VA Loan FAQs and VA
Mortgage Information
In this section, you
will find answers to the most frequent questions we receive about VA
mortgages, interest rates, and other information related to the
mortgage process. If you have a question we do not address, please ask
us directly! Please check our Mortgage
Terms Glossary for commonly used mortgage terminology.
The VA Loan began in 1944 through the original
Servicemen's Readjustment Act, also known as the GI Bill of Rights. The
GI Bill was signed into law by President Franklin D. Roosevelt and
provided veterans with a federally guaranteed home with no down
payment. This feature was designed to provide housing and assistance
for veterans and their families, and the dream of home ownership became
a reality for millions of veterans. 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.
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.
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.
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.
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.
A VA home loan must be used to finance your
personal residence within the United States or its territories, but you
have many choices regarding the type of home you purchase.
- Existing single family home.
- Townhouse or condo in a VA-approved project.
- New construction residence.
- A manufactured home and/or lot.
- Home refinances. Certain types of home
improvements.
You can apply for a VA loan with any mortgage
lender that participates in the VA home loan program. 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.
Yes, your eligibility is reusable depending on the
circumstances. Normally, if you have paid off your prior VA loan and
disposed of the property, you can have your used eligibility restored
for additional use. Also, on a one-time only basis, you may have your
eligibility restored if your prior VA loan has been paid in full but
you still own the property. In either case, to obtain restoration of
eligibility, the veteran must send VA a completed VA Form 26-1880 to
one of the VA Eligibility Centers. To prevent delays in processing, it
is also advisable to include evidence that the prior loan has been paid
in full and, if applicable, the property disposed of. This evidence can
be in the form of a paid-in-full statement from the former lender, or a
copy of the HUD-1 settlement statement completed in connection with a
sale of the property or refinance of the prior loan.
- VA loans made prior to March 1, 1988, can be
assumed with no qualifying of the new buyer. If a buyer of such a
property defaults, the veteran homeowner may be liable for funds.
- Some sellers may be hesitant to work with
someone who is acquiring a VA loan because of their past reputation of
taking longer to process than conventional loans. While the time may
still be a little longer, getting a VA loan is not the lengthy ordeal
it once was.
- Sellers are often asked to pay a portion of
closing costs, so they may not be eager to negotiate the sales price of
the home.
- 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.
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