Understanding VA Loans: Your Path to Homeownership as a Veteran
A VA loan is a specialized mortgage program exclusively available to veterans, active-duty service members, and eligible surviving spouses that offers unparalleled advantages such as lower interest rates and the opportunity to purchase a home without a down payment. However, accessing these enticing benefits comes with its challenges.
Qualifying for a VA loan involves navigating through a series of strict eligibility criteria and meeting comprehensive requirements set forth by the U.S. Department of Veterans Affairs. If you believe you are eligible for a VA loan, our team of attorneys and real estate experts can help you navigate the qualification process, ensuring a successful path toward homeownership.
To be eligible for a VA loan, veterans and service members must meet certain requirements:
Certificate of Eligibility (COE)
You must obtain a COE to verify your eligibility for the VA loan program. You can obtain this yourself through the VA, or with the assistance of a title agency or lender.
Length of Service
For active service members, if you’ve served for at least 90 continuous days (all at once, without a break in service), you meet the minimum active-duty service requirement.
For veterans, National Guard members, and Reserve members, the minimum active-duty service requirements depend on when you served. You can check that here.
VA loans are intended for primary residences, so you must plan to live in the home that you are financing.
Credit and Income
There is no minimum or maximum income or credit requirement for a VA loan. Even with this leniency, your lender will still review your personal income and credit history to determine how much of a monthly payment you can afford.
If you have any questions about your eligibility, you can always call your VA regional loan center at 877-827-3702.
The process of obtaining a VA loan is similar to other mortgage applications, with a few additional steps to verify eligibility.
Agreement of Sale
The Agreement of Sale, or “Purchase Agreement,” is a legally binding contract that stipulates the home purchase terms between the buyer and seller. VA lenders require specific language in this document that goes above and beyond what is typical.
While VA loans offer lower, more stable interest rates than conventional loans, the inspection process tends to be more thorough – VA lenders want to ensure that the property is in good condition and meets specific safety standards before they approve the loan. Certain repairs may need to be made for the loan to be issued, which may involve negotiating the sale price.
VA lenders also require more in-depth title documentation to ensure the property’s title is clear and free from any encumbrances that could threaten their investment or lead to future legal complications. Your title agency will generate title documents that meet their specific requirements after conducting a thorough title search to identify and resolve any potential issues.
Clover Lane Settlement Services is here to assist veterans and service members throughout the entire homebuying journey, including the VA loan application process. If you or someone you know is interested in obtaining a VA loan or wants to learn more about them, contact us today for personalized guidance and support.