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Many people think that they are eligible for a home loan just because they serve in the military. However, there are numerous other requirements that have to be met. The loans are not issued by the Department of Veterans Affairs. The VA does insure a portion of the loan in case the person defaults. This is something that lenders like. However, every lender has their own requirements. That is why it is a good idea to shop around.

Benefits of Getting a VA Loan

  • You will be able to get a loan with a lower interest rate.
  • You probably will not have to make a down payment.
  • You do not have to get mortgage insurance.

Before you decide to buy a home, condo or refinance, you will need to check out the VA loan requirements. The following requirements have to be met in order to get a VA loan:

  • Veterans must be in service for the required length of time.
  • Veterans must be on active duty for a minimum period.
  • People in the National Guard or Reserve may be eligible.
  • Surviving spouses of deceased veterans may be eligible.

How to get Your Certificate of Eligibility

In order to get your VA loan benefit, you will need to get a Certificate of Eligibility. There are three ways that you can get a Certificate of Eligibility. You can use your eBenefits account. You can obtain it from a VA-approved lender. You can also fill out the Request for Certificate of Eligibility form and send it to the regional loan center.

How to Complete Your Certificate of Eligibility

You will need the following to get a Certificate of Eligibility:

  • Your surviving spouse status
  • A Statement of Military Service
  • Discharge information
  • Your Record of Service and Reason for Separation

General VA Loan Requirements

The requirements needed to get a VA loan are more relaxed than the ones for a conventional loan. However, you still need to have a good credit score and sufficient income. The home that is being financed must be your primary residence.

Down Payment Requirements

Most people will not need to make a down payment. You can reduce the VA funding fee by making a down payment. If the purchase price of the home is less than its appraised value, then you may have to pay a portion of the difference.

Loan Limits

There is a limit that is placed on a home that is purchased without a down payment. You can get up to $424,100 without a down payment. These guidelines are identical to the ones that are set by the Federal Housing Finance Agency.

Property Requirements

There are stringent property requirements that you must adhere to. New homes must have a protection plan or warranty. There are also requirements that modular and manufactured homes must meet.

Required Fees

You do not have to get mortgage insurance. However, you will be charged a vA funding fee. This covers the cost of mortgage foreclosure. The fee can range from 1.25 to 3 percent. The branch you serve in, the amount of time that you have been in the military and whether you have used your VA benefits will determine the fee. Surviving spouses and disabled veterans may not have to pay a fee.

Required Credit Score

There is not a minimum credit score required. Every lender has its own credit score requirement. The VA also requires that the lender view the person’s entire requirement.

Debt-to-Loan Ratio

The VA does not have a specific debt-to-loan ratio requirement. However, if your debt to loan ratio is greater than 41 percent, then you will have to provide documentation that proves your ability to pay.

Lender Requirements

Lenders have additional requirements. This includes things such as a limit on the number of reported late payments in a specific time period. You may also be required to have a higher credit score.