VA Loan Guidelines Explained
When considering a VA Loan, there are many guidelines that designate eligibility. Before getting started on the process, it is important for a potential borrower to understand all of the requirements associated with a VA Loan. Although all VA Loan guidelines will need to be explained by a lender, here is a sampling of what to expect:
Eligibility GuidelinesService requirements ranging from 90 days (active duty during wartime) to 6 years (National Guard) Must acquire a Certificate of Eligibility Occupancy
Guidelines. Income Guidelines Sufficient in amount Stable and reliable Anticipated to continue during foreseeable future Debts and Credit GuidelinesCredit reports must be less than 120 days old (180 days for new construction) Deferred student loan payments must be considered among monthly obligations Bankruptcy does not automatically disqualify applicants
Must personally live in the property or plan to live in the property upon its completion Allows for intermittent occupancy in situations where the veteran has a history of continuous residence in the community and had no intention to establish permanent residency elsewhere Occupancy by a spouse satisfies the requirement for those on active duty.
Equal opportunity for all qualified veterans
No down payment
(unless required by lender or purchase price is more than property's reasonable value)
Buyer is informed of reasonable value
Negotiable interest rate
Ability to finance the VA funding fee
Closing costs that are comparable with other financing programs (and maybe lower)
No mortgage insurance premiums
An assumable mortgage
Right to prepay without penalty
For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder
VA assistance to veteran borrowers in default due to temporary financial difficulty
VA cannot guarantee that a lender will provide you a loan. VA cannot compel a lender to make a loan that would violate their lender policies or VA income and credit standards VA cannot guarantee that a home is free of defects. It is the veteran's responsibility to assure that he/she is satisfied with the property being purchased. The VA appraisal is not intended to be an "inspection" of the property. A veteran should seek expert advice (a qualified residential inspection service), as necessary, BEFORE legally committing to a purchase agreement.
If you have a home built, VA cannot compel the builder to correct construction defects, although VA does have the authority to suspend a builder from further participation in the home loan program.
VA cannot guarantee that a veteran is making a good investment.
VA cannot provide a veteran with legal services.Customers have questions, you have answers. Display the most frequently asked questions, so everybody benefits.