How to Use a VA Loan

You’ve served our country. Now let us serve you. Find out how to take advantage of your VA loan benefits.

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Overview of the VA Loan

The Department of Veterans Affairs (VA) loan is a benefit available to eligible active-duty service members, veterans, reservists, and national guard members. The loan allows veterans to purchase a home with no money down and no monthly mortgage insurance premiums. VA loans are available through private lenders, such as banks and mortgage companies.

What is a VA Loan?

A VA loan is a mortgage loan that is guaranteed by the U.S. Department of Veterans Affairs (VA). The loan is available to certain qualifying veterans, active-duty service members, reservists, and certain unmarried surviving spouses of veterans. The VA loan program was created to help veterans purchase homes, with preferential terms and rates.

VA loans are made by private lenders, such as banks, credit unions, and mortgage companies. The VA guarantees a portion of the loan, which protects the lender against loss if the borrower defaults on the mortgage. This guarantee allows lenders to offer more favorable terms on VA loans, including low or no down payment requirements and more flexible credit standards.

How to Apply for a VA Loan

If you’re a veteran, reservist or on active duty, you may be eligible for a VA loan. Designed to help with financing, VA loans offer relaxed qualification requirements, no down payment options and other perks not found with conventional loans. You can use a VA loan to purchase a home, make energy-efficient improvements, buy a manufactured home or refinance an existing loan.

There are two ways to apply for a VA loan: in person at a regional Loan Center or online through the Veterans Benefits Portal eBenefits website. You can also get started by talking to a lender. Contact several lenders to compare rates and fees and ask questions about the loan process. Your lender will work with the VA to get your loan approved.

You’ll need to have your Certificate of Eligibility (COE) before you can apply for a VA loan. The COE proves to the lender that you’re eligible for the program. You can get your COE through eBenefits or your lender can help you get it. If you need help understanding your COE, contact your regional Loan Center.

You’ll also need to provide some documentation to your lender, including:
-Proof of income, such as tax returns, W-2s or pay stubs
-Proof of assets, such as bank statements or investment account statements
-A list of debts and creditors
-Your credit score
-Your DD214 (if you’re a Veteran) or other discharge papers (if you’re a reservist or active duty member)

The Benefits of a VA Loan

A VA loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA). The loan may be issued by qualified lenders. The VA loan was created to help veterans finance the purchase of a home.

No Down Payment

The number one advantage of a VA loan is that it enables veterans to purchase a home with no down payment. This is an incredible benefit especially for younger veterans who may not yet have accumulated enough savings for a down payment on a home. In addition, VA loans are one of the few remaining loan programs that offer 100% financing.

Lower Interest Rates

A VA loan is a mortgage loan in the United States guaranteed by Veterans Affairs (VA). The program is for American veterans, military members currently serving in the U.S. military, reservists and select surviving spouses (provided they do not remarry) and can be used to purchase single-family homes, condominiums, multi-unit properties, manufactured homes and new construction.

Lower Interest Rates
One of the biggest advantages of a VA loan is that qualified borrowers can usually obtain a lower interest rate than what’s available with other types of financing. That’s because lenders are willing to offer more favorable terms to borrowers who are backed by the VA.

Lenders also may be more willing to work with borrowers who have lower credit scores and may offer more lenient underwriting standards for VA loans than for other types of financing.

No Mortgage Insurance

One of the biggest advantages of a VA loan is that you won’t have to pay monthly mortgage insurance. Mortgage insurance protects the lender if you default, and it’s required on all conventional loans with a down payment of less than 20%. With a VA loan, you can buy a home with zero down and not have to pay this costly insurance.

How to Use a VA Loan

A VA loan is a mortgage loan that is guaranteed by the U.S. Department of Veterans Affairs (VA). The loan is available to veterans, active duty service members, and reservists. The VA loan program is a great benefit for veterans and service members who are looking to purchase a home. In this article, we will cover how to use a VA loan.

Purchase a Home

If you’re a qualifying veteran, you can use a VA loan to buy a primary residence with no money down. Veterans are also exempt from paying certain closing costs, including the VA funding fee. You can finance up to 100% of the purchase price of your home, and you can choose a fixed- or adjustable-rate loan.

Refinance a Home

VA-backed cash-out refinance loans can be used to refinance your existing mortgage and pull equity out of your home all in a single loan. Cash-out refinances are available through approved lenders across the country.

The VA doesn’t have a minimum credit score requirement, but most lenders do. Even so, there’s hope if your score isn’t great. The Veterans Homeownership and Assistance Program provides eligible veterans with credit counseling and financial education. You may also be eligible for the Veterans Retraining Assistance Program if you’re unemployed and need to transition to a new career.

Get a VA Loan for a Manufactured Home

You can buy a manufactured home with a VA-backed loan as long as the home is:
-On a permanent foundation that meets standards set by the Department of Veterans Affairs
-That is not in a flood zone

If you have an existing VA-backed loan on your manufactured home and you want to reduce your monthly payments or shorten the term of your loan, you can refinance your loan. You must occupy the manufactured home as your primary residence to get a VA direct or VA-backed loan for it. To get a manufactured home through a builder, contact them to learn whether they offer any construction financing options. You may also be able to buy a modular or prefabricated home with a VA-backed mortgage.