FAQMain »» VA Home Loan
|Why Get a VA Loan Over Other Types?|
|Simply put, a VA Home Loan allows qualified buyers the opportunity to purchase a home with no down payment. There are also no monthly mortgage insurance premiums to pay, limitations on buyer's closing costs, and an appraisal that informs the buyer of the property value. For most loans on new houses, construction is inspected at appropriate stages and a 1-year warranty is required from the builder. VA also performs personal loan servicing and offers financial counseling to help veterans having temporary financial difficulties.|
|What if I've Used a VA Home Loan Before?|
|You can have previously-used entitlement "restored" one time only in order to purchase another home with a VA loan if the borrower has paid off the prior loan but still owns the property, and wants to use his entitlement to purchase a second home. This often occurs with active duty borrowers who PCS to a new station but want to keep their existing home for retirement. However if the prior loan has been paid off, AND the property is no longer owned, they can have their entitlement restored as many times as they want. They can re-use their VA eligibility for every home purchase from the first to the last.
Also, veterans who have used a VA loan before may still have remaining entitlement (see chart) to use for another VA loan. A veteran's maximum entitlement is $89,912, and lenders will generally loan up to four times your available entitlement without a down payment, provided your income and credit qualifications are fine, and the property appraises for the asking price. Lenders may require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less.
For Alaska, Hawaii, Guam, and U.S. Virgin Islands? residents, note that maximum original loan amounts have now been increased 50 percent higher for first mortgages.
Remaining entitlement and restoration of entitlement is not automatic. It can be requested through the nearest VA office by completing VA Form 26-1880. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full but has not disposed of the property purchased with the prior VA loan.
|What Service is Not Eligible for a VA Home Loan?|
|You are not eligible for VA financing solely based upon service in World War I, Active Duty Training in the Reserves, or Active Duty Training in the National Guard. Note: Guard and Reservists are eligible if they were "activated" under the authority of title 10 U.S. Code as was the case for the Iraq / Afghanistan.|
|Do All Local Lenders Offer VA Loans?|
|Not necessarily. Choose a VA-approved lending institution that can handle your home loan. A lender can help you review your credit history and determine how much of a loan you can qualify for. Be aware that different lenders have different closing costs and other fees, so it pays to shop around.|
|What Types of Repayment Options are Available?|
|The guarantees thirty-year loans with a choice of repayment plans: Traditional fixed payment (constant principal and interest); Graduated Payment Mortgage, or GPM (low initial payments which gradually rise to a level payment starting in the sixth year); and in some areas, Growing Equity Mortgages, or GEMs (gradually increasing payments with all of the increase applied to principal, resulting in an early payoff of the loan). There is no prepayment penalty.|
|What is the Maximum VA Loan?|
|Although there is no maximum VA loan (limited only by the reasonable value or the purchase price), lenders generally limit the maximum VA loan to $417,000.|
|What is a VA-Guaranteed Manufactured Home Loan?|
|A VA-guaranteed loan can be used to:
buy a home, a manufactured home, or a condominium
buy a lot for a manufactured home
build, repair, or improve a home (including energy efficient improvements)
refinance an existing loan
A VA-guaranteed loan offers a number of safeguards and advantages over a non VA-guaranteed loan. For example, the interest rate is competitive with conventional rates with little or no down payment required. VA-guaranteed loans are made by private lenders, such as banks, savings and loan associations, and mortgage companies. As with any loan, you must apply directly to the lender. Your real estate broker can assist you in finding a lender.
When the loan is approved, VA will guarantee part of it. The amount of VA's guaranty usually depends on the size of the loan. This guaranty protects the lender against loss up to the amount guaranteed by VA. The largest guaranty that VA can give is an amount equal to 25% of the Freddie Mac conforming loan limit for single-family residences. These limits are subject to change each year.
|What Documents Do I Need to Provide the Lender To Receive a VA-Guaranteed Loan?|
|The lender will need a Certificate of Eligibility to prove that you are eligible for a VA-guaranteed loan. Certificates are issued by VAs Loan Eligibility Center in Winston-Salem, North Carolina to eligible persons who apply for the certificate. Often times, your lender may be able to access VAs secure web site and obtain a certificate for you.
You can also get a Certificate of Eligibility (COE) in any of three ways:
1. Apply Online
Go to eBenefits online and select the Log I link under the Housing section on the bottom right. You will need login credentials to request a Certificate of Eligibility (COE). If you need to request login credentials, you can simply click on the "Request/Activate a DoD Self-Service Login" link below the login area.
