Are you a veteran or an active-duty member of the military? If so, you may qualify for a VA home loan to help you purchase a home. But what exactly are the criteria for obtaining a VA home loan? In this article, we’ll go over everything you need to know about qualifying for a VA home loan.
Introduction
Serving in the military is one of the bravest things that anyone can do. It’s also one of the most selfless acts a person can make, as it often means putting one’s life at risk for the greater good. If you’re a veteran or an active-duty member of the military, you’re eligible for a wide range of benefits, including a VA home loan.
With a VA home loan, you can buy a house without having to put down a large down payment, and you won’t have to pay private mortgage insurance (PMI). These benefits can be a huge help for those who are just starting out in their careers or who have recently been discharged from the military.
But before you can take advantage of these benefits, you’ll need to meet certain criteria. In this article, we’ll go over the requirements for obtaining a VA home loan, so you can determine if you qualify.
VA Home Loan Criteria
1. Eligibility
The first thing you’ll need to do is determine if you’re eligible for a VA home loan. Generally speaking, the following individuals are eligible:
| Who is Eligible for a VA Home Loan? |
|---|
| Active-duty military |
| Veterans |
| Reservists and National Guard members |
| Surviving spouses of veterans who died in service or from a service-connected disability |
If you’re not sure if you’re eligible, you can check with the VA or talk to a lender that specializes in VA loans.
2. Credit Score
While the VA doesn’t have a minimum credit score requirement, most lenders do. To qualify for a VA loan, you’ll typically need a credit score of at least 620. Keep in mind that the better your credit score, the better interest rate you’ll be able to get.
3. Income
To qualify for a VA loan, you’ll need to have a steady income. The VA doesn’t have a specific income requirement, but lenders will often look at your debt-to-income ratio (DTI) to determine if you can afford the loan. Your DTI is the percentage of your monthly income that goes toward paying off debts.
Most lenders prefer a DTI of 41% or lower, although some may accept a higher DTI if you have compensating factors, such as a high credit score or a large down payment.
4. Certificate of Eligibility
To apply for a VA loan, you’ll need a Certificate of Eligibility (COE) from the VA. The COE verifies that you’re eligible for a VA loan, based on your military service. You can apply for a COE online through the VA’s eBenefits portal, or you can ask a lender to help you obtain one.
5. Property Requirements
The property you’re buying with a VA loan must meet certain requirements. For example, it must be your primary residence, and it must meet minimum property standards set by the VA. These standards ensure that the property is safe, sound, and sanitary.
Additionally, the property’s value must not exceed the VA’s loan limits for your area. The VA sets loan limits based on the median home price in your county or metropolitan area.
6. Funding Fee
When you take out a VA loan, you’ll have to pay a funding fee. The funding fee is a one-time fee that helps to offset the cost of the loan program. The fee varies depending on your down payment amount, your military service status, and whether or not you’ve taken out a VA loan before.
The fee can be rolled into the loan, but this will increase your monthly payment.
7. Other Requirements
In addition to the above requirements, there are a few other things you’ll need to keep in mind when applying for a VA loan. For example, you’ll need to have a valid Social Security number, and you’ll need to provide proof of your employment history and income.
Overall, the criteria for obtaining a VA home loan are relatively straightforward. If you meet the eligibility requirements and have a steady income, you should have no problem qualifying for a loan.
FAQs
1. Can I use a VA loan to buy a vacation home or rental property?
No, VA loans are only for primary residences.
2. Can I use a VA loan to buy a mobile home or modular home?
Yes, as long as the home meets the VA’s minimum property requirements.
3. Can I get a VA loan if I’ve had a foreclosure in the past?
It depends on how long ago the foreclosure was and whether or not you’ve reestablished good credit since then. Talk to a lender to see if you qualify.
4. Can I get a VA loan if I have a bankruptcy on my record?
Again, it depends on the circumstances of your bankruptcy and whether or not you’ve reestablished good credit. Talk to a lender to see if you qualify.
5. How much can I borrow with a VA loan?
The amount you can borrow depends on the VA’s loan limits for your area, as well as your income, credit score, and other factors.
6. How long does it take to get approved for a VA loan?
The approval process can take anywhere from a few days to a few weeks, depending on the lender and your circumstances.
7. Can I use a VA loan to refinance my current mortgage?
Yes, you can use a VA loan to refinance an existing mortgage, as long as you meet the eligibility requirements.
8. Can I get a VA loan if I’m self-employed?
Yes, but you’ll need to provide additional documentation to prove your income. Talk to a lender to see what you’ll need to provide.
9. Do I need to have a down payment to get a VA loan?
No, you don’t need a down payment to get a VA loan, although it may be beneficial to put some money down if you can afford it.
10. How long do I have to live in the home I buy with a VA loan?
You must occupy the home as your primary residence within 60 days of closing on the loan.
11. Can I get a VA loan if I’m in the process of divorcing my spouse?
It depends on the specifics of your situation. Talk to a lender to see if you qualify.
12. Can I get a VA loan if I have a co-borrower who is not a veteran?
Yes, you can have a non-veteran co-borrower on a VA loan, although their income and credit history will be taken into consideration.
13. How can I find a lender that specializes in VA loans?
You can search for lenders in your area that offer VA loans, or you can ask the VA for a list of approved lenders.
Conclusion
Buying a home is a major investment, but it’s also one of the most rewarding things you can do. If you’re a veteran or an active-duty member of the military, a VA home loan can help you achieve your dream of homeownership.
By meeting the criteria outlined above, you can qualify for a VA loan and take advantage of its many benefits. If you’re ready to take the next step, talk to a lender that specializes in VA loans and start the application process today.
Do you have any questions about VA home loan criteria? Let us know in the comments below!
Disclaimer
This article is intended as a general guide to the criteria for obtaining a VA home loan. The information provided may not apply to every individual, and it’s important to consult with a lender or the VA to determine your specific eligibility. Additionally, the criteria for VA home loans may change over time, so it’s important to stay informed about any updates or changes that may affect your eligibility.