 1964 to May 7, 1975
• Persian Gulf War-Check with VA regional office for specific eligibility.
• Afghanistan and Iraq-Check the VA's Web site for eligibility guidelines for current service in Afghanistan and Iraq.

Peacetime Service

Peacetime service of at least 181 days of continuous active duty with no dishonorable discharge. If you were discharged earlier due to a service-connected disability, you should speak with the regional VA office to verify eligibility.

• July 26, 1947 to June 26, 1950
• February 1, 1955 to August 4, 1964, or
• May 8, 1975 to September 7, 1980 (enlisted) or to October 16, 1981 (officer)
• Enlisted veterans whose service began after September 7, 1980, or officers whose service began after October 16, 1981, must normally have served at least two years.

Reserves and National Guard

Members who have completed six years of service and have been honorably discharged (or are still serving) may be eligible for a VA loan. Contact your regional VA office for more details.

Other Qualifying Service

Other types of service that may make you eligible for a VA loan:

• Certain US citizens who served in the armed forces of a government allied with the United States during World War II.
• Surviving spouses of eligible persons who died as the result of service or service-connected injuries. The surviving spouse must not have remarried.
• The spouse of any member of the Armed Forces serving on active duty who has been listed as a prisoner of war or missing in action for more than 90 days.

Applying for a VA Loan

You can apply for a VA loan with any mortgage lender that participates in the VA home loan program. You can apply for a VA Loan online also right here at Lender411.com. At some point, you will need to get a Certificate of Eligibility from VA to prove to the lender that you are eligible for a VA loan. You can apply for a Certificate of Eligibility by submitting a completed VA Form 26-1880, Request For A Certificate of Eligibility For Home Loan Benefits, to one of the VA Eligibility Centers, along with proof of military service. In some cases it may be possible for VA to establish eligibility without your proof of service. However, to avoid any possible delays, it's best to provide such evidence.

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