2. Apply Through the Lender
Your lender can submit your application online for you. Click here for a list of evidence you will need to apply.
3. Apply by Mail
Use VA Form 26-1880. If you can't print the form, just call 1-888-768-2132 and follow the prompts for Eligibility. We can mail it to you.
|Who Is Eligible?|
|Generally, the following persons are eligible:
Veterans who were discharged since 9/16/40, under other than dishonorable conditions
Military personnel on active duty who have served a minimum period
Certain Reservists and National Guard members
Surviving spouses of certain deceased veterans
Note: There are certain other groups of individuals who may be eligible. For information about these groups, contact VA at the toll-free number below.
Contact the VA toll free at: 1-800-827-1000
|How Can I Apply?|
|You can apply by requesting your lender to obtain a certificate for you through VAs secure web site OR by completing one of the following forms and submitting it to the Loan Eligibility Center in Winston-Salem, North Carolina.
Veteran / Servicemember: VA Form 26-1880, Request for a Certificate of Eligibility for VA Home Loan Benefits
Surviving Spouse: VA Form 26-1817, Request for Determination of Loan Guaranty Eligibility Unmarried Surviving Spouse
For More Information, Call Toll-Free 1-888-244-6711 or Visit Our Web Site at:
|Does a Veteran's Home Loan Entitlement Expire?|
|No. Home loan entitlement is generally good until used if a person is on active duty. Once discharged or released from active duty before using an entitlement, a new determination of their eligibility must be made based on the length of service and the type of discharge received.|
|Reservists are Eligible for VA Loans, Too. Who Qualifies?|
|Eligibility extends to members who have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and received an honorable discharge; continue to serve in the Selected Reserves. Individuals who completed less than 6 years may be eligible if discharged for a service- connected disability. In addition, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged honorably are eligible.|
|Can a Veteran get a VA Farm Loan?|
|No, except for a farm on which there is a farm residence that will be personally occupied by the veteran as a home. Other types of farm financing may be obtained through the Farmers Home Administration.|
|Can I Build a Home With a VA Home Loan?|
|Yes. But there are several clauses that may make this difficult to accomplish. Many veterans use their VA Home Loan Certificate of Eligibility to negotiate in good faith a private home construction loan and then refinance the completed home using VA Home Loans.|
|Can You Take Out a VA Loan for a Second Home or Vacation Cabin?|
|The law requires that you certify that you intend to occupy the property as your home. But it specifically provides that occupancy by the veteran's spouse satisfies the personal occupancy requirement. However, there are no provisions for other family members. VA Home Loans are available for a variety of purposes including building, altering, or repairing a home; refinancing an existing home loan; buying a manufactured home with or without a lot; buying and improving a manufactured home lot; and installing a solar heating or cooling system or other weatherization improvements. You are also allowed to buy income property consisting of up to four units, provided you occupy one of the units.|
|Can a Veteran Obtain a VA Loan for the Purchase of Property in a Foreign Country?|
|No. The property must be located in the United States, its territories, or possessions. The latter consist of Puerto Rico, Guam, Virgin Islands, American Samoa and Northern Mariana Islands.|
|If a Borrower has Used a VA Loan in the Past, Can That Person be Eligible Again?|
|Veterans who had a VA loan before may still have "remaining entitlement" to use for another VA loan. The current amount of entitlement available to each eligible veteran is $36,000. Veterans can have previously-used entitlement "restored" to purchase another home with a VA loan if: the property purchased with the prior VA loan has been sold and the loan paid in full, or if a qualified veteran buyer agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full, but has not disposed of the property purchased with the prior VA loan.|
|I am a Veteran who Purchased a Home With my Spouse Utilizing my VA Eligibility. I am now Divorced and my Spouse was Awarded the Home. How do I Get my Eligibility Back?|
|When the property is awarded to the Veteran's spouse as a result of the divorce, entitlement cannot be restored unless the spouse refinances the property and / or pays off the VA loan in full or the ex-spouse is a veteran who substitutes their entitlement.|
|I heard the VA has an Inventory of Foreclosed Homes. How can I Find out More About This?|
|The Department of Veterans Affairs (VA) acquires properties as a result of foreclosures on VA guaranteed loans. These acquired properties are marketed through a property management services contract with Ocwen Federal Bank FSB, West Palm Beach, Florida. Local listing agents through local Multi Listing Systems (MLS) list the properties. A list of properties for sale may also be obtained from Ocwen's website at http://www.ocwen.com/ .|
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