If you’re looking to buy a home, you should strongly consider using a VA home loan. A big benefit of military service is housing.
As a service member, you’re able to live in barracks or base housing for free; if you’re married or rank-eligible, you can accept a monthly housing allowance to live off base. Basically, you get to live rent- or mortgage-free and still earn a decent paycheck. And those benefits don’t completely stop after your service is up.
Many Veterans are eligible for VA home loans: the only type of home loan where you don’t need a down payment to buy a house. So at any time or point, if you can make the monthly mortgage payments then you can afford a home.
If you’re interested in cashing in on this benefit, take a look at how to apply for a VA home loan.
Not all Veterans are eligible for a VA home loan. Similarly, not all those who are eligible are Veterans.
To get what’s called a Certificate of Eligibility to apply for a VA home loan, you must be:
- Active duty service member who’s served for at least 90 continuous days
- Veteran who served for at least 24 continuous months between 1980 and the present
- Vietnam War Veteran who served for at least 90 days
- Korean War Veteran who served for at least 90 days
- Veteran who served for at least least 181 continuous days between 1955 and 1964
- World War II Veteran who served at least 90 days
- Veteran who served at least 181 continuous days from July 26, 1947, to June 26, 1950
- Veteran who served for less than these periods of time and was discharged due to a service-connected disability
- National Guardsmen or Reservist who served for at least six years
- National Guardsmen or Reservist who served at least 90 full days on active duty between 1990 and today
- Surviving spouse
Typically, you must also have received a discharge that’s other than dishonorable, such as an honorable discharge. If you were discharged for hardship, certain medical conditions, or reduction in force, you may not need to meet the time requirements above.
These people may also qualify for a VA home loan; if you were at some point a:
- Naval Academy midshipman
- Public health service officer
- Cadet at the U.S. Military Academy, Air Force Academy, or Coast Guard Academy
- Officer of the National Oceanic & Atmospheric Administration
- Merchant seaman during WWII
Different Types of VA Home Loans
There are also different types of VA home loans to apply for.
- A VA direct home loan, where the VA acts as your lender. Many times, the VA will offer better terms than a private lender.
- A VA-backed home loan, where the VA stands behind a portion of the loan you get from a lender. This provides less risk for the lender, and around 90% of VA-backed home loans are made without a down payment. To qualify for this, though, the lender may have additional requirements, such as having a high enough credit score.
Here is some more specific jargon for the type of loan you may want to use:
- A purchase loan, which is a VA-backed home loan designed to purchase a house
- Interest Rate Reduction Refinance Loan; if you have an existing VA-backed home loan, you may qualify for this type of loan that lets you refinance for lower monthly payments
- A cash-out refinance loan, where the VA may help you take cash out of your home equity to pay off debt or other needs
- Native American Direct Loan Program for Native American Veterans or Veterans married to Native Americans. This direct loan helps you buy, build, or improve a home on federal trust land.
How To Apply For a VA Home Loan
The process of applying for a VA home loan is one that can be done at any time. You can also apply for a VA home loan however many times you need, so you’re not limited to just one forever. This is a benefit that never expires.
If you’re a Veteran, gather your discharge papers; if you’re a service member, gather crucial information such as your name, Social Security number, date of birth, and service papers.
If you’re a surviving spouse, on the other hand, you will need the Veteran’s discharge papers and to fill out a Request for Determination of Loan Guaranty Eligibility — Unmarried Surviving Spouses (VA Form 26-1817), if you’re receiving DIC benefits. If you’re not receiving DIC, you’ll need the Veteran’s death certificate, a completed application for DIC/Death Pension/Accrued Benefits, and a copy of your marriage license.
After you have gathered the correct papers and information, you can apply online here. Alternatively, you can print and fill out this form and mail it to the address on the form.
After you receive your Certificate of Eligibility (COE) that says you qualify for a VA home loan, it’s up to your lender — because you probably qualified for a VA-backed home loan, meaning you will need to use a private lender.
The lender will most likely be a private bank or mortgage company. They will request VA appraisal of the home, and review your credit and income information. If they accept your application, you can move forward with purchasing or refinancing your home.
VA home loans are one of the most precious benefits a Veteran can use. If you’re a Veteran, know that you won’t have the same opportunity solely through private lenders; getting backed by the VA will give you better terms, including the lack of down payment if you don’t have the means.