VA loans are a no money down mortgage offered to active duty servicemembers, military veterans, and some military spouses. VA loans are issued by mortgage lenders and banks but are guaranteed by the Department of Veterans Affairs (VA).

Because of the VA guarantee, lenders can offer loans with $0 down to veterans who qualify. VA loans also have no monthly mortgage insurance premium, also known as private mortgage insurance (PMI).

A VA home loan can be a powerful way for veterans to purchase a home or refinance an existing mortgage.

VA Loan Requirements

Lenders of VA loans set requirements for mortgages in addition to those set by the VA. Typical VA loan requirements include:

• Sufficient reliable income to repay the loan
• Acceptable levels of debt or debt to income ratio
• A credit score eligible for a VA loan

VA Home Loan Program Eligibility

You may be eligible for a VA loan by meeting one or more of the following requirements:

• You served 90 consecutive days of active service during wartime.
• You served 181 days of active service during peacetime.
• You have 6 years of service in the National Guard or Reserves.
• You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.

If you think you meet this eligibility requirements, you can access your Certificate of Eligibility (COE) from VA.gov

A COE certifies to a lender that you are eligible for a VA home loan.

Types of VA Loans from the Department of Veterans Affairs

VA Purchase Loan

A VA purchase loan is a mortgage to purchase a home.

VA IRRRL

A VA IRRRL or Interest Rate Reduction Refinance Loan allows you to refinance your existing VA loan.

The VA IRRRL is sometimes called a “streamline” refinance. With these types of VA loans, you can:

• Lower your monthly mortgage payment by getting you a lower interest rate, or
• Make your monthly payments more stable by moving from a loan with an adjustable or variable interest rate (an interest rate that changes over time) to one that’s fixed (the same interest rate over the life of the loan)

You may be eligible for a VA IRRRL if you meet all of these requirements:

• You currently have a VA-backed home loan, and
• You’re using the IRRRL to refinance your existing VA-backed home loan, and
• You can certify that you currently live in or used to live in the home covered by the loan

VA Cash-Out Refinance

A VA cash-out refinance allows you to take cash out of your home equity or refinance a non-VA loan into a VA-backed loan.

VA Energy Efficient Mortgage

A VA Loan can be one of the most powerful benefits available to military personnel like you to achieve your financial goals of homeownership and financial independence. Offering unique benefits to active duty, reservists, national guardsmen, and of course, veterans, the VA Home Loan is one of the best ways to purchase a home.

Advantages of a VA Home Loan

The distinctive advantages of a VA Home Loan include:

• No money down, meaning you can start looking for a home today
• Competitive interest rates, saving you potentially thousands over the course of the loan
• No Private Mortgage Insurance (PMI), which can save you hundreds of dollars every month

All of these benefits are unavailable to the general population and can put home ownership within the reach of every rank, officer or enlisted. Many banks have been tightening lending and credit standards for years since the 2008-2009 financial crisis and may not understand your military income or unique situation. A VA loan can be the easiest and cheapest path toward home ownership for you and your family.

What is a VA Loan?

A VA loan is offered to eligible military servicemembers and veterans to purchase homes. The program was created in 1944 to help returning soldiers afford homes. It's been running successfully ever since. Over 20 million military personnel have taken advantage of this unique, military only opportunity.

The loan is issued by approved lenders and backed by the federal government. Therefore, lenders can give you their most competitive interest rates, take no money down, and don't have to charge you PMI. This saves you thousands and gets you pre-approved to buy your home faster than you can imagine.

VA Loans can be used for:

• First time homebuyers
• Homebuyers with 1 or more properties
• Refinancing a non-VA loan or VA loan mortgage, lowering your monthly payments OR allowing you to take equity out of your home
• Rental properties (investment properties) as long as you occupy at least one unit of the property. For instance, you could buy a fourplex and rent out three of the units, while living in the fourth. Or, if you get PCS orders, you could rent out your primary residence while it was still under a VA loan. You CANNOT use a VA loan for a pure investment/rental property that you do not occupy for at least a year.

Who is eligible for a VA Loan?

If you're reading this blog about military financial independence, probably YOU! Active duty, reservists, guardsmen, retirees, veterans: just about everyone who's taken an oath to “protect and defend the Constitution of the United States” is eligible for this amazing benefit.

You are most likely eligible for a VA Home Loan if you meet one or more of the following criteria:

• You have served 90 consecutive days of service during wartime
• You have served 181 days of service during peacetime
• You have more than 6 years of service in the National Guard or Reserves
• You are the spouse of a service member who died in the line of duty or as a result of service-related disability

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