Frequently Asked Questions

Question: What is a VA loan?

Answer: The VA loan began 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.

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.

Question: What are the advantages of a VA guaranteed loan?

Answer: If you are looking to purchase a home with no money down, you're in luck if you qualify. VA mortgage loans can be guaranteed with no money down in most cases up to $417 thousand dollars. An added bonus? No private mortgage insurance requirement with a VA guaranteed loan. The VA even offers help for those looking to refinance.
Don't investigate these benefits without asking for information about the interest rate reduction loan, part of something called the Streamline Refinancing Program, which allows veterans to refinance at little or no expense to them. VALoans.com can give you all the details you'll need to take full advantage of your VA home loan benefits.

Question: Is using my VA loan eligibility a good idea?

Answer: The more you know about our home loan program, the more you will realize how little "red tape" there really is in getting a VA loan. These loans are often made without any downpayment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans.

Aside from the veteran's certificate of eligibility and the VA-assigned appraisal, the application process is not much different than any other type of mortgage loan. And if the lender is approved for automatic processing, as more and more lenders are now, a buyer's loan can be processed and closed by the lender without waiting for VA's approval of the credit application.

Question: What can I buy with a VA home loan?

Answer: The VA loan can be used to buy a home (including townhouse or condominium unit in a VA-approved project), to build a home, to simultaneously purchase and improve a home, to improve a home by installing energy-related features, or to buy a manufactured home and/or lot. On manufactured homes, there must be land included with the home and the home must be at least 24 feet wide. The manufactured home must have an identifiable tag.

Question: What can be done when both husband and wife are eligible?

Answer: Spouses who are both eligible for VA loan benefits may acquire property jointly, but the amount of guarantee on the loan may no exceed the lesser of 40 percent of the loan amount or $36,000 ($104,250 for certain loans over $144,000).

Question: What role does the VA play in helping me get a loan?

Answer: Some first-time homebuyers are misinformed as to the workings of a VA Loan. The Veterans Administration does not normally act as a lending agent. Instead, the VA is in the business of guaranteeing the loans of veteran. In most cases, the VA offers a guaranty to those who meet the requirements, the first of which include a good credit rating. If you are considering any kind of home loan, it's best to consult a credit counselor and a financial planner to find out what credit rating you already have and what you can do to improve your credit rating before applying for the guaranty.

It's important to know that a VA home loan guaranty is available only if the veteran has the income to handle house payments. A VA loan guaranty is not an automatic benefit. Your financial planner or credit counselor can go a long way towards helping you prepare your personal finances before filling out that home buyer's paperwork.

Question: Who is exempt from paying the VA funding fee?

Answer: While there is a funding fee for a VA home loan, some people are exempt from paying. If you are a veteran getting disability compensation for service-related medical issues, or are entitled to get compensation if you aren't drawing retirement pay, you are exempt from the VA funding fee for your VA home loan.

Also, surviving spouses of those who died in the service, or from service related disabilities are also exempt. It doesn't matter in this case whether the spouse has any of their own entitlements. Remember that the VA has the last word on who is exempt, and some issues may be dealt with on a case-by-case basis. If you have any doubts, ask your local VA rep to review your service records (or your spouse's records) and get a determination from the VA.

Question: Are there fees associated with my VA home loan?

Answer: The VA funding fee is required by law. A first-time buyer will pay a little over two percent for a 'no money down' loan, and a second time buyer's fee is just above three percent. The reason for the fee includes the idea that the veteran is reducing taxpayer burden by contributing to the cost of his VA mortgage.

The higher fee for second-time borrowers presumes that there is equity in the home, or the borrower has had plenty of time to save in order to pay for the extra percentage. There is also a fee for VA refinance loans, and they fall within the same general price guidelines; just above two percent for first-timers and just above three percent for those who borrow again.

Question: Is it possible to use my VA eligibility more than once?

Answer: Check with your lender about interest-rate reduction refinancing on your existing VA loan. This is a great advantage and there's no need to re-establish VA loan eligibility. Instead, ask your lender to use the VA's "email confirmation procedure". You may also re-use your VA loan eligibility for another VA loan.

The requirement here includes having completed payments on the previous note, and you must no longer own the property. When applying for re-eligibility, include copies of the paperwork that proves your old VA loan has been paid off-a "paid-in-full" letter from your bank, or a copy of the "HUD-1 settlement statement."

Question: What if I can't find my DD-214 form?

Answer: Those who have been discharged, separated or retired should keep multiple copies of the DD214--your discharge paperwork. It's the most important military document in your records. This is proof of your military status, whether you are retired, separated, discharged. It also displays the nature of your discharge, and what your status is with the National Guard or a Reserve Unit.

The lack of a DD-214 form can bring some of your VA processes to a halt, but fortunately you can get a replacement copy by writing to the National Personnel Records Center. Enclose a completed form SF-180 along with a letter stating the reason for your request, you name, rank, social security number. If you are a recently discharged military member who separated or retired at an overseas location, remember that your DD-214 form may be delayed overseas for up to a year before it becomes part of the National Record Center archives. If this is the case, you contact the orderly room, First Sergeant or Sergeant Major in charge of where you separated or retired and request a copy directly from your final base. Click here to get DD Form 214.

Question: Can I bring on a co-signer on my VA home loan?

Answer: It's true that the legally married spouse of a military member or veteran can co-sign a VA loan. There is no penalty for doing so; the veteran loan is still fully guaranteed by the VA. Two unmarried military members are also able to co-sign on a VA loan with the same results. When a military member or veteran wants to bring an unrelated, non-military cosigner, the VA allows this with one major exception. The VA guarantee is limited to the amount of the veteran's interest in the property. Some companies won't allow these types of "mixed" loans, so you may have a bit of shopping around to do before finding a lender willing to work with you. If you find yourself in this position, give yourself plenty of extra time to hunt for the right lender.