VA Loan

Through service to your country, affording a home is made easier by the benefits of a VA loan. These benefits are available to active-duty military, veterans, and their surviving spouses.

A VA loan provides simple and flexible options, whether you’re buying your first home or buying a home and looking for the best terms. You may qualify for no down payment amount and lower-than-average interest rates, along with a lower minimum credit requirement.

What is a VA Loan?

You have a handful of options when choosing the right loan to buy a home. Loan types often differ based on their qualification requirements and the terms they offer, such as the loan’s length, interest rate, and minimum down payment amount.

A VA loan is backed by the government through the U.S. Department of Veterans Affairs. VA-approved lenders are insured by the government to cover risks if borrowers can’t pay back these loans.

Backed by the VA, lenders are able to offer VA loans with more flexible qualification requirements than conventional and FHA loans, including lower credit scores and competitive interest rates. It also allows for no down payment and no mortgage insurance. These features make VA loans a popular option among first-time homebuyers. They can also be used more than once. 

VA benefits are meant to help servicemembers, veterans, and eligible surviving spouses finance the purchase of a home.

How to Get a VA Loan

To learn whether a VA loan is the best option for purchasing your home, connect with us. To get you started, we’ve outlined the steps and documentation needed to help you understand the process.

The Financing Process

Homebuyers often start by requesting a quote for their interest rate or beginning an application with a lender. By sharing basic information about your potential purchase, we’ll work with you to pull your credit report, get your VA Certificate of Eligibility (CoE), and discuss your finances. We’ll also assess the potential value of the house you’re interested in purchasing.

As we move through the process together we’ll arrange for an appraisal of the house to determine its value and an inspection to ensure it meets the minimum property standards. 

We’ll also discuss the terms you qualify for and your options, as well as request various documentation for the underwriting process to make sure the loan begins on a solid foundation.

We’re with you through each step, leading to closing where we’ll finalize your affordable loan when you’re ready to purchase.

VA Requirements to Meet

These are the common requirements often needed to qualify for a VA purchase loan. If you have questions about these requirements, we’re here to help.

  • A Certificate of Eligibility (CoE), which is used to show you are eligible for VA benefits.
  • Credit score requirements vary. In most cases a credit score of 580 or higher qualifies. This may shift lower or higher based on other factors.
  • Through underwriting evaluation, you’ll need documentation of consistent income with a Debt-to-Income ratio at or below 60%. This ratio shows how much of your monthly income goes to paying debt.
  • Along with income information you need to show proof of residual monthly income remaining after major debts and obligations are paid.
  • That you’re able to pay the VA funding fee, which can be waived in certain circumstances.
  • The house needs to be your primary residence, and it must meet the minimum property standards.

VA Loan FAQs

Financing a home is an important investment. It’s ok to have questions. We’ve compiled answers to the frequently asked ones, but don’t hesitate to ask more.

What is the difference between a VA loan and a conventional or FHA loan?

All three of these loan types offer flexible financing options. VA loans differ in that they’re insured by the U.S. Department of Veterans Affairs, so lenders don’t need you to meet the strict qualification requirements of a conventional loan. With the stricter qualifications of conventional loans also comes benefits for those with higher credit scores.

FHA loans are also backed by the government and provide options for those with lower credit scores, while offering competitive interest rates and down payment options. However VA loans provide additional benefits that make them one of the best financing programs, including no down payment, no mortgage insurance, low interest rates, and low minimum credit requirements.

How do I know if I’m eligible for a VA loan?

Eligibility for VA loans is service-based and proven through a Certificate of Eligibility (CoE) from the U.S. Department of Veterans Affairs. The VA evaluates eligibility based on your service status, your years of service, and your service record.

You may meet eligibility requirements if you are:

A current active-duty military service member,
A military veteran, or
The spouse of a service member, including a surviving spouse

Detailed guidelines are available on the VA’s website. A CoE isn’t required to apply for a VA loan but it will be needed for approval. We can help you apply for your CoE or you can apply for it directly.

What are minimum property standards?

The VA has set property requirements to ensure that each house being financed is a good investment for all involved. 

The minimum property standards assess a home’s safety, security, and soundness to evaluate whether the house is safe, structurally sound, and sanitary.

A home inspection will be required for this assessment, which considers factors such as the property on which the home sits, the home itself, and any other structures built on the property. 

How much is the VA funding fee and are there other closing costs?

The VA funding fee is a one-time cost that varies based on your situation, such as whether this is your first VA loan and the amount of your down payment. The fee typically ranges from 1.4-3.6% of your loan amount and can be paid upfront or rolled into your monthly mortgage payment. It ensures the program is financially sustainable for all eligible veterans.

The VA also allows for exceptions around paying the funding fee. This includes Purple Heart recipients, veterans with service-related disabilities, and surviving spouses of veterans in certain circumstances.

Along with the VA funding fee there are closing costs, which cover expenses such as loan origination fees, an appraisal, title insurance, etc.

The VA also allows that up to 4% of these costs can be covered by the person selling your new house. This may be an option if it helps everyone close the sale of the house.

Can I use VA benefits to buy a house more than once?

As long as you meet the eligibility criteria, you are entitled to VA mortgage benefits. You can use your VA benefits for your first home and continue to use them for each home you purchase in the future, if you continue to qualify. Sometimes this even applies to using one Certificate of Eligibility to qualify for two VA loans at the same time.

Full eligibility is restored after a VA loan is paid off or sold.