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Veterans Affairs (VA) home loans are mortgages that are insured by the VA. The loans are made by mortgage lenders and banks. Service members, veterans, – and eligible surviving spouses may qualify for VA home loans. Note that this blog post is ONLY about home purchase loans utilizing VA loans – same guidelines may not apply for VA refinance or Interest Rate Reduction.
VA Mortgages eligibility is based on the veteran’s service length and type of military service. Generally speaking, VA determines that veterans who fulfill the criteria below are eligible for the VA home loan benefit:
- Veterans with two years of continuous military services and an honorable discharge
- Veterans with six years of service in the Selected Reserves or National Guard and an honorable discharge
- Veterans with 90 days active-duty wartime service and an honorable discharge
- Veterans with 181 days of continuous active-duty during peacetimes listed below and an honorable discharge:
- July 26, 1947 – June 26,
- 1950 February 1, 1955 – August 4,
- 1964 May 8, 1975 – August 1, 1990
- Un-remarried surviving spouse of a veteran
- Eligibility determined by Veterans Administration (VA)
- Veteran must have been totally disabled at the time of death or died on active-duty or as a result of service-connected injuries or illness – VA determines cause of veteran death
- For Interest Rate Reduction Refinance Loans (IRRRL), the Certificate of Eligibility must be in the deceased veteran name and social security number
- For purchase and cash-out transactions, the Certificate of Eligibility must be in the surviving spouse name
Obtaining Certificate Of Eligibility
A certificate of eligibility is required for all VA home purchase loans. This can be obtained through VA’s website https://vip.vba.va.gov or by contacting the VA’s eligibility center at 1700 Clairmont Road, Decatur, GA 30031 Phone: 888-768-2132. Most regional loan centers also prepare a certificate of eligibility for walk-in veterans.
Loan To Value (LTV) Ratio And Downpayment Requirements
You can borrow up to 100% of the purchase price (or appraised value whichever is lower). Funding fees (see later in the post) can also be financed in the loan amount. No minimum down payment or cash investment required unless:
- Your available entitlement is less than 25% of the total loan amount, including funding fee or
- There is a Co-borrower on the loan who is not a veteran or the spouse of the veteran borrower
- Your available entitlement is less than 25% of the total loan amount, including funding fee or
- There is a Co-borrower on the loan who is not a veteran or the spouse of the veteran borrower
VA LOAN AMOUNT LIMITS
- The Department of Veterans Affairs (VA) Loan Guaranty program does not set a maximum amount that an eligible veteran may borrow using a VA guaranteed loan. For 2018, the maximum loan limit can be higher than $1M in certain counties. However, most lenders don’t lend beyond $679,650. All the counties qualify for a loan amount of $453,100 (or lower).
Credit Score Requirements
- Most lenders would require a minimum credit score of 640.
Occupancy
Veteran must either occupy the home at the time of closing or certify that he or she will occupy within 60 days of loan closing. The veteran’s spouse who occupies the home satisfies the occupancy requirement when the veteran cannot occupy the home due to over-seas active-duty assignment.
VA Loans Funding Fees
See the chart below (updated January 1, 2020) for funding fees. As noted above funding fees can be added to the loan amount and you do not need to pay this from your pocket at close.
Occupancy
Only VA approved condos are eligible for VA financing. To check whether a condo is VA approved or not go to https://vip.vba.va.gov/portal/VBAH/VBAHome/condopudsearch