VA Loans Help Military Personnel Purchase A Home

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Like other VA services, a VA loan can help military personnel afford a home.

Military Personnel Can Purchase A Home Through A VA Loan

Countless men and women in uniform go into harm's way and sacrifice their lives fighting to keep our nation's freedoms and liberties safe from terrorism and other threats. Owning a home should not become another battle for these current and former military heroes to fight. Veteran's Administration (VA) loans are a useful tool to help more than 25 million military veterans purchase a home.

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Qualifying For A VA Loan

U.S. military personnel on active duty in the armed forces, or honorably discharged from active service, can qualify for a VA home loan. This includes all branches of the armed forces – Army, Navy, Air Force, Marines, Coast Guard, National Guard, and Reserves. Loans are typically available in 15-, 25-, and 30-year terms.

Military veterans who enlisted, or were commissioned as officers, and began their military service before October 1981 are eligible for a VA loan if they served at least 90 continuous days during wartime, or 181 days during peacetime. Veterans serving after October 1981 are eligible if they served for two years, or no less than 90 days in wartime, and 181 days in peacetime. Members of the National Guard or the Reserves must complete a minimum of six years of service to be eligible for such a loan.

Benefits Of A VA Loan

VA loans offer many advantages not present in a traditional home loan. A veteran can buy a house that costs up to $417,000 in value without making a down payment, for example. Conventional home loans generally require a down payment ranging from 5 to 20 percent for loans with a low interest rate. Veterans don't need any mortgage insurance, because the loan amount and interest rate on a VA loan are not based on a credit score.

In addition, a veteran can possess a higher debt ratio than bankers would accept on a standard loan. Building a home under this type of loan also opens the door to financing home improvements down the road. Veterans are allowed to finance up to $6,000 to cover the cost of making energy improvements. If they choose to sell or refinance the home later, they're not required to pay a penalty.

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Applying for a VA Loan

If you're a veteran, find a lender that participates in the VA home loan program. You can do the research online, or visit a regional VA loan center to obtain a certificate of eligibility. Once you're deemed to be eligible, you can apply for the loan. The lender will review all your documentation, including income, credit, and assets, before they make the final determination if they'll grant the loan.

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