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VA Loans

The VA Loan offers veterans a federally backed home loan that necessitates no down payment. Its purpose is to furnish housing and support for veterans and their families.

Under this program, the Veterans Administration provides lenders with insurance in case of borrower default. This guarantee prompts lenders to provide more favorable interest rates and terms compared to conventional home loans. VA home loans are accessible nationwide, and they often come with reduced closing costs and no prepayment penalties.

Furthermore, veterans at risk of loan default may benefit from additional services provided. Eligibility for VA home loans extends to military personnel who have served either 181 days during peacetime, 90 days during war, or to spouses of servicemen either killed or missing in action.

What is a VA Loan?

The VA Loan, established in 1944 under the Servicemen’s Readjustment Act, commonly known as the GI Bill, was signed into law by President Franklin D. Roosevelt. It was created to offer veterans a federally guaranteed home loan without requiring a down payment. Private lenders such as banks, savings and loans, and mortgage companies extend VA loans to eligible veterans for primary residence purchases. This arrangement safeguards the lender against financial losses in the event of loan default, although depending on the specific program option, defaults may or may not occur.

Who is Eligible for a VA Loan?

  • Wartime/Conflict Veterans

    • 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 the Veterans Administration Office
    • Afghanistan & Iraq – Check with the Veterans Administration Office
    • Veterans Administration website www.va.gov

    Peacetime Service

    At least 181 days of continuous active duty with no dishonorable discharge. If you were discharged earlier due to a service-related disability you should contact your Regional VA Office for eligibility verification.

    • 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 who service began after October 16, 1981, must have completed 24-months of continuous active duty and been honorably discharged

    Reserves and National Guard

    • Certain U.S. Citizens who served in the Armed Forces of a government allied with the United States during World War II.
    • Surviving spouse of an eligible Veteran who died resulting from service, and has not remarried.
    • The spouse of an Armed Forces member who served Active Duty, and was listed as a POW or MIA for more than 90-days.
What type of home can I buy with a VA Loan?

A VA home loan is intended to fund your primary residence located within the United States and its territories. You have various options regarding the type of home you can purchase:

  • Pre-existing Single-Family Home
  • Townhouse or Condominium within a VA-Approved Project
  • Newly Constructed Residence
  • Manufactured Home or Lot
  • Home Refinancing and Specific Home Improvement Projects
What are the benefits of a VA Loan?
  • 100% Financing with No Down Payment Required
  • Elimination of Private Mortgage Insurance (PMI)
  • No Penalties for Early Loan Repayment
  • Competitive Interest Rates
  • Simplified Qualification Process Compared to Conventional Loans
  • Sellers Contribute Towards Closing Costs
  • Opportunity to Combine with Additional Down Payment Assistance for Reduced Closing Expenses
How do I apply for a VA Loan?

You can apply for a VA Loan with any mortgage lender that participates in the program. In addition to the application requirements from your lender, you will need the following at application time:

If I have already obtained one VA Loan, can I get another one?

Your eligibility for a VA Loan can be reused under certain conditions. If you’ve fully paid off your previous VA Loan and sold the property, your eligibility can be reinstated. Additionally, you can have your eligibility restored once on a case-by-case basis if your prior VA Loan has been paid off, but you still retain ownership of the property. In either scenario, veterans need to submit a completed VA Form 16-1880 to the VA Eligibility Center. To expedite processing and avoid delays, it’s recommended to include documentation proving full repayment of the prior loan and, if applicable, evidence of property disposal. This might include a paid-in-full statement from the former lender or a copy of the HUD-1 settlement statement.

Are there any disadvantages to a VA Loan?
  • VA Loans originated before March 1, 1988, can be assumed by new buyers without the need for qualification. However, if the buyer defaults, the Veteran homeowner may become responsible for the funds.
  • Some sellers may hesitate to engage with buyers using a VA Loan due to the longer processing time compared to conventional loans.
  • Sellers are frequently requested to contribute to closing costs, potentially reducing their willingness to negotiate the sale price of the home.