Our VA Loan FAQ tackles the most common questions we get regarding using the VA Loan to purchase a home.
What do you need to prove your military service?
To prove your service and eligibility for a VA Loan you will be required to obtain a Certificate of Eligibility.
Here is the information you may be need to pull a Certificate of Eligibility for your VA Loan.
Currently Serving Regular Active Duty: you will need an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters which identifies you and your social security number, and provides your date of entry on your current active duty period and the duration of any time lost.
Discharged from regular active duty after January 1, 1950: You will need a copy of DD Form 214, Certificate of Release or Discharge From Active Duty should be included with your VA Form 26-1880.
Discharged after October 1, 1979: A copy of DD Form 214 copy will also need be included.
In most cases your lender will be able to guide you through the process of getting your Certificate of Eligibilty.
Can you take out a VA Loan for a vacation home or investment property?
Because VA requires that you certify that you intend to occupy the property as your primary home you can not use the VA Loan to buy a home unless you plan to live in it. The VA specifically provides that occupancy by the veteran’s spouse satisfies the personal occupancy requirement in many cases. However, there are no provisions for other family members. If you were to vacate the home after living in it for a while the home can become a rental property or a vacation home.
Do all local lenders offer VA Home Loans?
The easy answer is yes, most if not all lenders will offer a VA Loan product. Part of the confusion with VA Loans is that many people think you have to go through the VA to get the loan. This is not the case. A lender will originate and service a VA Loan. While the VA will back the loan with the Guarantee Fee and regulate how the loans are done.
While every lender has them as an option that doesn’t mean they fully understand the loan. Be sure you choose someone that has a full understanding of the VA Loan.
Does my eligibility for a VA Loan ever expire?
Once you earn your eligibility for a VA home loan, it never goes away. Those who served 20, 30, even 50 years ago often wonder whether they can still buy a home today if they never used their benefit. The answer is yes!
Can the VA Loan be used more than once?
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. 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.
If you currently have a VA loan and are considering buying a new home using the VA Benefit. It is important that you reach out to your lender to review your entitlement and eligibility as a down payment could be required.
How do I apply for a VA Loan?
You can apply with any lender that offers the program as a financing option. You will go through the same pre-approval process as you would if you were getting any other loan. With the VA loan you will need to obtain a Certificate of Eligibility your lender should be able to get this for you.
Is there a max loan amount for VA Loans?
If you have full entitlement you are able to use the VA Benefit’s zero down loan for any home that qualifies. Many lenders have self imposed loan limits that create a maximum loan amount with in their organization. Some lenders will have different requirements if the loan amount is above conforming loan limits established by the FHFA.
Can I buy a manufactured home with a VA Loan?
You can buy a manufactured home using the VA Benefit. Lenders will have different requirements for the property in order to do the loan.
Who is eligible for a VA Loan?
If you fit into one of the following categories you may be eligible for a VA Home Loan.
- Active duty service members
- Current or former National Guard or Reserve members who have been activated Federal active service
- Current National Guard or Reserve members who have never been federal active service
- Discharged members of the National Guard who have never been activated for federal active service
- Discharged members of the Selected Reserve who have never been activated for federal active service
- Surviving spouses in Receipt of Dependency and Indemnity Compensation (DIC) benefits
- Surviving spouses who aren’t receiving DIC benefits
Is there a minimum service threshold to be eligible for a VA loan?
To be eligible for VA loans, your service requirements are as follows:
- Served 181 days during peacetime (Active duty)
- Served 90 days during war time (Active duty)
- Served 6 years in Reserves or National Guard
- Spouse of service member who died in the line of duty or because of a service-connected disability
Can I use a co-signer?
Co-signers — also called co-borrowers because they’re equally liable for the loan — are allowed but only if the co-borrower is a spouse or another veteran. If the co-signer is not a Veteran or not married to the borrower they will be responsible for half of the entitlement for the loan. This will come in the form of a down payment being needed in order to close the transaction.
What fees should I expect to pay for my VA Loan?
In most cases there will be no down payment required for a VA Loan. In almost every case there will be closing costs included in the transaction. The fees for a VA loan are similar fees for any other mortgage loan. There are lender fees like origination, discount, underwriting, processing, and credit report. And there are settlement fees like title insurance, escrow fee, and document preparation. Additionally there is a VA funding fee that’s specific to VA loans. This list isn’t all-inclusive.
You probably have a lot of questions if you are considering buying a home using the VA Benefit. The first and most important thing you can do is determine if you are eligible for one. Once you are eligible the home loan process is pretty similar to other loan products. Be sure you use a lender with an understanding of how the VA Loan works.