VA Loan FAQs

VA Loan FAQs

VA Home Loan FAQ

The veterans who are looking for some help from the Veterans Administration in buying the home they have always wanted will be happy to know that the VA Home Loan program is there for them whenever they need it. As long as you meet the criteria, you can enjoy all of the benefits that the VA Home Loan program has to offer. People always have questions about the VA Home Loan program and the answers can help them to better understand what the program has to offer them.

Does the VA offer foreclosed properties?

One side-effect of the challenges with the national economy has been the availability of foreclosed homes. These become opportunities for home buyers who are looking to buy a quality home at a low price. The VA does engage in the practice of buying and reselling foreclosed properties to qualified veterans. These foreclosed properties were all seized as the result of defaults on previous VA Home Loans. Veterans interested in finding out more on these foreclosed properties can contact the VA for more information.

Does my eligibility disappear if I lose my home in a divorce?

An unfortunate truth in our society is that many marriages tend to end in divorce. If you are a veteran who purchased your marital property through the VA Home Loan program and that property was awarded to your spouse in a divorce settlement, then you lose your loan eligibility. If your spouse is a veteran who uses her eligibility to assume the mortgage, then your eligibility is restored. If your spouse is not a military veteran, then she can refinance the home in her name and restore your eligibility.

Can I use my VA Home Loan eligibility more than once?

Every veteran can use their VA Home Loan eligibility more than once, provided that there is not an outstanding VA Home Loan in their name. If a veteran sells a property and then pays of the VA Home Loan in full, then he would qualify for another home loan. If the veteran sells his property to another veteran and the new buyer assumes the mortgage with his eligibility, then the seller’s eligibility is restored. If the veteran pays off a VA Home Loan but keeps the property, then he can qualify for only one more VA Home Loan.

What forms do I need to get my VA Home Loan after I leave the service?

Veterans who have been out of the service for a while will need to get their Certificate of Eligibility from the VA in order to qualify for the program. To get the Certificate of Eligibility, the veteran will need to file form 26-1880 and the Certificate of Release or Discharge from Active Duty form number DD-214 with the local VA office. Once the veteran has obtained his Certificate of Eligibility, he will need to provide that with his personal financial information to the lender during the application process.

What does a VA Home Loan cover? Can I buy a summer cabin with my VA Home Loan eligibility?

The rules regarding what a VA Home Loan can be used for are very specific. A VA Home Loan can be used to purchase a residential home which is the primary residence of the veteran, an apartment complex (provided that one of the apartments is the primary residence of the veteran), home remodeling of the primary residence, buying a lot that will be used as the location of the primary residence, to refinance the mortgage of a primary residence, and installing environmental equipment such as a furnace, central air conditioning or solar panels. In all cases, the property involved must be the primary residence of the veteran and the veteran’s spouse. The VA Home Loan program does not allow veterans to purchase property for other family members or to purchase secondary residences.

If I want to build my home, can I get a VA Home Loan to cover the costs?

A VA Home Loan is not designed to be used as a new home build line of financing. The VA-Guaranteed Manufactured Home Loan is about as close as the program gets to financing new builds. A veteran can try to use his VA Home Loan Certificate of Eligibility as a promise to a developer that the final home will be financed using a VA Home Loan. But the actual construction process cannot be covered by the VA Home Loan program.

Does my duty as a Reservist qualify me for the program?

Reservists who have six years of duty will qualify for the VA Home Loan program. Reservist duty consists of remaining an active part of his military unit, attending all weekend training assignments and completing the annual two-week training program. If a Reservist was injured in the line of duty prior to completing his six years, then he may still qualify for the VA Home Loan program. Any injured Reservist is encouraged to contact his local VA office for more information.

Is there a ceiling to how much I can borrow?

The VA Home Loan program does not have a maximum amount that can be borrowed. However, most lenders do prefer to limit VA Home Loans to $417,000, as outlined by the federal Veterans Benefits Act.

Are there repayment options with the VA Home Loan program?

As with a standard loan, the VA Home Loan program offers 30-year mortgages with a variety of repayment options. The Growing Equity Mortgage offers the option of making payments that increase gradually over time with the excess being applied to principle. This will allow for a faster repayment of the mortgage than a traditional term. A Gradual Payment Mortgage is one that offers low initial payments for the first six years and then the payments gradually go up to a level that allows pay-off by the 30th year. There is also the fixed interest option that keeps the payments the same for the entire term. Veterans do not need to worry about paying their loan off early as the VA Home Loan program does not assess early pay-off penalties.

Can I get a VA Home Loan from any local lender?

No. The VA Home Loan program is administered through local area lenders, but not every lender offers the program. The best way to find out which lenders do offer the program is to call your local VA office and find out.

Which military personnel is not eligible for the VA Home Loan program?

Reservists and National Guard personnel currently in their initial training are not eligible for the program. Reservists and National Guard personnel must have six years of service after initial training, or have been injured in the line of duty. World War I veterans who did not serve after World War I ended are also not eligible for the VA Home Loan program.

How often can I use my VA Home Loan eligibility?

If you purchase the home you want to retire in and then get stationed overseas, then you are able to have your eligibility restored once, provided that the first home is paid off. You can use your eligibility as often as you like during active duty if your home is sold and the VA Home Loan is completely satisfied before you purchase a new home.

Veterans who are no longer in active duty will need to contact the local VA office to discuss how much of their eligibility still exists.

Why do I want a VA Home Loan?

The simplest answer to that question is that a VA Home Loan streamlines the application process for the veteran and then allows a veteran to purchase a home without a down payment and without the added burden of mortgage insurance.