Veterans Administration loans are among the benefits available to active and veteran members of the military. There are benefits associated with obtaining a VA Guaranteed Home Loan versus loans available to civilians. However, borrowers must meet certain eligibility requirements, including income and credit, in order to qualify for a VA Guaranteed Home Loan.
VA Loan Benefits
Private lenders may offer VA loans to veterans and active military personnel. These loans come with benefits such as no down payment, the possibility of lower closing costs, no mortgage insurance premiums and the right to repay without penalty. According to Homeloans.va.gov, the VA also provides temporary assistance to veterans who are having financial difficulties and fall into loan default.
Loan Limits
Each year the VA determines loan amount limits for individual counties. The limits vary from county to county. For example, according to the VA Loan Guaranty Service, the 2010 limit for Sacramento, California, is $418,750. However, in Los Angeles, the limit is $593,750. The VA will guaranty 25 percent of the loan limit if the loan is above $144,000.
Reuse Rights
Eligibility for VA loan benefits can be restored if the prior VA loan has been paid and the property purchased has been sold. According to the Veterans Administration, loan rights may also be restored once only if the veteran still owns the property but the balance of the loan has been paid. In the event of foreclosure or any other event that causes the government to accrue a loss, the balance owed must be paid before loan rights can be restored.
Military Eligibility
Anyone desiring a VA loan is required to provide proof of military service. Members of the National Guard and Selected Reserves must have six years of documented service. In addition, spouses of deceased veterans may be eligible if the veteran died in active duty or due to a service-related disability. According to Homeloans.va.gov, children of veterans are not eligible for a VA home loan.
Income and Credit Eligibility
VA Guaranteed Home Loans are issued by private financial institutions, and specific credit requirements may vary from lender to lender. Veterans who have previously filed for bankruptcy may still be eligible. If the bankruptcy was filed more than two years prior, or if it was filed more than one year ago but credit has been reestablished, then they may be considered for a VA Guaranteed Home Loan.
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