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VA Loans

More than 29 million veterans and service personnel are eligible for VA financing. Even though many veterans have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.

  • Before arranging for a new mortgage to finance a home purchase, veterans should consider some of the advantages of VA home loans
  • The most important consideration is that no down payment is required in most cases.
  • Loan maximum may be up to 100 percent of the VA established reasonable value of the property. Due to secondary market requirements, however, loans generally may not exceed $240,000.
  • Flexibility of negotiating interest rates with the lender.
  • No monthly mortgage insurance premium to pay.
  • Limitation on buyer’s closing costs.
  • An appraisal which informs you of the property’s value.
  • Traditional fixed payment (constant principal and interest; increases or decreases may be expected in property taxes and homeowner’s insurance coverage);
  • For most loans for new houses, construction is inspected at appropriate stages to ensure compliance with the approved plans, and a 1-year warranty is required from the builder that the house is built in conformity with the approved plans and specifications. In those cases where the builder provides an acceptable 10-year warranty plan, only a final inspection may be required.
  • An assumable mortgage, subject to VA approval of the assumer’s credit.
  • Right to prepay loan without penalty.
  • VA performs personal loan servicing and offers financial counseling to help veterans avoid losing their homes during temporary financial difficulties.

Who is Eligible for a VA Loan?

Veterans who served on active duty and were discharged under conditions other than dishonorable, during World War II and later periods are eligible for VA loan benefits. World War II (September 16, 1940 to July 25, 1947), Korean conflict (June 27, 1950 to January 31, 1955), and Vietnam era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days service. Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days active service. Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years of continuous active duty or the full period (at least 181 days) for which you were ordered or called to active duty and been discharged under conditions other than dishonorable, or have completed at least 181 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1171 (Early out), or have been determined to have a compensable service-connected disability; or have been discharged with less than 181 days of service for a service-connected disability. Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions, or, in some instances for the convenience of the Government.

If you served on active duty during the Gulf War, you must have completed 2 years of continuous active duty or the full period (at least 90 days) for which you were called or ordered to active duty, and been discharged under conditions other than dishonorable; or completed at least 90 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1173 (Early out), or have been determined to have a compensable service-connected disability, or have been discharged with less than 90 days of service for a service-connected disability. Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions, or, in some instances, for the convenience of the Government.

If you are now on regular active duty (not active duty for training), you are eligible after having served 181 days (90 days during the Gulf War) unless discharged or separated from a previous qualifying period of active duty service.

If you are not otherwise eligible and you have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and were discharged with an honorable discharge; or were placed on the retired list; or were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service; or continue to serve in the Selected Reserves. Individuals who completed less than 6 years may be eligible if discharged for a service-connected disability. Eligibility for Selected Reservists expires 09/30/2009.

You may also be determined eligible if you are an unremarried spouse of a veteran who died while in service or from a service connected disability, or are a spouse of a serviceperson missing in action or a prisoner or war.

Eligibility may also be established for certain United States citizens who served in the armed forces of a government allied with the United States in WWII and individuals with service as members in certain organizations, such as Public Health Service officers, cadets at the United States Military, Air Force, or Coast Guard Academy, midshipmen at the United States Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with WW II service, and others.

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