Eligibility For A VA Loan: What Do I Need To Comply?

What is VA Loan?

There are numerous home loans out there with every one of them targeted to varied demographics. The Veterans Affairs Loan, for example, is a loan that does not demand a down payment. That said, this loan is available only to—as the name implies—Veterans; with the exception of spouses.

Below is the list of qualifications:

  • They must have served 90 successive days or active service over wartime.
  • They must have delivered 181 days of operating service over peacetime.
  • They must have more than 6 years of rendered service in the National Guard or Reserves.
  • They are a spouse of a military personnel who has died over war or has died as an outcome of a service-caused disability.

Va home loan

VA loans are government insured, making it easier to attain. The U.S. Department of Veterans Affairs, however, does not let out cash themselves, nor do they sign and deliver checks. They simply ensure mortgage VA-approved lenders issue. This arrangement exists to help lessen the risk lenders face should a borrower flake for whatever cause. To corroborate, this loan program was started in 1944 and was designed to help our brothers and sisters in the military to purchase and acquire homes without the need to meet a credit score requirement.

As of today, the USDVA has guaranteed millions of VA mortgages and has secured homes for millions of military families. Because of the inconsistent steadiness of the economics involved in real estate, home loan applications have only been stricter with requirements being more difficult to attain and standards challenging to meet. As an effect, not so many applicants are granted loans. The VA home loan program has been a military favorite to qualifying parties because of the convenience it carries with it.

The loan limits under this program vary depending on which county one belongs to, although many counties’ loan limits allow veterans to purchase homes priced at more than $400,000 without obliging a debtor to fork out a down payment. Contrastingly, in counties considered to be expensive or “high cost,” the VA home loan limit can far exceed the mentioned digits and may already demand a deposit when necessary.  Moving forward, one may look at the 2017 VA loan limits for specific numbers and county concerns.

Furthermore, does this imply that veterans have nothing to pay for anymore, should they meet the qualifications of this loan type?

That would be too good to be true. The answer is a resounding no, although the fees in this particular loan type can be insanely distant from the digits crunched in conventional loans. Veteran borrowers will have to keep up with a Veterans Affairs funding fee. Just like mortgage payments, this fee will be collected every month depending on one’s arrangement.

How much a borrower will have to fork out will depend on three things:

  • What the determining qualifier is (see the list of qualifications mentioned earlier).
  • If a necessary down payment had to be made.
  • If it is the first time a Veteran is applying for a VA home loan.

If for whatever reason a military member does not qualify for this loan type, an FHA mortgage loan is a worthy substitute. Just like VA home loans, the FHA is also insured by the federal government. That said, the standards the Federal Housing Administration requires are less stringent, and are therefore easier to comply as opposed to conventional loans. Also very similar to VA loans, a borrower will have to pay for mortgage insurance up until the entire loan has been paid for.  Again, this is put in place to help keep safe lenders should borrowers default. Because these loans are a lot less challenging to obtain, more and more people with modest to low credit scores qualify, exposing lenders to greater financial risk.

According to FHA.com, the paperwork needed to comply for an FHA mortgage loan are the following:

  • Social Security numbers
  • Names and location of your employers (past two years)
  • Gross monthly salary at your current job(s)
  • Pertinent information for all checking and savings accounts
  • Pertinent information for all open loans
  • Complete information for other real estates you own
  • Approximate value of all personal property
  • Certificate of Eligibility and DD-214 (for veterans only)
  • Current check stubs and your W-2 forms (past two years)
  • Personal tax returns (past two years), current income statement and business balance sheet for self-employed individuals

For more VA eligibility queries, click the link!


By: Karissa