VA Mortgage Eligibility and Requirements
VA loans are designed to ease the burden of home ownership on military service members. They offer various benefits, such as low interest rates and you don’t need a down payment to purchase a home.
However, to become eligible for a VA mortgage program, you’ll have to meet certain VA mortgage requirements. Let’s see what it takes to qualify for a VA loan in 2024.
Do you know that you’re ready to apply for a VA loan today? Start the application process and get the VA rate your benefits are meant to provide!
What Are the Requirements for VA Loan Eligibility?
Here are the requirements veterans, active military service members, and the spouses of veterans need to meet while in the military to qualify for VA loans.
Minimum VA Loan Requirements for Active-duty Service Members
Contrary to popular belief, you can get a VA loan as an active-duty military member.
At least one of the following must be true for you to be eligible for VA mortgage programs:
- Served on active duty for at least 90 days in a row during the war
- Served at least 181 days during times of peace
Lenders also review a copy of your Leave and Earnings Statement (LES) to get an idea of how much money you make. Other factors that can help you with VA mortgage loan eligibility include:
- Special pay like flight pay
- Hazard pay
- Combat pay
- Basic Allowance for Housing.
Keep in mind, once you receive your VA loan, you’re required to move into your home within 60 days of closing and make it your primary residence for at least one year.
Since this requirement can be challenging for active-duty service members, the VA allows your spouse to meet this standard in your place.
If you’re close to the end of your service, stable pay may no longer be guaranteed. To ensure you can repay the loan, lenders typically check within a year of your release from active duty to determine if you plan to reenlist.
If you don’t plan to reenlist, you must provide a civilian job offer with a start date and pay. If you intend to reenlist, you should provide a signed statement indicating your intention.
Additionally, you’ll need a signed letter from their senior officer confirming you’re allowed to reenlist with no reasons for denial.
You can also use a Power of Attorney during the mortgage process, depending on your circumstances. There are two types:
- Specific
This kind of power of attorney gives a trusted individual (often a spouse, family member, or a close friend) the ability to handle a particular transaction or act, say signing mortgage paperwork on behalf of the principal. Its scope and length are limited; it ends after the specific task is finished. - General
Grants a trusted individual more overall control so they may handle several of the principal’s legal and financial affairs, including the mortgage application. It’s more thorough and stays in effect until the principal becomes disabled or it is revoked.
If you need help figuring out which type of Power of Attorney documents you need, you can get help from one of our VA loan specialists at Rate.
Our specialists are committed to serving veterans and can provide expert advice, ensuring you maximize your VA home benefits, including offering no lender fee at close and relaxed credit policies.
What are the minimum VA loan requirements for veterans?
VA service requirements for veterans
The VA mortgage eligibility requirements for veterans vary based on when they served. Your service period should fit into one of the following categories:- Wartime duty
- Peacetime service
Wartime duty includes those who served during:
- World War II
- Korean Conflict
- Vietnam Era
- Persian Gulf War - Here, service for two years or the full period of active duty is required, with the exception of service between September 7, 1980)
- If you served during wartime, you need to have completed a minimum of 90 days of active service and received an honorable discharge or release. However, if your service was less than 90 days due to a service-connected disability, you may still qualify.
Those who fall under the category of peacetime service, served from:
- July 26, 1947 to June 26, 1950,
- February 1, 1955 to August 4, 1964, May 8,
- 1975 to September 7, 1980 (if enlisted) or October 16, 1981 (if officer)
If you served from September 7, 1980 (October 16, 1981) to August 1, 1990, you must have:
- Fulfilled 24 months of uninterrupted active duty or the entire term (minimum of 181 days) for which you were summoned or instructed to active duty, and were discharged and released under conditions that are not dishonorable.
You may also be eligible if you were discharged for a service-connected disability, discharged for the convenience of the government after completing 20 months of a 2-year enlistment, or completed 181 days of active duty and were discharged due to hardship, a service-connected compensable disability, or a medical condition that preexisted service and has not been determined to be service-connected.
What are the minimum VA loan requirements for the spouse of a veteran?
