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VA loans are military loans that are guaranteed by the
United States Department of Veteran Affairs. Veterans and
service persons are able to attain a home loan through the
VA loan system with favorable terms, interest rates and
usually without a down payment.
Qualifying for a VA loan is much easier than for a conventional
loan. Lenders usually limit the amount of the VA loan to
around $200,000 though. The United States Department of
Veteran Affairs does not make loans directly to military
personnel. Rather, the VA guarantees the loans made by other
qualified lenders. The VA determines the applicant's eligibility
and qualifies the service person for the loan. Once the
service person has been qualified, the VA issues a certificate
of eligibility to be used when applying for the loan with
a third party vendor.
Military applicants can apply for a VA loan with any mortgage
lender that participates in the VA home loan program. Applicants
can request a Certificate of Eligibility by filling out
form 26-1880
and sending the form to a VA
Eligibility Center along with proof of military service.
Military personnel can also ask their lenders about obtaining
a Certificate of Eligibility for them. Many lenders have
access to the Automated Certificate of Eligibility (ACE)
system and can log on to the Internet and issue a Certificate
of Eligibility within a couple of minutes.
The VA has several guidelines that constitute proof of
military service. According to the VA, in order to provide
proof, military personnel are advised, "If you are
still serving on regular active duty, you must include an
original statement of service signed by, or by direction
of, the adjutant, personnel officer, or commander of your
unit or higher headquarters which identifies you and your
social security number, and provides your date of entry
on your current active duty period and the duration of any
time lost.
"If you were discharged from regular active duty after
January 1, 1950, a copy of DD Form 214, Certificate of Release
or Discharge from Active Duty should be included with your
VA Form 26-1880. If you were discharged after October 1,
1979, DD Form 214 copy 4 should be included. A PHOTOCOPY
OF DD214 WILL SUFFICE … DO NOT SUBMIT AN ORIGINAL DOCUMENT."
In addition, the surviving spouse of a deceased military
veteran is also eligible for a VA loan as long as the spouse
is unmarried at the time of the loan. addition, a surviving
spouse who obtained a VA home loan with the veteran prior
to his or her death (regardless of the cause of death),
may obtain a VA guaranteed interest rate reduction refinance
loan.
VA loans may not be suitable for everyone who is serving
or has served in the military. But, for the majority of
cases a VA loans can save significant amounts of money in
interest rates, loan terms and down payments. Of course,
there are a few other government
home loans that one needs to be aware of including HUD
FHA loans, RHS and HFA.
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