Greetings, readers! Are you a veteran or current military member looking to buy a home? The VA Home Loan program offers fantastic benefits including 0% down payments, competitive interest rates, and no private mortgage insurance requirements. But before you can take advantage of these benefits, you need to determine if you’re eligible. In this article, we’ll walk you through VA Home Loan Eligibility and answer some of the most frequently asked questions about the program.
What is VA Home Loan Eligibility?
VA Home Loan Eligibility refers to the requirements that must be met in order to obtain a VA Home Loan. Veterans, active-duty service members, and certain surviving spouses are eligible to apply for a VA Home Loan. However, there are specific criteria that must be met to qualify.
Who is Eligible for a VA Home Loan?
To be eligible for a VA Home Loan, you must be one of the following:
Category |
Eligibility Requirements |
|---|---|
Veterans |
Must have served at least 90 consecutive days of active duty during wartime or at least 181 consecutive days of active duty during peacetime. |
Active-Duty Service Members |
Must have served at least 90 consecutive days of active duty during wartime or at least 181 consecutive days of active duty during peacetime. |
Reservists and National Guard Members |
Must have served at least 6 years in the Selected Reserve or National Guard. |
Surviving Spouses |
Must be the surviving spouse of a veteran who died in service or as a result of a service-connected disability. |
What Are the Specific Eligibility Requirements?
In addition to meeting one of the categories above, you must also meet the following requirements:
- You must have a valid Certificate of Eligibility (COE) from the VA.
- You must meet the VA’s credit and income requirements.
- The home you’re purchasing must be your primary residence.
- You must have a plan to occupy the home within a reasonable amount of time.
- You must not have been dishonorably discharged from the military.
What Is a Certificate of Eligibility (COE)?
A Certificate of Eligibility (COE) is a document that proves you are eligible for a VA Home Loan. You can apply for a COE online through the VA’s website, or you can submit a paper application by mail. The COE will include information about your eligibility category and the amount of entitlement you have remaining.
What Are Entitlement and Available Entitlement?
Entitlement is the amount of money that the VA guarantees to the lender in case you default on your loan. The VA guarantees up to 25% of the loan amount, up to the loan limit for your county. Available entitlement is the amount of entitlement you have remaining after purchasing a home using a VA Home Loan. You can use your available entitlement to purchase another home in the future.
What Are the Loan Limits for VA Home Loans?
The loan limits for VA Home Loans vary by county and are updated annually. In 2021, the loan limit for most counties is $548,250. However, some high-cost counties have higher loan limits.
Can You Use a VA Home Loan to Refinance?
Yes, you can use a VA Home Loan to refinance an existing mortgage. There are two types of VA Home Loan refinancing options:
- Interest Rate Reduction Refinance Loan (IRRRL) – This option allows you to refinance to a lower interest rate without needing to provide additional documentation or undergo a new appraisal.
- Cash-Out Refinance – This option allows you to take out cash against the equity in your home.
Can You Use a VA Home Loan to Buy a Second Home?
No, you can only use a VA Home Loan to purchase your primary residence.
Can You Use a VA Home Loan to Buy a Mobile Home?
Yes, you can use a VA Home Loan to purchase a manufactured or mobile home that is classified as real property. The home must be permanently affixed to a foundation and must be your primary residence.
Can You Use a VA Home Loan to Buy a Condominium?
Yes, you can use a VA Home Loan to purchase a condominium. However, the condominium must be on the VA’s approved condo list.
Can You Use a VA Home Loan to Buy a Multi-Unit Property?
Yes, you can use a VA Home Loan to purchase a multi-unit property (up to four units). However, you must occupy one of the units as your primary residence.
Can You Use a VA Home Loan to Buy Land?
No, you cannot use a VA Home Loan to purchase land without an accompanying home. However, you can use a VA Home Loan to purchase a home and the land it sits on.
Can You Use a VA Home Loan to Build a Home?
Yes, you can use a VA Home Loan to build a home. However, you must have a construction loan to do so. Once construction is complete, the construction loan will be converted to a VA Home Loan.
Can You Use a VA Home Loan if You Have Bankruptcy or Foreclosure on Your Record?
Yes, you can still be eligible for a VA Home Loan if you have bankruptcy or foreclosure on your record. However, there may be additional requirements you need to meet, such as waiting a certain amount of time after the bankruptcy or foreclosure.
What Are the Benefits of a VA Home Loan?
The benefits of a VA Home Loan include:
- No down payment required
- Competitive interest rates
- No private mortgage insurance required
- No prepayment penalties
What Are the Drawbacks of a VA Home Loan?
The drawbacks of a VA Home Loan include:
- There is a funding fee, which can be rolled into the loan or paid upfront.
- There may be additional requirements you need to meet, such as minimum credit score or debt-to-income ratio.
- The VA Home Loan program may not be available in all areas.
- The appraisal process may take longer than with other types of loans.
Conclusion
Now that you know the ins and outs of VA Home Loan Eligibility, you can determine if this program is right for you. Remember, VA Home Loans offer fantastic benefits, but you must meet specific requirements to be eligible. If you’re ready to take the next step, contact a VA-approved lender to get started.
Thank you for reading, and we wish you the best of luck with your home buying journey!
Disclaimer
The information provided in this article is for informational purposes only and should not be considered legal or financial advice. Please consult with a licensed professional for personalized recommendations based on your specific situation.