Veteran’s Administration Home Loan

Buying a home can be fulfilling and overwhelming. Fortunately, for some (active military, veterans, and surviving spouses), the Veteran’s Administration (VA) helps ease the anxiety by providing a home loan guarantee benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. I know of numerous people who have used this benefit. This post will give you a brief overview of the VA home buying process.

Eligibility

There are a few things that prospective homebuyers need to be eligible for a VA home loan:

  • decent credit
  • income to meet monthly payments
  • valid Certificate of Eligibility (COE)
    • there is a list of requirements that can be found here

As a note, the COE can be completed online, through your lender, or mail. Online is the option that I would choose, since it decreases processing time.

Finding a home

After the COE is returned and states that you are eligible, it time to find a home (if you have not done so) and sign a purchase agreement.

Loan

After the purchase agreement is signed, it is then time for you to apply for the VA home loan. It seems to me as if this should occur before signing a purchase agreement. Unfortunately, this is the process. It would benefit you to include a clause that allows you to break the contract should you not be able to get the VA loan. Incomplete applications slow processing times, please do a thorough review of the application before submitting.

Note: VA will cover up to $400,000 in loans. In some instances, on multiple properties.

Closing

At this point, you will have figured out that a VA home loan is slightly different than a conventional home loan. Closing on the VA loan has one significant difference than a conventional closing. Instead of having a down payment (conventional), the VA loan has a funding fee. The funding fee is a percentage of the loan amount.

Final Word

The VA home loan is a benefit that active military, veterans, and surviving spouses should not overlook.

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