VA Loan Qualifications and Eligibility Requirements
The Veterans Administration (VA) will guarantee that a loan made by an approved lending institution will be paid.
What is VA Loan Qualifications and Eligibility Requirements?
The following are requirements to receive a VA loan:
- The veteran must have served 181 days active service in the military since 1940.
- A veteran’s basic entitlement is $36,000 (or up to $60,000 for certain loans over $144,000). Lenders will generally lend up to 4 times the available entitlement without requiring a down payment, provided the veteran’s income and credit qualify and the property appraises for the asking price. There will be a VA funding fee charged for origination of the loan.
- VA will guarantee real property, mobile homes and plots for the mobile home.
- The VA requires that a veteran assumes liability for the loan. If a veteran does not pay the mortgage as agreed there will be a foreclosure.
- The property must be owner-occupied for at least one year.
- The veteran must first apply for a Certificate of Eligibility in order to obtain a VA loan.
- The house must qualify with an appraisal and be issued a Certificate of Reasonable Value.
- The amount of the loan is limited to the amount shown on the Certificate of Reasonable Value.
- Loans may be assumed by non-veterans, but the veteran is still liable.
- VA will lend money in rural areas where there is no financial institution available.
- Points can be paid by either the seller or the buyer.
- If a veteran has died, his/her widow or widower may be eligible for a VA loan. In order to be eligible for a VA loan, the widow or widower may not be married again at the time of application.
- If a loan is assumed by another veteran and the seller has used all of his/her eligibility, the seller cannot use his/her eligibility again, unless he is given a novation* because he/she will still be liable for the loan.
- FHA and VA will allow the buyer to pay more than appraised value, if the buyer pays the difference in cash.
What is a VA loan maximum?
There is no maximum VA loan, but lenders will generally limit VA loans to $240,000. This is because lenders sell VA loans in the secondary market, which currently places a $240,000 limit on the loans. For loans up to $240,000, it is usually possible for qualified veterans to obtain no down payment financing. (These numbers change from time to time.)
What is a downpayment on VA Loan?
A qualified veteran may borrow up to 100% of the loan with no down payment.
What is a prepayment penalties for VA loan?
VA does not allow prepayment penalties to be charged if a veteran pays off a loan early.