VA Mortgage Loan

Designed to provide millions of U.S. veterans and their families with affordable housing, the VA loan emerged through the GI Bill of Rights, which was signed off in 1944 by President Roosevelt. The Bill not only eliminated down payment on a house for veterans, but has also contributed to their welfare and the growth of the nation's economy more than any other program in history.

Am I eligible?

Veterans of the U.S. armed services, those currently on active duty or in the reserves and widows and widowers of veterans may qualify for a VA mortgage loan. In order to qualify for a VA guaranteed loan a veteran must:

• Apply for and complete a VA Form 26-1880, Request for a Certificate of Eligibility for Home Loan Benefits. These forms can often be provided by your local lender.
• Provide a completed VA Form 26-1880 along with proof of military service
• Have completed 90 consecutive days of active duty and been discharged under other than dishonorable circumstances during wartime, or
• Have completed 181consecutive days of active duty and been discharged under other than dishonorable circumstances during peacetime, or
• Have completed 2 years of service if enlisted and began service after September 7, 1980 or were an officer and began service after October 16, 1981, or
• Have completed 6 years of service if a National Guard or reservist, or
• Have been discharged due to a service-related disability, certain medical conditions or an involuntary reduction in force, despite not having completed the required amount of active duty time

If you are currently on regular duty, you are eligible for a VA loan after having served 181 days (90 days during the Gulf War) unless discharged or separated from a previous qualifying period of active duty service.

Given that you are not eligible according to the above qualifications and have completed 6 years total in the Selected Reserves or National Guard, you may qualify for a VA loan if you:

• Have been granted honorable discharge, or
• Have been placed on the retired list, or
• Have been transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service, or
• Continue to serve in the Selected Reserves
• Have completed less than 6 years and discharged for a service-related disability

As a widow or widower of a veteran, you may be eligible if you:

• Remain unmarried after your spouse died while in service or from a service connected disability, or
• Are a spouse of a service person missing in action or a prisoner of war

Others who qualify for a VA loan include:

• U.S. citizens who served in the armed forces of a government allied with the United States in WW II
• Citizens who've served as members in certain organizations such as Public Health Service officers, cadets at the United States Military, Air Force or Coast Guard Academy, midshipmen at the United States Naval Academy, officers of National Oceanic & Atmospheric Administration and merchant seamen with WW II service

How does it work?

Qualifying for a VA mortgage loan allows you to borrow a home loan from a private lender without submitting a downpayment. The lender is guaranteed against loss in the case that you or a future owner fail to repay the loan, and this government backed guarantee acts in place of a downpayment.

What are the alternatives?

For people who qualify for a VA mortgage loan, the VA loan is the best option available to them. Other FHA loans are also recommended if you do not qualify according the above requirements, as a FHA loan provides assistance to those with poor credit and are unable to produce a conventional down payment.

Do I really need this type of loan?

VA mortgage loans are designed to help those who qualify secure an affordable home. The benefits of a VA loan include no downpayment or mortgage insurance, easier qualification standards than conventional home loans, more lenient credit and income standards and no prepayment penalties. If you have poor credit or do not have the ability to produce a conventional downpayment, it is recommended that you take advantage of your veterans benefits and utilize the VA loan.

Can I afford a VA mortgage?

Visit VA Loans for a calculator.