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Home mortgage loans guaranteed by the US Department of Veterans Affairs have been a popular way for veterans and active duty service members to afford their first homes for more than 70 years. Because the home loan is guaranteed, many lenders are eager to offer these low cost home loans for veterans. Although not difficult, the application process is somewhat different from one for traditional loans, and many lending institutions have departments or specially trained staff to help with the necessary documentation.
eligibility
You are eligible for a VA guaranteed mortgage loan if you have been a member of the military on active duty for at least 90 days. Similarly, Ex-Servicemen who have put in 90 and 181 days of continuous service depending on the time period are eligible to apply for these loans. National Guard service members are also eligible for home loans if they are currently serving or have served for six years, have been discharged or are on the retired or stand-by list. Under certain circumstances, spouses of military members may also be eligible for VA loans.
certificate of Eligibility
Applicants are required to document their service in the military along with a certificate of eligibility. The certificate is issued with several different types of evidence:
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A DD Form 214 for ex-servicemen indicating the nature of service and reason for separation from service
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For current service members, a current statement of service signed by a unit commander, adjutant or personnel office
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For current National Guard members, a statement of service signed by a unit commander, adjutant or personnel office
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For discharged National Guard members who were never activated, an NGB Form 22, Report of Separation and Record of Service
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Surviving spouse not receiving benefits must submit VA Form 21-534
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Spouse receiving benefits must submit VA Form 26-1817
additional requirements
In addition to certificates of eligibility, applicants for VA guaranteed mortgage loans must provide:
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Documentation of sufficient income to cover loan payments
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A good credit record – VA lenders set their own minimum credit record requirements for loans
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Proof that the property can be occupied – VA loan benefits must go to properties that are suitable for business, such as single-family homes, condominiums, townhomes and multi-family residences.
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Intent to occupy the property – First time home loan applicants must ensure the intention to occupy the property.
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A property appraisal to ensure that the value of the property is adequate for the loan amount.
close the sale
Applicants are encouraged to compare loans from multiple lenders to ensure the best terms. After an applicant is approved for a VA guaranteed mortgage loan, he or she must close on the sale of the property, provide proof of homeowner’s insurance for the property, and pay closing costs. These closing costs are handled by the VA. The title is then issued and insured by a title insurance company to prevent any further claims on the property.
While the process may seem daunting to first-time borrowers, lending institutions have created protocols for VA loans that facilitate the application process so that veterans and active duty service members can take advantage of this valuable benefit.
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