VA loans represent one of the most valuable benefits available to veterans, active-duty service members, and eligible surviving spouses. This detailed exploration covers everything you need to know about VA loans, from eligibility requirements to the unique advantages they offer.
Service Eligibility Requirements
Length of Service
Minimum service requirements vary by era:
- 90 consecutive days during wartime
- 181 days during peacetime
- 6 years for National Guard/Reserves
- Other specific requirements for different service periods
Certificate of Eligibility (COE)
Documentation needed to prove eligibility:
- DD Form 214 for veterans
- Statement of service for active duty
- Points statement for Reserve/Guard members
- Marriage and death certificates for surviving spouses
Financial Requirements
Credit Score
VA loans offer flexible credit requirements:
- No official VA minimum credit score
- Most lenders require 580-620
- Focus on overall financial picture
- Recent credit history heavily weighted
Income and Employment
Stable income is essential:
- Two years of employment history preferred
- Current employment verification required
- Self-employed income documentation
- Residual income requirements by region
Unique VA Loan Benefits
No Down Payment Requirement
One of the most significant advantages:
- 100% financing available
- No monthly mortgage insurance
- Seller can pay closing costs
- Gift funds allowed for closing costs
VA Funding Fee
Understanding this one-time fee:
- Varies by type of service
- Based on down payment amount
- Can be financed into loan
- Waived for disabled veterans
Property Requirements
VA loans have specific property criteria:
- Must be primary residence
- VA minimum property requirements
- VA appraisal required
- Eligible property types defined
Loan Types and Options
Purchase Loans
Standard VA home purchase:
- Competitive interest rates
- No maximum loan amount
- Subject to county loan limits
- Multiple properties possible with remaining entitlement
Interest Rate Reduction Refinance Loan (IRRRL)
Streamlined refinance option:
- No appraisal required
- Minimal documentation needed
- Must result in lower payment
- Quick closing process