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VA Loans

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The Veteran Administration’s Loan originated in 1944 through the Servicemen’s Readjustment Act; also know as the GI Bill. It was signed into law by President Franklin D. Roosevelt and was designed to provide Veterans with a federally-guaranteed home loan with no down payment. VA loans are made by private lenders like banks, savings & loans, and mortgage companies to eligible Veterans for homes to live in. The lender is protected against loss if the loan defaults. Depending on the program option, the loan may or may not default.

Wartime/Conflict Veterans
  • Veterans who were NOT Dishonorably Discharged, and served at least 90 days
  • World War II – September 16, 1940 to July 25, 1947
  • Korean Conflict – June 27, 1950 to January 31, 1955
  • Vietnam Era – August 5, 1964 to May 7, 1975
  • Persian Gulf War – Check with the Veterans Administration Office
  • Afghanistan & Iraq – Check with the Veterans Administration Office
  • Veterans Administration website www.va.gov
Peacetime Service
At least 181 days of continuous active duty with no dishonorable discharge. If you were discharged earlier due to a service-related disability you should contact your Regional VA Office for eligibility verification.
  • July 26, 1947 to June 26, 1950
  • February 1, 1955 to August 4, 1964, or May 8, 1975 to September 7, 1980 (Enlisted), or to October 16, 1981 (Officer)
  • Enlisted Veterans whose service began after September 7, 1980, or officers who service began after October 16, 1981, must have completed 24-months of continuous active duty and been honorably discharged
Reserves and National Guard
  • Certain U.S. Citizens who served in the Armed Forces of a government allied with the United States during World War II.
  • Surviving spouse of an eligible Veteran who died resulting from service, and has not remarried.
  • The spouse of an Armed Forces member who served Active Duty, and was listed as a POW or MIA for more than 90-days.
A VA home loan must be used to finance your personal residence within the United States and its territories. You have choices for the type of home you purchase:
  • Existing Single-Family Home
  • Townhouse or Condominium in a VA-Approved Project
  • New Construction Residence
  • Manufactured Home or Lot
  • Home Refinances and Certain Types of Home Improvements
You can apply for a VA Loan with any mortgage lender that participates in the program. In addition to the application requirements from your lender, you will need the following at application time:

The major portion of other up-front expenses is the deposit or binder you make at the time of the purchase offer, the remaining cash down payment you make at closing, or can include:

Inspections – Lenders may require inspections, and you can make your purchase offer contingent based on satisfactory completion of some other inspections such as structural, water quality tests, septic, termite, roof and radon tests. You and the seller can negotiate these inspection fees.

Owner’s Title Insurance – You may want to purchase title insurance in case of unforeseen problems so you’re not left owing a mortgage on property you no longer own. A thorough title search ensures a clear title.

Appraisal Fees – You may want to hire an Appraiser either before you sign a purchase offer, or after reviewing the lender’s appraisal report.

Money to the Seller – You’ll need to pay for items in the house you want that were not negotiated in the purchase offer such as appliances, light fixtures, drapes, lawn furniture, or fuel oil and propane left in tanks.

Moving Expenses – If you are changing jobs, your new employer may pay for your relocation, otherwise you must figure in the moving costs such as truck rentals, professional movers, cash for utility deposits like telephone, cable, electricity, etc.

Escrow Account Funds – In the purchase offer, you can request that the seller set up an Escrow Account to defray any costs for major cleanup, radon mitigation procedures, house painting, appliance repairs, etc. Depending on the purchase offer contract and contingency clauses, you may discover that you have expenses upon moving in.

Example: Your purchase offer contract has a clause making the purchase contingent on a satisfactory structural inspection, and it’s determined that the house needs a new roof. You can negotiate to have the seller arrange for the work to be done but, this will delay the closing date. You may have to agree to a higher price for house, or to pay some of the new roof repair expenses. Or you and the seller may split the cost using estimates from a contractor of your choice, and each of you will put funds into an Escrow Account. Or, the seller may be willing to reduce the sale price of the house, but either way cash will be needed for the new roof.

Time Investment – One often overlooks major up-front costs in buying a home. The time and expenses invested in house-hunting, which can take up to 4-months, plus the time spent searching for the best mortgage for you, the right real estate agent, an attorney, and other related things that take up your valuable time.

Yes, your eligibility is reusable depending on the circumstance. If you have paid-off your prior VA Loan and disposed the property, you can have your eligibility restored again. Also, on a 1-time basis, you may have your eligibility restored if your prior VA Loan has been paid-off, but you still own the property. Either way, the Veteran must send the Veterans Administration a completed VA Form 16-1880 to the VA Eligibility Center. To prevent delays in processing, it’s advisable to include evidence that the prior loan has been fully paid, and if applicable, the property was disposed of. A paid-in-full statement from the former lender or a copy of the HUD-1 settlement statement must be submitted.

  • 100% Financing & No Down Payment Loans
  • No Private Mortgage (PMI)
  • No Penalties for Prepaying the Loan
  • Competitive Interest Rates
  • Qualification is Easier than a Conventional Loan
  • Sellers Pay Some of the Closing Costs
  • Can be combined with additional down payment assistance to reduce closing costs
  • VA Loans made prior to March 1, 1988 can be assumed with no qualifying of the new buyer. If the buyer defaults the property the Veteran homeowner may be liable for the funds.
  • Some sellers are hesitant to work with someone obtaining a VA Loan because it takes longer than a conventional loan to process.
  • Sellers are often asked to pay a portion of closing costs and therefore less likely to negotiate the sales price of the home.

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