If you’re the spouse of service member, you can get a VA loan in a few different ways:
- You are either a veteran yourself or have been an active service member for at least 90 continuous days.
- You must agree to be a co-borrower on the mortgage.
- You are the surviving spouse of a veteran or service person
Under certain conditions, if you’re the spouse of a deceased veteran, you may be eligible for VA mortgage if:
- The veteran passed away while serving (or from a service-connected disability), and you did not remarry before December 16, 2003, or becoming 57 years old.
- The veteran is a prisoner of war or missing in action.
To apply for VA mortgage benefits for surviving spouses, you first need the DD Form 214 (record of service) and veteran's Certificate of Eligibility (COE).
Service members or veterans, don’t have to co-borrow with or list their spouses on the loan application. However, most people prefer to add their spouses because their income helps them to qualify for a higher loan amount.
Adding a spouse with a better credit score can strengthen your financial profile and help you secure a lower interest rate on your mortgage. On the other hand, if your spouse’s finances are in poorer shape than yours, adding them might have negative effects.
If you’re currently divorcing a spouse you co-borrowed a mortgage with, how you handle the property will influence who pays back the debt. If you’re not a co-borrower on the loan and want to keep the property, you’ll need to assume or renegotiate your mortgage.
In the case of divorce, you’ll need the participation of the veteran or service member to get another loan, unless they are deceased. You can’t get a new VA loan based on their eligibility.
How Can I Get a Certificate of Eligibility for My VA Mortgage
If you’re eligible for a VA loan, you need a VA home loan Certificate of Eligibility to prove this to your lender.
You can acquire your VA loan certificate of eligibility using three methods:
- Applying for it online with the VA eBenefits system. This is the fastest and easiest method (immediately or within a few days).
- If your lender is VA-approved, they can acquire the VA COE on your behalf
- Print the VA's COE request form, fill it out, then send it to the relevant regional loan center (addresses are on the form). This method takes more time (4 to 6 weeks).
Applying online and having easily verifiable eligibility helps you get your COE quickly (about thirty days). We advise you to apply early to allow up to six weeks of processing.
On rare occasions, the review process can extend up to a year if your discharge is classified as "less than honorable.”
This paperwork is required to provide proof of service:
- A copy of Form DD-214 serves as evidence of discharge or separation for veterans and individuals who are currently or have previously been in the National Guard or Reserves.
- A statement of service, endorsed by your commander, adjutant, or personnel officer, applicable to active-duty service members and those currently or formerly in the National Guard or Reserves.
- For every time of service, for released National Guard, you’ll need a report separation and record of service.
- Retirement Hubs Statement and evidence of the character of service (for former National Guard personnel)
- Documentation of honorable service (for former Reserve members)
Apart from helping the lender confirm your eligibility for a loan, a VA COE gives you a certain degree of entitlement. Entitlement means that the VA can guarantee your loan in case of default.
To have full entitlement, you must have never taken on a VA loan before. If you still own a residence you financed with a VA loan with or are paying a VA loan right now, your entitlement will be less.
Refinancing a VA loan also requires a VA COE. You need to show the original document COE you used to validate your VA loan or a copy, then proceed with the refinance process.
How Can I Apply for a VA Mortgage Today?
Eligibility and obtaining a COE is only part of the process. You also need to apply for the VA mortgage using these steps:
1 - Understand the VA Loan Requirements
Unlike conventional loans and other government backed loans such as FHA loans and USDA loans, VA loan requirements are more lenient. These requirements are:
- No default on government debt
- Two-year work history
- Debt-to-income (DTI) level of no more than 41%
- VA loans have fees that range from 0.5% to 3.6% of the loan amount
- The house you buy has to be your main residence
There are several benefits you can enjoy if you meet these requirements:
- No down payment required
- No loan limit
- No minimum credit score
- No mortgage insurance
- Lower closing fees
2 - Select a VA Approved Lender
Working with a VA lender, like Rate, whose education about VA backed home loans can help you maximize your VA loan benefits and obtain the most optimal VA loan rates.
