One of the main benefits of a VA loan, which is a loan that is guaranteed by the Department of Veteran Affairs, is that there is no down payment required. VA loans are used for buying a home, although they can also be used to replace existing loans and for home improvement. For a purchased home, the home must be the intended primary residence of the loan applicant. The amount of the loan that the VA will guarantee is usually 100 percent of the reasonably determined value of the property, according to the Department of Veteran Affairs, up to $417,000 in the continental United States. Qualifying for a VA loan can be accomplished in a few easy steps.
Step 1
Obtain VA Form 26-1880, which is titled "Request for a Certificate of Eligibility (COE)." The form can be obtained online or by requesting one from a regional VA office. The certificate of eligibility is generally granted for veterans who have served on active duty and have a discharge that is not a dishonorable discharge. These veterans must have served 60 days during wartime or 181 continuous days during peacetime. National Guard members and other reservists have 6-year service requirements.
Step 2
Make a copy of the proof of service. Generally this is a Department of Defense Form DD-214.
Step 3
Complete the Certificate of Eligibility (COE) and mail it with the copy of the proof of service to an eligibility center. Addresses for eligibility offices are listed on the back of VA Form 26-1880.
Step 4
Decide on the home that is intended for purchase and contact a lender. The lender usually orders a VA appraisal, which is a requirement for a VA loan.
Step 5
Apply to the mortgage lender for the loan. This process involves supplying financial information such as income, debts and credit history.
Step 6
Wait to obtain the certificate of eligibility. Once you do and the appraisal is completed and credit is approved, the loan can go through.
Tips and Warnings
- Collect financial information such as credit card information and copies of tax returns before visiting a lending institution.
- No down payment will result in higher monthly payments and more interest paid over the life of the loan.
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