Here’s What You Need to Know. There are many benefits of using a VA Home Loan guaranty, but all too often there is misleading information that can discourage veterans from using them. Here is some basic information about housing benefits for veterans.
Am I Eligible for a VA Home Loan?
In order to be eligible for a VA Home Loan you have to meet the following requirements:
First, you must be one of the following:
1. Veteran – To qualify as a veteran you have to have served:
90 days active duty between 9/16/1940 and 7/25/1947 (WWII)
181 days between 7/26/1947-6/26/1950 (Post-WWII)
90 days between 6/27/1964 and 1/31/1955 (Korean War)
181 days between 2/1/1955 and 8/4/1964 (Post-Korean War)
90 days between 8/5/1964 and 5/7/1975 (Vietnam War)
181 days between 5/8/1975 and 9/7/1980 (Post-Vietnam War)
24 continuous months between 9/8/1980 and 8/1/1990 (or the full period for which you were called or ordered to active duty)
24 continuous months from 8/2/1990 to today.
2. Currently Serving Active Duty – for a minimum of 90 days
3. National Guard or Reserve Member – with six years of service
4. A Surviving Spouse of a Veteran
Second, you need to get your Certificate of Eligibility by going to www.ebenefits.va.gov, or you can contact a lender for assistance. Lastly, you must have suitable credit and sufficient income.
Can I Utilize a VA Loan More Than Once?
There’s a common misconception that you may only use your VA home loan benefits once, or only have one outstanding VA loan at the same time. You are able to use your VA home loan as many times as you wish, but it does consist of some restrictions and may depend on your entitlement amount if you’re trying to take advantage of the 100 % financing option. You can have more than one VA home loan at a time. The fact is, you could have as many as you want but again it will depend on how much entitlement you may have remaining and if you want to utilize the 100 percent financing option.
Just how much Can I Borrow With No Down Payment?
VA loans range from $417,000 to $721,050 with 100 percent financing on a first mortgage, but the loan amount depends on what part of the country you are planning to purchase. If you purchase a home that costs in excess of the county limit, it is necessary to use a down payment.
Also remember even if you’re qualified to receive VA benefits doesn’t mean you qualify for a home loan loan. Obtaining a mortgage loan depends on your specific financial situation and is subject to determination by an underwriter.
To see what your county loan limit, visit: https://www.benefits.va.gov/homeloans/purchaseco_loan_limits.asp
What Can I purchase Using a VA Home Loan?
When it comes to what type of property you can buy with your benefits, you have four options:
Single Family Home
Condo (in VA approved building)
Planned Urban Development (think of a subdivision that has a small association fee)
Multi-unit Residential Building (2 – 4 units)
While each one of the above are approved properties that could be purchased using your benefits, they do come with some restrictions. This is where working with an experienced mortgage lender is vital, as they can walk you through the complete mortgage process.
What Are the Credit Requirements?
The VA itself does not have a credit score requirement, but each bank has their own. If you are worried that you may not qualify for a loan because of your credit score be sure to ask your lender what their minimum credit score requirement is for a VA loan.
What is the Funding Fee?
The VA Funding Fee is a fee the VA charges you to utilize benefits. The VA collects this fee, and it’s used to offset the cost to taxpayers. The Funding Fee can be paid at closing or rolled into the mortgage to be paid throughout the course of your monthly payments. As an example if you buy a home for $100,000 with a funding fee of 2.15 percent, and choose to roll this fee into your loan the new loan amount would be $102,150. There’s one area where the funding fee will not apply, and that’s if the VA has determined that you are collecting a service-related disability. In the event you meet this criteria, the VA will waive your funding fee (unlimited times).
For more information regarding funding fees: https://www.benefits.va.gov/homeloans/documents/docs/funding_fee_table.pdf
Learning the basics of a VA loan and how to properly use your benefits is only a small part of the mortgage process. To better discover how to maximize the use of your benefits consult with a qualified mortgage lender to discuss what works best for you.
*Terms and conditions may vary. Subject to underwriting approval. Equal Housing Lender.
Nick & Cindy Davis are both Veteran’s and have used our VA entitlement before. We can assist you and work with several lenders here in the Tampa Bay and Surrounding areas that can assist you in purchasing your new home. We can always be reached by clicking here or you can simply call us at 813-300-7116 and we can get started working for you.