VA Mortgage Loans
What is a VA Loan?
A VA loan is a top benefit of military service for eligible veterans, service members, and surviving spouses. It allows you to qualify for a low-cost mortgage when you’re looking to purchase or refinance, even if your credit isn’t perfect.
If you currently serve in the military or are a veteran, you’re potentially eligible for a VA loan. This article will explain what you need to know about these special government-backed loans, including rates, qualification requirements and special benefits for disabled veterans.
A VA loan is a type of government loan, backed by the Department of Veterans Affairs (VA).
The VA offers specific guarantees to private lenders that handle VA loans. Because of these guarantees, lenders will issue loans to candidates with no down payment or less stringent requirements than other loans.
VA Loan Requirements
Do you Qualify?
Not all who have served in the Armed Forces qualify for a VA loan. You must meet at least one of the following criteria to qualify:
- You’ve served 181 days of active service during peacetime.
- You’ve served 90 consecutive days of active service during wartime.
- You’ve served more than 6 years of service with the National Guard or Reserves or 90 days under Title 32 with at least 30 of those days being consecutive.
- You’re the spouse of a service member who lost their life in the line of duty or as the result of a service-connected disability. You generally cannot have remarried, although there are exceptions, as well as other requirements for a spouse getting a VA loan.
Certificate of Eligibility (COE)
A COE is a document that shows your mortgage lender that you’re eligible for a VA home loan. To get a COE, you need to demonstrate proof of service. The proof you need to submit varies based on whether you’re an active-duty military member, a veteran, a surviving spouse, etc.
If you're elibible we'll help you obtain your COE
Documentation Required
VeteransVeterans need to submit DD Form 214. DD Form 214 is a certificate that verifies your military discharge. You can request your DD Form 214 online by using the eVetRecs filing system.
Active-Duty Service MembersYou’ll need a statement of service for VA loan applications signed by your personnel officer, or an adjunct or unit commander if you’re an active-duty service member. The statement of service must include your full legal name, Social Security number and birthdate.
It must document the date you entered the service, information on any breaks or discharges you took from service and the name of the commander providing the information. Ask your superior for a statement of service before you apply for your COE.
Current National Guard Or Reserve MemberCurrent National Guard or Reserve members also need a statement of service. The requirements for your statement are the same as they are for active service members.
Discharged Member Of The National GuardDischarged members of the National Guard need to have NGB Form 22, Report of Separation and Record of Service for each period of National Guard service. You must also have NGB Form 23, Retirement Points Accounting and proof of character of service.
National Guard units belong to individual states, so there is no central record archive. Contact the National Guard Adjutant General’s Office in the state where you served and request your NGB Form 22 and 23 to get your COE.
Discharged Member Of The Selected ReserveYou must have a copy of your annual Retirement Points Statement if you’re a discharged member of the Selected Reserve. You also need proof of honorable service and discharge.
Surviving SpousesSurviving spouses who do not get dependency benefits can get a COE if they have their spouse’s DD Form 214, their marriage license and their spouse’s death certificate. You also need to print and complete VA form 21P-534-ARE, which is available on the VA benefits website.
Surviving spouses who receive dependency benefits need to print and complete VA form 26-1817. You can download the form for free from the VA benefits website.
Once you’ve got your evidence, you have a few options to apply for your COE. You can apply online through the VA’s eBenefits website. You can also mail your documents and a completed VA Form 26-1880.
Additional VA Loan Characteristics
Funding Fee
Most people who get a VA loan are required to pay a funding fee, which covers the cost to taxpayers. The VA funding fee ranges from 2.3 – 3.6% of your loan amount.
The cost of the fee is determined by your type of service, the size of your down payment, whether it’s the first-time you’re getting a VA loan and whether you’re buying or refinancing the property. Surviving spouses, veterans who receive disability and Purple Heart recipients serving in an active-duty capacity are exempted from funding fees.
Don’t worry, though. In most cases, if you don’t have the money up front, the VA funding fee can be rolled into your mortgage.
Types of VA Loans
- VA Purchase
- VA Interest Rate Reduction Refinance (IRRRL)
- VA Cash-Out Refinance