Less than 10% of eligible service men and women in the United States took advantage of VA home loans in 2018. VA home loans are one of the most efficient and beneficial loan programs for active duty military service members and veterans.

What is a VA home loan?

A VA home loan is a mortgage loan guaranteed by the U.S. Department of Veterans Affairs issued by approved lenders. Because these home loans are backed by the federal government, lenders are able to offer more competitive rates compared to traditional home loans.

VA home loans are not limited to the purchase of an existing home. Borrowers can use the money to build a home, buy a condominium, refinance their current home, buy a manufactured home or lot, purchase and improve an existing home, or complete energy efficiency improvements.

How do I know if I qualify?

Potential VA loan borrowers are not limited to active duty service members. They can also be members of the National Guard, Reservists, cadets at the U.S. Military, Air Force, or Coast Guard Academy, officers at the National Oceanic and Atmospheric Administration, midshipmen at the U.S. Naval Academy, and surviving spouses of veterans who have not remarried.

Military service members must have served a minimum number of months to qualify for a VA loan. Potential VA borrowers cannot have received a dishonorable discharge.

Monetary Requirements

VA loans are for both first-time and repeat homebuyers. Qualifying existing borrowers can even take advantage of additional VA home loans.

Potential homebuyers interested in a VA loan do not need to meet a minimum income threshold or hold a certain dollar amount in their bank accounts. However, potential borrowers must have a stable income to cover monthly expenses and their new mortgage payment. This residual income requirement helps borrowers meet all financial obligations even when faced with an emergency.

VA home loan eligibility is not affected by most previous foreclosures or declarations of bankruptcy. While an above good credit score can ensure a lower rate, there is no extreme credit score requirement for VA home loans.

Ultimately, the VA determines home loan eligibility. Once you earn VA home loan eligibility, you can use your VA home loan anytime, even 20 or 50 years down the road.

Be sure to find a real estate agent experienced with working with VA home loans.