If you serve or have served in the military, you know the demands of the job can dramatically affect you and your family. The great news is that along with those sacrifices, there are some amazing benefits provided to our men and women in uniform. One of those benefits worth taking advantage of is the Veterans Affairs home loan (also called VA loan for short). Among other housing-related programs in connection with the U.S. Department of Veteran Affairs (VA), it provides a financing option for eligible service members, veterans, and surviving spouses to purchase, build, and/or maintain a primary residence.
VA loans are available through VA-qualified lenders like banks and mortgage companies to provide home loan financing with favorable options. For military members, the VA loan program enables eligible veterans and active-duty military personnel to finance up to 100% of a home’s value. Some additional terms worth mentioning include:
VA loans are guaranteed by the Department of Veteran Affairs
Maximum 100% LTV (loan to value) purchase
Seller may pay all or part of buyer’s closing costs and up to 4% of the value of the property in seller concessions
Do you qualify for a VA home loan?
According to the VA, the length of your service or service commitment and/or duty status may determine your eligibility for specific home loan benefits.
Their programs and eligibility requirements include:
Purchase Loan & Cash-Out Refinance: VA loans are obtained through a VA-qualified lender of your choice once you obtain a Certificate of Eligibility (COE). To be eligible, you must have a good credit score, sufficient income, a valid COE, and meet certain service requirements.
Interest Rate Reduction Refinance Loan (IRRRL): The IRRRL is a "VA to VA" loan, meaning it can only be applied to refinance an existing VA loan. An IRRRL can be done only if you have already used your eligibility for a VA loan on the property you intend to refinance. A new COE is not required.
Native American Direct Loan (NADL) Program: The NADL program helps Native American veterans purchase, construct, improve, or re-finance a home on Native American trust lands. First, confirm that your tribal organization participates in the VA direct loan program. NADL loans are obtained through a lender of your choice once you obtain a COE.
Adapted Housing Grants: VA helps veterans with certain total and permanent disabilities related to your military service obtain suitable housing with either a Specially Adapted Housing (SAH) or Special Housing Adaptation (SHA) grant.
How can you get started?
Purchasing a home is one of the biggest decisions a person can make. Make sure you partner with a loan officer that can help guide you through the entire loan process, from gathering up must-have documents, to prequalification and closing. They should also help you obtain the required COE to ensure a timely closing, as well as answer any questions you have about the homebuying process.