The VA Home Loan Guarantee program is very popular with veterans. It can help you get better interest rates and buy a home, even if you cannot afford a down payment. The program can also be used to guarantee a loan to build a home, buy a condo, buy a lot, make repairs or home improvements, refinance a loan, or install energy-efficient home improvements.
The VA guarantees the home loans but does not issue them. You will have to get your loan from a private mortgage lender.
Eligibility for VA Home Loans
Your eligibility for a home loan guaranteed by the VA depends on when you served, the length of your service, and whether you were discharged under other than dishonorable conditions. (However, the length of service requirement does not apply if you were discharged for a service-connected disability.)
You are also required to have a good credit rating, adequate income, a Certificate of Eligibility (COE), and agree to live in the home. If you have an honorable discharge, this will serve as a “Certificate of Eligibility” for a VA home loan guarantee. If you don’t have a document of honorable discharge, you will have to apply to the VA for a “Certificate of Eligibility” in order to qualify for the program.
The length of service depends on the time period you were in the service.
World War II, the Korean War, or the Vietnam War
You will generally be eligible for a home loan if you served at least 90 days during these wars, with one of those days being during wartime and if you were discharged under conditions other than dishonorable.
Peacetime Era After Worldwide War II Until 1980
You must have been on active duty for at least 181 days and been discharged under conditions other than dishonorable.
Peacetime Era From 1980 to 1990
If you enlisted in the service after September 7, 1980, your length of service requirement is two years, or the full period for which you were called to active duty (as long as it's at least 181 days).
Persian Gulf War
You must have completed your full call to duty or have served for two years. However, if your full period of service was less than 90 days, you will be ineligible even if you completed your term of service.
National Guard and Reserves
If you served at least six years and one of the following applies, you will be eligible.
- You got an honorable discharge.
- You were placed on the retired list.
- You were transferred out of the Selected Reserve under honorable conditions, or
- You continue to serve in the Selected Reserve.
If you served less than six years due to a medical discharge for a service-connected disability, you are still eligible.For more details on eligibility, VA's section on home loans.
How to Apply
You can apply online at VA's ebenefits portal or directly with a lender.
You can also apply using VA Form 26-1880, Request for Certificate of Eligibility. If you’re applying by mail, submit your application to:
Atlanta Regional Loan Center, Attn: COE (262), P.O. Box 100034 Decatur, GA 30031.
You’ll need a copy of your DD Form 214 Certificate of Release or Discharge from Active Duty or other documentation of your discharge. You’ll also need to get a statement of service from your military branch.
For further details on application requirements, see the VA website.
How Much Will the Loan Be For?
Typically your minimum loan amount will be $36,000, but Lenders will usually loan you as much as four times as that amount as long as you have good credit. You can find more information about loan limits, as well as examples of how loans are calculated, on the VA website.
Do I Have to Pay a Loan Fee or Closing Costs?
Veterans are usually required to pay a funding fee for the loan. Review the VA funding fee chart to see what you will owe. However, you won’t have to pay it if you are receiving disability compensation for a service-connected disability and in other limited circumstances.
You will also be responsible for paying closing costs. However, the lender can only charge you closing costs according to VA guidelines. In addition, you will have to pay a fee to have the property appraised.
For further information about VA home loans, go to the VA's Home Loan Guaranty website.