What is a VA Loan?
VA Loan Frequently Asked Questions
The VA Loan became known in 1944 through the original Servicemen's Readjustment Act also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families, and the dream of home ownership became a reality for millions of veterans. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and to the growth of the nation's economy.
With more than 25 million veterans and service personnel eligible for VA financing, this loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.
The VA will guarantee a maximum of 25 percent of a home loan amount up to $104,250, which limits the maximum loan amount to $424,100. Generally, the reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed. Being a veteran doesn't make a homebuyer automatically eligible for a home loan, you must meet both service requirements and credit/income requirements to be eligible.
VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.
VA Loan Questions
- FAQs Index
- What is a VA loan?
- Is using my VA loan eligibility a good idea?
- What can I buy with a VA home loan?
- What is the maximum amount I can borrow with a VA home loan?
- What can be done when both husband and wife are eligible?
- I am a veteran who purchased a home with my spouse utilizing my VA eligibility. I am now divorced and my spouse was awarded the home. How do I get my eligibility back?
- I heard the VA has an inventory of foreclosed homes. How can I find out more about this?
- What role does the VA play in helping me get a loan?
- Do I have to take a fixed rate VA loan?
- Should I get a pre-approved loan?
- How do I get proof of eligibility?
- I don't have an honorable discharge, am I automatically disqualified from VA loan eligibility?
- What if I can't find my DD214 form?
- Is it possible to use my VA eligibility more than once?
- What is the one-time exception for renewing VA eligibility?
- Can I get eligibility for another VA loan even though I am still working on the first one?
- Can I use my VA loan to buy a rental property?
- What happens if I file bankruptcy and wish to buy another home at some point?
- How is my VA home loan eligibility determined?
- Can I get a home equity refinance with the VA?
- Am I limited to buying an existing home with a VA loan?
- Are there fees associated with my VA home loan?
- Who is exempt from paying the VA funding fee?
- Can I bring on a co-signer on my VA home loan?
- How does the Veterans Benefits Act change my loan process and entitlements?
- Can the VA help if I think I may be encountering discrimination in my search for a home?
- Can I use a VA loan to buy a reposessed house?
- How can I help myself before applying for a VA home loan?
- What help does the VA offer in the homebuying process?
- Will the VA help if my property is poorly built or defective?
- Can I buy a farm with a VA loan?
- Can I make a home purchase outside of the US?
- What if I die before paying off my VA loan?
- Once I sell my property, am I released from my VA loan obligation?
- What happens if my mortgage is sold to another mortgage company?