VA Loans
VA Loans Overview
VA loans are mortgages guaranteed by the Department of Veteran Affairs for qualified veterans, active service members, and spouses. These loans offer military veterans exceptional benefits, including low interest rates and no down payment requirement. This program was designed to help military veterans realize the American dream of homeownership.
What Are VA Loans?
The Veterans Administration doesn’t provide the loan itself but provides insurance to lenders in the case that you default on a loan. Because the mortgage is guaranteed, lenders will offer a lower interest rate and terms than a conventional home loan. VA home loans are available in all 50 states. A VA loan may also have reduced closing costs and no prepayment penalties.
Benefits Of A VA Loan
By far, the single-largest benefit of the VA loan is that qualified Veterans can purchase without a down payment. This huge advantage allows Veterans and service members to buy homes without having to spend years saving for that typical lump-sum payment.
Unlike conventional and FHA loans, VA loans don’t require monthly mortgage insurance. No private mortgage insurance means Veterans who secured a VA loan last year will save billions in mortgage insurance costs over the life of their loans.
VA interest rates are typically 0.5 to 1 percent lower than conventional interest rates. Lower rates help Veterans save every month and over the life of their loan.
Since the Department of Veterans Affairs only oversees the loan program and does not issue loans, the agency does not set or enforce credit score minimums.
VA Loan Requirements
To qualify for a VA loan you must:
- Have served 181 days of active service during peacetime.
Have served 90 consecutive days of active service during wartime.
Have served more than 6 years of service with the National Guard or Reserves
Have served 90 days total and 30 consecutive days under Title 32
Are the spouse of a service member who lost their life in the line of duty or as the result of a service-connected disability. You generally cannot have remarried, although there are exceptions.
Eligible borrowers include active-duty service members, members of the National Guard, surviving spouses of veterans, cadets at the U.S. Military, Air Force or Coast Guard Academy, Midshipmen at the U.S. Naval Academy,
officers at the National Oceanic & Atmospheric Administration, and any other qualifying veteran.