I’m a Veteran. How do I get a VA loan?
Posted by Jason Kauffman on March 12, 2017
One of the benefits afforded to the men and women of our armed forces is the ability to obtain a VA home loan. VA home loans are mortgages that are guaranteed by the US Government. Depending on the veteran’s eligibility and property characteristics, a veteran is able to purchase their new home with no down payment.
VA Loan Eligibility
Without getting too technical, every veteran has the same amount of eligibility once they’ve met the service requirements for VA loan eligibility (see below – source: http://www.benefits.va.gov/homeloans/purchaseco_eligibility.asp)
|Status||Qualifying Wartime & Peacetime Periods||Qualifying Active Duty Dates||Minimum Active Duty Service Requirement|
|Veteran||WWII||9/16/1940 – 7/25/1947||90 total days|
|Post-WWII||7/26/1947 – 6/26/1950||181 continuous days|
|Korean War||6/27/1950 – 1/31/1955||90 total days|
|Post-Korean War||2/1/1955 – 8/4/1964||181 continuous days|
|Vietnam War||8/5/1964 – 5/7/1975 *For Veterans who served in the Republic of Vietnam, the beginning date is 2/28/1961||90 total days|
|Post-Vietnam War||5/8/1975 – 9/7/1980 *The ending date for officers is 10/16/1981||181 continuous days|
|24-month rule||9/8/1980 – 8/1/1990 *The beginning date for officers is 10/17/1981||
|Gulf War||8/2/1990 – Present||
|Currently On Active Duty||Any||Any||90 continuous days|
|National Guard & Reserve Member||Gulf War||8/2/1990 – Present||90 days of active service|
*If you do not meet the minimum service requirements, you may still be eligible if you were discharged due to (1) hardship, (2) the convenience of the government, (3) reduction-in-force, (4) certain medical conditions, or (5) a service-connected disability.
So as a veteran, the first step is to determine whether or not you meet the requirements above for obtaining a VA home loan. You can also go one step further and obtain your Certificate of Eligibility (also called COE) directly from the VA here: http://www.benefits.va.gov/HOMELOANS/purchaseco_certificate.asp.
The next step is to reach out to a lender that has experience closing VA home loans, and get prequalified. The prequalification process for a VA loan is not dissimilar from the prequalification process for a non-VA loan, but there are some caveats with VA financing that require an experienced loan originator to ensure a successful loan process.
Getting prequalified involves getting employment, residence, asset, and liability information to your loan originator. This can be done over the phone or online depending on your loan originator’s system. Once all the information is received they can build a file and pull a credit report.
It’s good practice to get the majority of the supporting documentation for the loan process to your lender in advance of finding a property. The supporting documentation needed for a VA home loan can be a bit different than what’s required with traditional financing.
Here is a common list of supporting documentation needed for a VA home loan:
- Most recent 2 years W2s
- Most recent 2 years Federal Tax Returns
- DD214 Form
- Most recent month’s Paystubs or LES (The LES can be critical in the prequalification process because of the itemization of the BAS and BAH – learn more about your LES here: http://www.military.com/spouse/military-benefits/money-management/how-to-read-a-military-les-leave-and-earnings-statement.html)
- Most recent 2 months of bank statements
- Certificate of Eligibility (if you decide to get it in advance)
- Driver’s License
Following receipt of the prequalification form and supporting documentation, the lender will be able to issue estimates for a hypothetical VA home loan and purchase price. Doing this will help you better understand how your purchase price and down payment affect your VA financing.
Go find your new home
The next step after the prequalification process is to get out with a real estate agent and begin identifying candidates for your new home. Once you’re under contract you will have already submitted the bulk of the items needed to process your loan application. This will lead to a smooth loan process and a headache free purchase of your new home.