VA Loan Facts
The Department of Veteran Affairs offers a home loan program to active and discharged veterans. It allows for low interest rate mortgages with little or no down payment. This program is a loan guaranty service that is available to veterans under specified qualifications
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General Eligibility
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VA loan applicants must be active or honorably discharged service members. If the service member served during wartime, the service member must have completed at least 90 days of active duty. A wartime veteran will be considered if he has served less than 90 days and was honorably discharged due to a connected disability. Peacetime service members must serve at least 181 days of continuous active duty. Like wartime members, servicing less than 181 days will be considered if connected to a resulting disability honorable discharge. Discharges other than honorable require special consideration for approval.
Certificate of Eligibility
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A Certificate of Eligibility is required as part of the VA loan application process. Service members can apply for this certificate by completing the VA Form 26-1880, Request for a Certificate of Eligibility. The request for should be forwarded to the Winston-Salem Eligibility Center for approval. Most approved lenders have the ability to file the certificate request online using the Internet-based application. The use of the online application provides a more rapid approval time. Inquire with your lender to see if it has access to the WEB LGY online application.
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Proof of Military Service
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Proof of military service is required as part of the VA loan application. This proof is also required to obtain a Certificate of Eligibility. Active duty members must provide an original statement of service that has been signed by their commanding officer. The statement must include the service member's name, social security number, date of active duty entry and expected duty duration. Discharged members must show a copy of the issued DD Form 214. Service members that have been discharged after October 1, 1979 must show DD Form 214 Copy 4. The department requests that the service member only send copies of this form as members receive only one copy of DD Form 214. Service members of the Army or Air Force National Guard must issue a copy of the NGB Form 22, Report of Separation and Record of Service or NGB Form 23, Retirement Points Accounting form. Reserve and National Guard service members do not have a standard form for issuance. They must, therefore, submit documentation that reflects the required discharge information.
Loan Entitlements
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The VA loan program does not guarantee loan approval. Lending is determined by the authorized lending institutions that participate in the VA loan program. The program does, however, provide service members with established entitlements. The basic entitlement for service members is $36,000. That is accurate as of 2009. This covers the down payment and closing costs affiliated with the home purchase. These guidelines are structured to guaranty 25 percent of the home purchase. These amounts are increased with purchases in higher cost counties. The amount and percentage can be adjusted each year.
Additional Eligibility
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Unmarried widows of service members who died in active duty are eligible for the VA loan program. They are required to receive eligibility certification from the Winston-Salem Eligibility Center. Children of veterans are not eligible for the program.
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