Home mortgage loans guaranteed by the US Department of Veterans Affairs have been a popular way for veterans and active duty service members to afford their first homes for more than 70 years. Because home loans are secured, many lenders are eager to offer these low-cost home loans for veterans. Although not difficult, the application process is somewhat different than for conventional loans, and many lending institutions have specially trained departments or staff to help with the required documentation.

Eligibility

If you are a member of the military on active duty for at least 90 days, you are eligible for a VA-guaranteed home loan. Similarly, veterans who have served between 90 and 181 days of continuous service, depending on the time period, are eligible to apply for these loans. National Guard service members are also eligible for a home loan if they are currently serving or have served six years, have been discharged, or are on the retired or waiting list. Under certain circumstances, military spouses may also be eligible for a VA loan.

certificate of eligibility

Applicants must document their military service with a Certificate of Eligibility. The certificate is issued with a number of different types of evidence:

• A Veterans DD 214 form indicating the character of service and reason for separation from service

• For current service members, a current service declaration signed by a unit commander, adjutant, or staff office

• For current National Guard members, a declaration of service signed by a unit commander, adjutant, or staff office

• For discharged National Guardsmen who were never activated, a Form NGB 22, Report of Separation and Service Record

• Surviving spouse not receiving benefits must file VA Form 21-534

• Surviving spouse receiving benefits must file VA Form 26-1817

Additional requirements

In addition to the Certificate of Eligibility, applicants for a VA-guaranteed home loan must provide:

• Documentation of sufficient income to pay loan payments

• A good credit history: VA lenders set their own minimum credit history requirements for a loan

• Proof that the property can be occupied: VA loan proceeds must go to properties that are suitable for occupancy, such as single-family homes, condominiums, townhomes, and multi-family residences.

• Intent to Occupy: First-time home loan applicants must ensure their intent to occupy the property.

• A property appraisal to ensure the property is valued sufficiently for the loan amount.

closing the sale

Applicants are encouraged to compare loans from various lenders to ensure the best terms. After the applicant has been approved for the VA-guaranteed home loan, he or she must close on the sale of the property, provide proof of homeowner’s insurance on the property, and pay closing costs. These closing costs are regulated by the VA. The title is then issued and insured by a title insurance company to prevent any further claims on the property.

Although the process may seem daunting for first-time borrowers, lenders have created VA loan protocols that make the application process easy so veterans and active duty service members can take advantage of this valuable benefit.