VA helps Service members, Veterans, and eligible surviving spouses become homeowners by providing a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. VA Home Loans are provided by private lenders, such as banks and mortgage companies. VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.
With a Purchase Loan, VA can help you purchase a home at a competitive interest rate, and if you have found it difficult to find other financing. VA's Cash-Out Refinance Loan is for homeowners who want to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements. The Cash-Out Refinance Loan can also be used to refinance a non-VA loan into a VA loan. VA will guaranty loans up to 100% of the value of your home.
Most VA Home Loans are handled entirely by private lenders and VA rarely gets involved in the loan approval process. VA "stands behind" the loan by guaranteeing a portion of it. If something goes wrong and you can't make the payments anymore, the lending institution can go to the VA to cover any losses they might incur. The VA loan guaranty is the "insurance" that we provide the lender.
The guarantee VA provides to lenders allows them to provide you with more favorable terms, including:
You should also know that:
You must have satisfactory credit, sufficient income, and a valid Certificate of Eligibility (COE) to be eligible for a VA-guaranteed home loan. The home must be for your own personal occupancy. The eligibility requirements to obtain a COE are listed below for Service members and Veterans, spouses, and other eligible beneficiaries.
If you are not otherwise eligible and you have completed a total of six credible years* in the Selected Reserve or National Guard (member of an active unit, attended required weekend drills and two-week active duty for training) and one of the following:
*Individuals who completed less than six years may be eligible if discharged for a service-connected disability.
The spouse of a Veteran can also apply for home loan eligibility under one of the following conditions:
Veterans can have previously-used entitlement "restored" to purchase another home with a VA loan if:
A qualified Veteran-transferee (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. Remaining entitlement and restoration of entitlement can be requested through the VA Eligibility Center by completing VA Form 26-1880
What is my Certificate of Eligibility (COE) and how do I obtain it? Typically, your lender can help you obtain your COE through www.ebenefits.va.gov. The Certificate of Eligibility certifies that the borrower has a VA entitlement and is eligible to participate in the program. For more information on how to apply for the COE visit eBenefits , or ask your lender for help.
For a more detailed description of the VA Home loan visit the US Department of Veterans Affairs.