The Veteran Administration's Loan, established in 1944 under the Servicemen's Readjustment Act, commonly known as the GI Bill, was enacted into law by President Franklin D. Roosevelt. This program was created to offer Veterans a federally guaranteed home loan without requiring a down payment. Private lenders, including banks, savings and loans, and mortgage companies, extend VA loans to eligible Veterans for the purpose of primary residence acquisition. The lender is safeguarded against losses in the event of loan defaults, with the likelihood of default varying depending on the chosen program option.
Wartime/Conflict Veterans:
Veterans who served for at least 90 days and were not Dishonorably Discharged:
Peacetime Service:
Requirements for peacetime service:
Reserves and National Guard:
Eligibility for certain U.S. Citizens who served in the Armed Forces of a government allied with the United States during World War II. Eligibility for the surviving spouse of an eligible Veteran who died as a result of service, and has not remarried. Eligibility for the spouse of an Armed Forces member who served Active Duty and was listed as a POW or MIA for more than 90 days.
A VA home loan is intended for financing your primary residence within the United States and its territories. You have various options for the type of home you can purchase, including:
Financing up to 100% with no down payment required No need for Private Mortgage Insurance (PMI) No penalties for prepaying the loan Competitive interest rates Easier qualification compared to a conventional loan Sellers can contribute towards some of the closing costs Can be combined with additional down payment assistance to lower closing costs
You have the option to apply for a VA Loan through any mortgage lender participating in the program. Alongside the application requirements from your chosen lender, you will need the following during the application process:
Certainly, your eligibility is reusable based on specific circumstances. If you have paid off your previous VA Loan and sold the property, you have the option to have your eligibility reinstated. Additionally, as a one-time opportunity, you can restore your eligibility if your prior VA Loan has been paid off, but you still retain ownership of the property. In both cases, the Veteran needs to submit a completed VA Form 16-1880 to the VA Eligibility Center. To expedite processing, it is recommended to include evidence of the full payment of the previous loan and, if applicable, documentation that the property has been disposed of. This could involve providing a paid-in-full statement from the former lender or a copy of the HUD-1 settlement statement.
VA Loans originated before March 1, 1988, are assumable without the need for qualification by the new buyer. In the event of a default by the buyer, the Veteran homeowner may bear liability for the funds.
Certain sellers may express reluctance to engage with individuals securing a VA Loan due to the lengthier processing time compared to a conventional loan.
Sellers are frequently requested to contribute towards a portion of closing costs, making them less inclined to negotiate the sales price of the home.
