Since its inception in 1944, the VA loan program has been intended to provide a benefit to veterans for their service to the United States. Similar to FHA loans, VA Loans are not loans that are made by the Department of Veterans Affairs. A VA Loan is a loan that is partially guaranteed by the VA allowing for some very favorable loan features for veterans.
VA Loans are available from lenders who participate in the VA Home Loan program.
Features of VA Loans
VA Loans are available as the following types of loans:
Some of the attractive features of VA Loans include:
Qualifying for VA Loan
According to the VA, more than 27 million veterans are eligible for VA Loans. Qualifying for a VA Loan is relatively straight forward. The eligibility requirements are:
The VA Loan Application Process
The process of applying for a VA Loan is also pretty straight forward. The first step is for the veteran to apply for a Certificate of Eligibility (COE). One may be obtained by completing VA Form 26-1880, Request for a Certificate of Eligibility, and sending it, along with proof of military service, to an eligibility center (see http://www.homeloans.va.gov/contact.htm for eligibility center locations and contact information). Proof of military service may be obtained using Standard Form 180, Request Pertaining to Military Records. Veterans may also ask any lender that they are working with to try and obtain a COE through ACE (Automated Certificate of Eligibility).
The next step is for the veteran to find a home that they wish to purchase and sign a purchase agreement. After that, the lender (usually) will order an appraisal from the VA. The formal mortgage application to the lender is the next step. Most loans are authorized on an automatic basis and are approved and closed upon receipt of the appraised value determination. After that it is time for the veteran to close the loan and move in to their new house.
VA Loan Limits
While there is no loan limit for VA Loans, lenders typically pay up to 4 times a Veteran's entitlement, which is $36,000, or 25% of the Fannie Mae/Freddie Mac loan limits in effect at the time for larger loan amounts. As of 2006, this effectively makes the upper VA Loan limit $417,000. Many lenders may have limitations of their own. VA Loans are typically 15 year or 30 year loans. The maximum VA Loan term is 30 years and 32 days.
Important VA Contact Information
VA Eligibility Center Address and Telephone Numbers
Request for Determination of Eligibility (VA Form 26-1880), along with proof of military service should be sent to:
VA Loan Eligibility Center
PO Box 20729
Winston-Salem, NC 27120
For overnight delivery:
VA Loan Eligibility Center
251 N. Main Street
Winston-Salem, NC 27155
Toll free phone number: 1-888-244-6711