The Department of Veteran Affairs' home loan program, frequently referred to as VA loans, was instituted at the end of World War II as a way to help returning soldiers readjust to post-war life. VA loans offered members of the armed forces the opportunity to purchase a home or property.
The Facts
In order to qualify for a VA loan, you must be a retired or active member of the military or a qualified member of the reserves or National Guard. The requirements for length of time served depend on whether you were in the armed forces in wartime or peacetime and what conflict you served during. Your eligibility for a VA loan also depends on being honorably discharged from your duties. If you are the spouse of someone who died during or because of service or of someone who is missing in action or a prisoner of war and you have not remarried, you may also be eligible for a VA loan.
Identification
To show a lender you are eligible for a VA loan, you must show a Certificate of Eligibility. In order to request a Certificate of Eligibility, you have to submit a Request for a Certificate of Eligibility For Home Loan Benefits, or Form 26-1880, and provide proof of service.
Function
VA loans allow veterans and active service personnel to purchase a home without a down payment as long as their credit history and income qualify them for the loan. The home buyer is only responsible for the earnest money deposit and for paying closing costs if they are not paid by the seller.
Considerations
Certain other types of people may be eligible for a VA loan. If you served in the armed forces of a country that was allied with the U.S. in World War II and you are now a United States citizen, check with your local department of Veterans Affairs to find out if you might be eligible.
Misconceptions
Even though they're called VA loans, in most cases the VA home-buying program provides down payment assistance, and service personnel get their loans through traditional channels, meaning they have to meet the lender's requirements to qualify for a loan even if they have qualified for the VA program.
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