Home mortgage loans guaranteed by the US Department of Veterans Affairs have been a popular way for veterans and active duty members to pay for their first homes for more than 70 years. Because home loans are secured, many lenders are eager to offer these low-cost home loans for veterans. Although not difficult, the application process is somewhat different than for conventional loans, and many lenders have specially trained departments or staff to help with the required documentation.

Eligibility

If you are a member of the military on active duty for at least 90 days, you are eligible for a VA-guaranteed home loan. Similarly, veterans who have completed between 90 and 181 days of continuous service, depending on the time period, are eligible to apply for these loans. Service members of the National Guard are also eligible for a home loan if they are currently on duty or have served for six years, have been discharged, or are on the retiree or reserve list. Under certain circumstances, spouses of military members may also be eligible for a VA loan.

Certificate of Eligibility

Applicants must document their service in the military with a Certificate of Eligibility. The certificate is issued with several different types of evidence:

• A DD Form 214 for Veterans indicating the nature of the service and the reason for the separation from service.

• For current service members, a current service statement signed by a unit commander, aide, or personnel office

• For current National Guard members, a declaration of service signed by a unit commander, aide, or personnel office

• For discharged National Guard members who were never activated, an NGB Form 22, Separation Report and Service Record

• The surviving spouse who does not receive benefits must file a VA form 21-534

• Surviving spouse receiving benefits must file VA form 26-1817

Additional requirements

In addition to the Certificate of Eligibility, applicants for a VA guaranteed home loan must provide:

• Documentation of sufficient income to meet the loan payments.

• Good credit history – VA lenders set their own minimum credit history requirements for a loan

• Proof that the property can be occupied: VA loan benefits must go to properties that are suitable for occupancy, such as single-family homes, condos, townhouses, and multi-family residences.

• Intent to Occupy Property – First-time home loan applicants must ensure their intention to occupy the property.

• A property appraisal to ensure that the property is sufficiently valued for the loan amount.

Closing the sale

Applicants are encouraged to compare loans from various lenders to ensure the best terms. After the applicant has been approved for the VA guaranteed home loan, they must close the sale of the property, provide proof of homeowner’s insurance on the property, and pay the closing costs. These closing costs are regulated by VA. The title is then issued and insured by a title insurance company to avoid any further claims on the property.

Although the process may seem overwhelming to first-time borrowers, lenders have created VA loan protocols that make the application process easier for veterans and active duty service members to take advantage of this valuable benefit.