Eligibility and Entitlement Information

 

About Home Loans

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.

Purchase & Cash-Out Refinance Home Loans

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.

About the VA Home Loan Guaranty

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.

VA Home Loan Advantages

The guarantee VA provides to lenders allows them to provide you with more favorable terms, including:

• No down payment as long as the sales price doesn't exceed the appraised value.
• No private mortgage insurance premium requirement.
• VA rules limit the amount you can be charged for closing costs.
• Closing costs may be paid by the seller.
• The lender can't charge you a penalty fee if you pay the loan off early.
• VA may be able to provide you some assistance if you run into difficulty making payments.

You should also know that:

• You don't have to be a first-time homebuyer.
• You can reuse the benefit.
• VA-backed loans are assumable, as long as the person assuming the loan qualifies.

Eligibility

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.

VA home loans can be used to:

• Buy a home, a condominium unit in a VA-approved project.
• Build a home.
• Simultaneously purchase and improve a home.
• Improve a home by installing energy-related features or making energy efficient improvements
• Buy a manufactured home and/or lot.
• To refinance an existing VA-guaranteed or direct loan for the purpose of a lower interest rate.
• To refinance an existing mortgage loan or other indebtedness secured by a lien of record on a residence owned and occupied by the veteran as a home.

Eligibility Requirements for VA Home Loans

Service during wartime:

• At least 90 days active duty - with other than dishonorable discharge.
• Less than 90 days active duty - if discharged for a service-connected disability.

Service during peacetime:

• At least 181* days continuous active duty - with other than dishonorable discharge.
•  Less than 181 days active duty - if discharged for a service-connected disability.

 Active-duty service personnel:

• If you are now on active duty, eligibility can be established after 90 days of continuous active duty.  Upon discharge or release from active duty, eligibility must be reestablished.

Selected Reserve or National Guard:

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:

• Were discharged with an honorable discharge.
• Were placed on the retired list.
•  Were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected.
• Reserve after service characterized as honorable service.
• Continue to serve in the Selected Reserve.

*Individuals who completed less than six years may be eligible if discharged for a service-connected disability.

Spouses

The spouse of a Veteran can also apply for home loan eligibility under one of the following conditions:

• Unremarried spouse of a Veteran who died while in service or from a service connected disability, or
• Spouse of a Service member missing in action or a prisoner of war.
• Surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003 (Note: a surviving spouse who remarried before December 16, 2003, and on or after attaining age 57, must have applied no later than December 15, 2004, to establish home loan eligibility. VA must deny applications from surviving spouses who remarried before December 6, 2003 that are received after December 15, 2004.)
• Surviving Spouses of certain totally disabled veterans whose disability may not have been the cause of death. 

Restoration of Entitlement

Veterans can have previously-used entitlement "restored" to purchase another home with a VA loan if:

• The property purchased with the prior VA loan has been sold and the loan paid in full, or

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

Certificate of Eligibility

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.