Putting their lives on hold to serve their country is a feat that is greatly appreciated and entitles veterans to several exclusive benefits including special home loan programs through the United States Department of Veterans' Affairs.
Unfortunately, many veterans are not aware of, do not fully understand the home loan program available to them, or are not sure where to direct their questions or who to seek answers from. Through writing this article, I hope to contribute to clearing up this confusion and to provide information to those who could greatly benefit from this loan program.
The first step in this process is to define eligibility. Who, specifically, is eligible for this program?
Military veterans and those currently serving in the military on active duty assignments in the Air Force, Army, Coast Guard, Marines, or Navy, who were honorably discharged after either serving 90 days or more during wartime or 181 continuous days or more during peacetime are eligible for the program as are unmarried surviving spouses of veterans who died while serving on active duty or as a result of a military service related disability. The children of veterans are not eligible for this program.
Now that I've addressed eligibility, I'd now like to share some basic facts about VA home loans with you to help you to better understand the process before you officially dive into it.
- Veterans do not have to qualify by income or credit.
- Veterans do not have to be a first-time home buyer, and may reuse their home loan benefit.
- VA home loans are generally limited to $417,000 with no down payment, but with a down payment, the limit increases.
- The Department of Veterans Affairs does not approve loans; this is done by the specific lenders.
- The lender sets the interest rates, discount points, and the closing process for loans, not the Dept. of Veterans Affairs.
Ok, now that you know you are eligible for a home loan from the Department of Veterans Affairs and are aware of some of the basic facts regarding the program, what is the step by step process to obtain a loan to fulfill your dream of owning your own home?
1) Apply for a VA Certificate of Eligibility by filling out VA Form 26-1880, a request for such a certificate. You can do this at any Department of Veterans Affairs Office or access a pdf form at the following web address, type in your information, print it out, and mail it to the address specified: http://www.vba.va.gov/pubs/forms/vba-26-1880-ARE.pdf
2) Get pre-qualified through a lender for a VA home loan to see how much you are eligible for.
3) Select a home or homes you are interested in. It is helpful to obtain the services of a realtor. Make sure any purchase or sales agreement that you enter into has a VA option clause that allows you to get out of the contract without penalty if for some reason; you're unable to secure a VA home loan.
4) Contact a lender to officially apply for a loan, either from the lender you pre-qualified with, or through the assistance of your realtor.
5) Next, the lender processes credit and income information, using VA approved automated underwriting systems.
6) A VA appraisal is ordered by the lender. This process involves a licensed appraiser who does not work for but is chosen by the VA estimating the market value of the home as of the date of the appraisal, comparing it to similar homes that were recently sold in that area.
7) After receiving all documentation on credit, income, and assets and the appraisal report, the lender underwrites the loan, and decides if the veteran qualifies or not.
8) The loan closing process, or transfer of ownership, occurs. The title company, attorney or lender representative coordinates the date and time of the process.
Remember that representatives from the Dept. of Veterans Affairs are always willing to answer any questions you may have throughout this process. All you need to do is stop in a local office or call 1-800-827-1000 and a representative will be willing to help you and address your concerns. You may also consult the U.S. Dept. of Veterans Affairs website for even more details concerning the home loan process- http://www.va.gov/
Sources Cited:
United States Department of Veterans Affairs Website- http://www.va.gov/
http://www.valoans.com