Who is Eligible for a VA Loan?

If you’re a veteran of the armed forces, you may be wondering if you’re eligible for a VA loan. The answer is yes – but there are a few requirements you’ll need to meet first. In this blog post, we’ll outline everything you need to know about VA loans, from eligibility to the application process.

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Introduction

The Department of Veterans Affairs (VA) home loan program is a great benefit for eligible veterans, active-duty service members, reservists, National Guard members, and certain surviving spouses. With a VA loan, you can purchase a home with little to no down payment and without having to pay private mortgage insurance (PMI).

Basic Eligibility Requirements

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. You must be a qualifying veteran in order to obtain a VA loan.

The Veteran Must Have Served in the Military

In order to be eligible for a VA loan, the Veteran must have served in the military. The minimum amount of time the Veteran must have served depends on when he or she served. Veterans who served before September 7, 1980 must have served at least 180 days of active duty. Veterans who served after September 7, 1980 must have served at least 24 months or the full period for which they were called to active duty (with some exceptions), whichever is less. Reservists and National Guard members must have completed 6 years of service in order to be eligible for a VA loan.

The Veteran Must Meet the Length-of-Service Requirements

In order to qualify for a VA loan, the veteran must have served on active duty for a minimum of 90 days during wartime, or 181 consecutive days during peacetime. Service members who were discharged due to a service-related disability after serving for at least 90 days during wartime or 181 days during peacetime also meet the service requirement for VA home loan eligibility. Veterans who served in the National Guard or Reserves may also be eligible if they completed a minimum of six years’ service, with at least 90 days of that service taking place during wartime.

The Veteran Must Have a Certificate of Eligibility

To get started, the Veteran must obtain a Certificate of Eligibility (COE). The COE is required to confirm to the lender that the Veteran is entitled to benefits. Veterans can obtain their COE in many ways:

-Aside from entitlement, there are a few other basic eligibility requirements for VA home loans:
-The borrower must intend to personally occupy the property as a primary residence.
-The veteran must meet service requirements set forth by the Department of Veterans Affairs. In general, most people who served after September 7, 1980, for at least 181 days on active duty or 90 days during wartime are eligible. Reservists and National Guard members may also be eligible with six years of service. Service members who were released from active duty due to hardship, reduction in force or certain medical conditions may also be eligible.
-There is no minimum credit score required for a VA loan, but lenders typically require a FICO score of at least 620.
-Borrowers must have enough dependable income to cover their monthly expenses — including their new mortgage payment — and have enough left over to cover things like credit card bills and student loan payments.
-VA loan applicants must also prove that they can afford the costs associated with owning a home, such as property taxes, insurance and repairs.

Additional Eligibility Requirements

There are a few additional eligibility requirements for a VA loan that are not required for other loans. These include being a veteran, active duty service member, or reservist, as well as having a valid Certificate of Eligibility (COE). You will also need to meet the minimum service requirements, which vary depending on when and how you served.

The Veteran Must Not Have Been Dishonorably Discharged

The veteran must not have been dishonorably discharged from the military. A dishonorable discharge is given for serious offenses and is the most severe form of discharge. Veterans with a dishonorable discharge are not eligible for VA benefits, including VA home loans.

The Veteran Must Have a Good Credit History

In order to get a VA loan, the Veteran must have a good credit history. This means that the Veteran must have made all of his or her payments on time and must not have any outstanding debts. The Veteran’s credit score will also be taken into consideration when determining whether or not he or she is eligible for a VA loan.

The Veteran Must Have a Steady Income

Income is one of the primary factors a lender looks at when considering a VA loan application. The Department of Veterans Affairs doesn’t set a minimum income requirement, but lenders typically require that borrowers have a steady income and enough disposable income to make their monthly loan payments.

Borrowers who are self-employed or who receive income from sources other than wages may have to provide additional documentation to prove their earnings. Lenders will also look at your employment history to make sure you have a steady record of employment.

Conclusion

If you’re a veteran, reservist, or on active duty in the Armed Forces, you may be eligible for a VA loan. If you’re the surviving spouse of a veteran who died in service or as a result of service-related injuries, you may also be eligible. There are a few other circumstances that could make you eligible, so it’s important to check with the Department of Veterans Affairs to find out if you qualify.