Want a VA Loan? Don’t Settle for Any Old Lender.
The VA Home Loan Program was introduced at the end of World War II to help the returning servicemembers and their eligible surviving spouses buy a home. The program provides easy access to loans for purchase and refinance. It streamlines the mortgage application process and offers excellent benefits, including no down payment, no monthly mortgage insurance payments, and closing costs can be rolled into the loan or paid using gifted funds.
The VA loan is backed by a guarantee from the federal government, so it’s available through most banks and direct lenders — but not all VA lenders are created equal.
How can you choose the right VA lender? The VA Loan Program has very specific requirements, so it’s smart to choose a loan officer who has experience working with VA loans. With experience comes expertise.
You’ll want a lender …
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Who Understands the requirements for a Certificate of Eligibility (COE). Your lender should know the specific requirements a borrower must meet to qualify, and which discharge paperwork is needed.
- Who is well-versed in the different types of VA loans for both purchase and refinance.These include the VA purchase loan, the cash-out refinance, and the Interest Rate Reduction Refinance (IRRRL), which is a streamlined refinance program that enables military personnel and their families to obtain a lower interest rate and/or shorter term with no appraisal and no income or asset documentation required.
- Who understands the VA loan funding fee. For borrowers who do not meet the qualifications for a fee waiver, there is a one-time funding fee that varies depending on your down payment, the type of veteran you are, and whether or not you’ve taken advantage of a VA mortgage program in the past. Since no down payment is required, your lender should explain the pros and cons of putting money down and how that will impact your up-front costs and long-term monthly payments. The fee does not apply for veterans with service-related disabilities.
- In April of 2023, the VA announced reduced funding fee rates for loans closed on or after April 7 of that year. These reduced funding fee rates apply to loans made to purchase or build a home. They also apply to cash-out refinance loans. See new rates.
- Who can assist you in meeting the minimum credit score. While the VA loan has no credit score requirement, most lenders will require a minimum credit score between 580 and 620. If your credit score is lower, a good lender can show you ways to improve your credit score in six months to a year.
- Who understands the VA Minimum Property Requirements (MPR). The VA loan requires that a home meets certain criteria as part of the appraisal process, and it determines the property’s value. An experienced lender can help educate you and your REALTOR® if he or she is unfamiliar with these requirements.
- Who provides outstanding customer service. Your lender should answer all of your questions, assist you in identifying the necessary documentation, keep you up to date throughout the process, and resolve any issues that may arise.
Frequently Asked VA Loan Questions And Answers
What are VA loans?
VA loans are special mortgages that can help veterans and active military personnel purchase and refinance homes. These loans are guaranteed by the U.S. Department of Veterans Affairs (VA). They are easier to qualify for and often come with better terms than Conventional or FHA loans.
Who qualifies for a VA loan?
VA loans are open to all active-duty members of the military and veterans who have served in any branch of the U.S. armed forces, including the National Guard or Reserves. However, VA loan eligibility varies, with a full breakdown available on va.gov.
- For service members: You meet the minimum active-duty service requirement if you’ve served for at least 90 continuous days (all at once, without a break in service).
- For veterans: The minimum active-duty service requirements depend on when you served.
- For National Guard members: The minimum active-duty service requirements depend on when you served.
- For Reserve members: The minimum active-duty service requirements depend on when you served.
What is the minimum credit score for a VA loan?
The United States Department of Veterans Affairs (VA) does not set a minimum credit score requirement, but they do review the entire loan profile. This means the VA will look at all aspects of a borrower’s financial situation, including the monthly payment amount, to determine if they can afford to repay the loan.
What is the VA Funding Fee?
What are VA loan documentation requirements?
The documents required for a VA loan are similar to those required for a Conventional mortgage but may vary based on the individual lender. They include:
- Driver’s license, passport, or alternative government-issued ID
- A recent pay stub or evidence of self-employed income (if applicable)
- Two years of W-2 statements and tax returns
- Checking, savings, and retirement account statements
- Your Certificate of Eligibility (COE)
- A DD-214, Statement of Service or Points Statement (this will depend on your type of service)
- VA disability awards letter (if applicable)
- Social Security awards letter (if applicable)
- Divorce decree (if applicable)
- Bankruptcy discharge letter (if applicable)
- Bankruptcy history (if applicable)
What are VA loan occupancy requirements?
To fulfill VA occupancy requirements, you must live in your house for at least 12 months. Your lender will also require you to sign mortgage documents indicating your intention to live in the home as your primary residence.
Can you have two VA loans?
Yes, you can have two VA loans at one time for two different primary residences. This is something that is allowed by most lenders as long as they meet certain requirements.
A special thank you to our service members
Whether you are a veteran or active duty, you have the right to access the benefits of the VA Home Loan Program. You selflessly served our country. Now, it’s time for your country to serve you. Embrace Home Loans has been helping military personnel and their families enjoy VA loans for 40 years. Contact us to learn more about the VA Home Loan Program and find out if you qualify.
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This is a one-time fee that varies depending on the amount of your down payment (remember, no down payment is required) and the type of veteran you are. For example, loans that close after April 7, 2023, a first-time borrower in the armed forces putting no money down would pay a fee of 2.15% of the total loan amount. If the same individual were to put 10% or more down, the fee would be reduced to 1.25% of the loan amount. National Guard and reservists pay about a quarter of a percentage point more than those on active duty. For veterans using the program a second time who do not make a down payment, the fee would be 3.3 % of the total amount of loan. The VA loan funding fee is waived for any vets currently receiving disability compensation.