Veterans who were discharged under honorable conditions, active-duty military members, and surviving spouses all qualify for the VA home loan program. Over the course of the program, more than 21 million people have used this loan program to pay for their new home. There are many benefits to the VA loan program, but the most popular one is there is no requirement for a down payment. These loans also offer competitive rates and there is no requirement for mortgage insurance. The Department of Veteran Affairs does not actually provide the loans. Instead, they guarantee a portion of the loan amount against default.
VA home loans may be used for many different things.
– They may be used to buy a primary residence such as a single-family house, townhouse or condominium.
– The loan funds may be used for new construction of a primary residence.
– Funds may also be used to both purchase and then make improvements to a primary residence.
– VA loan funds may also be used to upgrade to energy efficient appliances or make other types of energy efficiency improvements.
– The funds from a VA home loan may also be used to purchase a manufactured home as well as a lot for the home.
Not everyone is eligible for the VA home loan program. Applicants must meet one or more of the following conditions:
– The applicant must have served at least 90 days on active duty during wartime.
– The applicant must have served at least 181 days on active duty during peacetime.
– An applicant must have served more than six years in the National Guard or the Reserves.
– The applicant is a surviving spouse of a military member who dies while on active duty or as a result of a service-related disability.
There are certain basic service requirements outlined by the Department of Veterans Affairs that any applicant must meet to be eligible for the VA home loan program. The ultimate decision on who is eligible for a VA home loan program is made by the Department of Veterans Affairs.
Eligibility requirements for the VA home loan program consist of either wartime or peacetime. In order to qualify for a VA loan, applicants must meet at least one of the service requirements as outlined by the Department of Veterans Affairs.
There are also other requirements that applicants must meet in order to qualify for the VA home loan program. First, the applicant must reside in the home financed by the loan and use it as their primary residence. Applicants will be required to certify their occupancy in the home for a reasonable length of time, usually six months to a year. The applicants must also agree to begin residing in their new home within 60 days of closing on the VA loan. If an applicant is active duty military and deployed at the time of closing, they can request and will usually receive an extension for up to 12 months on this requirement. The spouse of the applicant is the only relative who can also meet the occupancy requirement of a VA home loan. Homeowners can also apply for a VA streamline refinance loan. These may only be used on a home the applicant either currently occupies or occupied in the past.
Any applicants for a VA home loan must also be financially qualified for the loan amount. The applicants and any co-borrowers must provide proof of an adequate income to meet their financial obligations. They must also have a satisfactory credit report and score. VA lenders have flexibility in deciding if an applicant is a good credit risk, according to VA guidelines. Lenders approved for VA loans are allowed to set their own minimums for applicant credit scores. The VA does recommend that any applicant has no more than a 41 percent debt-to-income ratio along with enough residual income to cover basic living expenses. A VA streamline refinance loan often does not require credit or income pre-qualification.