Are you a veteran or active duty service member looking for a loan to buy a home? If so, you may be eligible for a VA Home Loan.

Loans for Veterans and Active Duty Service Members

Buying a home is a big decision. Maybe it’s your first home, or maybe you’re downsizing. Regardless, the process can be daunting — especially if you’re a veteran or active duty member of the military. As thanks for your service, the government has a number of programs in place to help make home ownership more accessible and affordable for those who have served. One such program is the VA Home Loan.

What is a VA Home Loan?

A VA home loan is a mortgage loan that’s backed by the Department of Veterans Affairs (VA). The VA backs these loans, which are made by private lenders (banks, savings and loans, or mortgage companies) to veterans, active military personnel, and military spouses who qualify.

The United States government created the VA Loan in 1944 to help returning service members purchase homes without needing a down payment or excellent credit. This historic loan program has helped more than 24 million veterans, active duty military members, and their families purchase or refinance a home.

VA Home Loan Types

There are a number of different types of VA home loans (a VA direct loan and 3 VA-backed loans) available to eligible borrowers:

Native American Direct Loan (NADL) Program

First, let’s look at the NADL program. NADL loans are available to eligible Native American veterans who hope to purchase, construct, or improve a home on Federal Trust land. These loans are provided through the VA, but they’re originated, processed, and closed by private lenders.

VA-Backed Purchase Loan

A VA-backed purchase loan is a loan offered by a financial institution or mortgage company. With your Certificate of Eligibility, or COE, in hand, along with your approved credit and income, the lender verifies your eligibility for the VA mortgage.

There is no down payment required for a VA-backed purchase loan.  Additionally, there are better interest rates than those of a conventional loan. Those who are on a VA-backed purchase loan do not need to pay monthly private mortgage insurance (PMI) premiums, as is the case with a conventional loan when the borrower puts down less than 20%.

Cash-Out Refinance Loan

A cash-out refinance loan allows qualified borrowers to take advantage of lower interest rates, and also receive cash for equity in their home. Borrowers can use the cash to make home improvements, pay for college tuition, consolidate debt, or for any other purpose. You can apply with us to see if you meet the requirements for a cash-out refinance loan.

The Interest Rate Reduction Refinance Loan (IRRRL)

The Interest Rate Reduction Refinance Loan (IRRRL) allows qualified applicants to refinance their existing mortgage into a new VA loan with a lower interest rate. One of the biggest advantages of an IRRRL is that an applicant does not need to have their home appraised to qualify, and there is no income or employment verification required. To be eligible for an IRRRL, you must currently have a VA loan that has been open for at least 210 days, and you must also be current on your mortgage payments.

For homeowners whose first mortgage had a variable interest rate, an IRRRL may be able to provide better stability by locking in a lower, fixed interest rate. An IRRRL has specific requirements, such as never having been delinquent (30 days past due) on your mortgage on any payment in the last 12 months. This loan is specifically for veterans and their families who want to refinance their homes to take advantage of a lower interest rate.

The Potential Advantages of Obtaining a VA Home Loan

There are many potential advantages to obtaining a VA home loan, including the following:

• No down payment required
• No private mortgage insurance (PMI) required
• Competitive interest rates
• Ability to finance up to 100% of the purchase price
• There is no prepayment penalty
• You can use your VA eligibility to purchase a multi-unit property

VA Home Loan Eligibility Requirements

To be eligible for a VA loan, you must meet the following criteria:

• Serve or have served in the U.S. Armed Forces, including the National Guard and Reserves
• Obtain a Certificate of Eligibility (COE) from the VA
• Meet the service requirements outlined by the VA (Served 90 consecutive days of active service during wartime, 181 days during peacetime, or 6 years in the National Guard or Reserves)
• Or, be an unmarried surviving spouse of a veteran who died in service or as a result of a service-connected disability

Have questions?

Just give us a call. When you work with us, you will get a partner that is committed to helping you find the right  home loan for your unique situation.