Rate provides a range of services for veterans and active military members including:
- Honoring veterans by removing the lender charge of $1,640 in VA loans, which can dramatically lower your closing fees.*
- Offering loan choices for veterans with credit scores as low as 580 so homeownership becomes more accessible for veterans with different credit histories.
- Providing 30-year VA loans with $0 down payment alternatives, helping you get reasonably priced financing whether your goal is to buy a house or refinance an existing loan.
Our group of VA loan experts, which includes veterans, has processed over $20 billion in VA loans. Let one of our VA mortgage specialists guide you through this process with transparency and VA expertise.
3 - Get Your Financial Records Together
Like any other loan, you’ll be required to provide some basic financial records as well as some specific information for the VA home loan program . These records include:
- Leave and Earnings Statement (if you are on active duty)
- Pay stubs from the last thirty days
- Bank statements from the last sixty days
- Letters of explanation for any large deposits, employment gaps, or credit problems.
4 - Choose a House and Close Your Financing
Closing on your house comes last once you have your mortgage approved and the seller accepts your offer. Like any other mortgage closing for purchase or refinance, a VA home loan closing includes:
- Obtaining documentation proving your homeowners insurance policy
- Reviewing your Closing Disclosure; it will be sent three days before your closing.
- Conducting a final walkthrough of your house with your real estate agent before closing.
- Verifying the closing address, which can be an escrow company, an attorney's office, or a title company
- Bringing a government-issued ID and a cashier's check or wire information for your closing funds
- Reviewing and signing any necessary paperwork at closing
VA mortgages always require VA appraisals unlike other loan programs.
Like other mortgages, VA home loans have closing costs ranging from 2% to 6% of the loan balance. VA loan closing costs include lender fees, which are limited to 1% of the loan amount.
VA home loans also have a funding charge ranging from 0.5% to 3.6% of the loan amount. The percentage depends on your down payment amount and whether you are buying or refinancing the house.
VA loan closing fees include:
- VA funding fee Loan origination fee paid by your lender
- Mortgage points for a reduced rate
- Credit report costs and payment of any outstanding credit card balances or judgments
- VA appraisal fees
To estimate your future monthly payments, you can use this mortgage calculator.
Join 57,000 Veterans Enjoying Rate’s No Lender Fee at Close & Relaxed Credit Offering
We understand that securing VA loan eligibility can be challenging. Our VA specialist team includes Veterans who have helped other Veterans, like you, process billions in VA loans.
Rate always goes above and beyond for the people who have served and are standing by to help guide you in your search for a new home.
So whether you’re looking to understand VA loan limits or shopping around for transparent rates and payments, you can check out our current VA home loan rates or apply for a mortgage today!
VA Mortgage FAQs
1. Can I use a VA loan to purchase a second home or investment property?
No, VA loans are only for primary residences and cannot be used to purchase second homes or investment properties.
2. Are there any restrictions on the types of property I can buy with a VA loan?
Yes, VA loans can only be used to purchase properties that are intended for residential use, such as single-family homes, condos, and some multi-family units, but not commercial properties.
3. Can VA loan benefits be restored if I sell my home?
Yes, you can restore your VA loan entitlement after selling your home and paying off the loan, allowing you to use your VA benefits again.
4. Is it possible to have more than one VA mortgage at the same time?
Yes, under certain conditions, you can have more than one VA loan at the same time if you have enough remaining entitlement and meet certain lender requirements.
* Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Guaranteed Rate for current rates and for more information. Guaranteed Rate, Inc. is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture, or any other government agency. * Waived $1440.00 lender fee available for VA loans that have a triggered RESPA app date as of January 1, 2022, through December 31, 2022 at 11:59pm EST. This offer does not extend to Housing Finance Agency loans. ‘Triggered RESPA’ in accordance with Regulation X, is defined as lender receipt of all six pieces of information received in a secure format; applicant name, property address, home value, loan amount, income and SSN. Not all borrowers will be approved. Borrower’s interest rate will depend upon the specific characteristics of borrower’s loan transaction, credit profile and other criteria. Offer not available from any d/b/a or operations that do not operate under the Guaranteed Rate name. Restrictions apply.
