Affordable Home Ownership

VA Home Loans for Military / Buy A Home With $0 Down or Refinance Your Current VA Loan


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Military Mortgage Advisor

What is a VA Loan?

Veterans Affairs (VA) home loans are specialized home loans that are offered to people who are currently serving or who have previously served in the United States military, or who are eligible surviving spouses of U.S. service members.

VA home loans originated in 1944 with the passage of The Servicemen’s Readjustment Act, which enabled additional benefits for Veterans seeking to buy their own homes. VA home loans are offered by private lenders and banks but are financially guaranteed by the U.S. Department of Veteran Affairs to help current and former military personnel receive favorable terms on their mortgage loans. The VA backs VA home loans in the case that the borrower defaults. This federal VA loan guarantee provides a safety net for lenders and entices them to lend to active servicemen and Veterans. Because of this, VA home loans are highly accessible and affordable for those who qualify.

Understanding VA Loan Benefits

VA Loans offer several benefits to current and former military service members, including:

  • No down payment necessary
  • Interest rate is negotiable
  • Mortgage insurance is eliminated
  • Closing costs are similar to other financing types
  • The opportunity to pay the VA funding fee as well as reduced funding fees as long as you put at least 5 percent down. A special exception is made for Veterans who are already receiving VA compensation.
  • The ability to prepay without penalty
  • For Veterans who have defaulted on payments, a VA loan can provide assistance

Should you Get a VA Home Loan?

VA Loan lenders offer several different types of VA mortgages for all kinds of situations, including:

  • Buying a single-family home, a VA-approved property, a co-op unit, or a condominium
  • Building a single-family home
  • Refinancing a mortgage
  • Making major home improvements or renovations to your current residence

There could, of course, be even more options than those listed above. That’s why at MortgageAdvisor.com, we focus on finding you the right lender, so you can get a mortgage that works best for you and your lifestyle.

Types of VA Mortgage Loans

There are many different types of loans that are accessible for service members through the VA guaranteed loans program:

  • Purchase Loan - buy your home at a competitive interest rate and if you qualify, without a required down payment or mortgage insurance.
  • Cash-Out Refinance - if you’ve built up equity in your home, you have the option to take cash out for things like school, home improvements, and paying off debt.
  • Interest Rate Reduction Refinance Loan (IRRRL) - this is also known as the Streamline Refinance Loan. By refinancing, you may be able to get a lower interest rate on your current VA loan.
  • Native American Direct Loan (NADL) Program - if you’re an eligible U.S. Native American Veteran and your current or desired home is on Federal Trust Land, this program can help you finance the purchase, construction, or improvement of your home.
  • Adapted Housing Grants - this program helps Veterans who may have a permanent or total service-connected disability to build or purchase an adapted home or modify an existing home that would accommodate their disability.

 

What is the Maximum VA Loan for a Veteran?

There are limits on VA home loans that are factored in when calculating the maximum amount that can be borrowed in each county. Typically, a Veteran can get up to $424,100 on average for a VA Loan with no money down. In higher priced regions of the U.S., a Veteran can borrow up to $721,050 for a VA mortgage.

 

What Can You Afford With a VA Home Loan?

There are limits to the amount of loan you can get with a VA home loan. These limits are based on the amount of liability the VA will assume, which affects the loan amount a lender will offer. Find loan limits for your area, here. You will also want to be sure that the home you buy will fit within your budget. 

VA Loan Qualifications

You are only able to get access to VA mortgages if you are one of the following:

  • A Veteran
  • Reserves/National Guard member
  • Active-duty military service member
  • An eligible surviving spouse

If you meet one of the key qualifications above and you have sufficient income to meet your anticipated monthly mortgage obligations, have a satisfactory credit rating, and a valid Certificate of Eligibility (COE), you should be able to qualify for a VA Loan. These loans are highly appealing because they do not require a down payment and eliminate private mortgage insurance.

VA Loans Eligibility Requirements

In order to receive a Certificate of Eligibility (COE) for a VA Loan, the following requirements are listed for Veterans, active-duty personnel, spouses, and other eligible individuals. These requirements help the VA to evaluate your loan eligibility based on your service commitment, duty status, and character of service.

VA Home Loans Eligibility Requirements for Veterans

Source: http://benefits.va.gov

VA Home Loans Eligibility Requirements for Active Duty Service Members

Source: http://benefits.va.gov


VA Home Loans Eligibility Requirements for Spouses of Service Members

If you are a spouse of a military member, you can qualify for a VA Home Loan as long as you fit within one of these situations:

  • Unremarried spouse of a U.S. Veteran who has passed away during service or from a service-connected disability
  • Spouse of a prisoner of war or service member missing in action
  • Surviving spouse of a deceased Veteran who remarries on or after turning 57 years of age, and on or after December 16, 2003
  • Surviving spouse of certain totally disabled Veterans whose impairment may not actually have been the cause of death

Other VA Home Loans Eligibility

If you do not meet the previous conditions but meet one of the following conditions, you may also qualify for a VA home loan:

  • U.S. citizens who completed service in the armed forces or military of any other government who was an ally of the U.S. during World War II
  • Individuals who have served in organizations as Public Health Service officers, cadets at the U.S. Air Force, Military, or Coast Guard Academy, officers of National Oceanic & Atmospheric Administration, midshipmen at the U.S. Naval Academy, Merchant Seamen with World War II service, and others.

Even if you do not meet the requirements in any of the categories above, you may still be eligible for a VA home loan if you were discharged due to any of the following conditions: