Current service members and veterans have earned the right to find a great place to live. So when they want a place to call home, their grateful nation has ways to support their home buying goals—namely, through VA loans.
What is a VA loan?
VA loan is a type of home financing that is guaranteed in part by the U.S. Department of Veteran Affairs. It’s meant to help military families purchase a home or do home improvements.
What are the benefits?
Because it is backed by the government, mortgage lenders feel there is less risk with VA loans, so the terms—depending on your credit score and ability to repay the loan—tend to be more favorable. Eligible borrowers can often buy a home with 0% down, it usually has low interest rates, and doesn’t require PMI, or private mortgage insurance. There is no prepayment penalty and limited closing costs.
Who is eligible?
Current service members, veterans, and surviving spouses who meet eligibility requirements can take advantage of VA loans to purchase a home. And getting a VA loan isn’t just a one-time thing for those who qualify—they can use this benefit for every home they buy. They can also use it to turn their home equity into cash to be used for refinancing, paying for college, or home renovations.
What does it cost?
VA loans do have some fees based on whether you’re making a down payment and how large it is, your category of service, and whether it’s the first time you’re using this type of loan. But some mortgage lenders offer incentives for veterans such as a waived appraisal fee.
You must meet certain criteria in regard to military service to qualify for a VA loan. Members of the selected reserve or National Guard or other organizations and some surviving spouses of service members may also be eligible. You can check your eligibility at ebenefits.va.gov.
Find a real estate agent.
Finding a real estate agent who fits your needs is especially important when you have a VA loan. Make sure that you work with a trusted, qualified real estate agent with experience in the VA loan process. Trulia can help you connect with trustworthy agents who will work hard for you through Premier Agents. These agents meet our high standard for quality service, so you know you’ll have a great home buying experience with their personal support.
A mortgage lender will issue the VA loan, and they’ll need to see your Certificate of Eligibility. Before reaching out to mortgage lenders, make sure you have it in hand. Check with the VA to find out exactly which documents you’ll need to gather up to get your COE. They’ll vary depending on if you’re a veteran, active military member, a surviving spouse, or another type of eligible borrower.
Find a lender and get pre-approved.
Not all mortgage lenders work with the VA loan program, so research lenders that do. You’ll still qualify for different mortgage terms with different lenders, so you’ll want to identify at least three mortgage lenders you’re interested in working with. Read our guide on how to find a mortgage lender for more details.
Apply for pre-approval with at least three mortgage lenders. Mortgage pre-approval is your first step toward applying for a VA loan. Just like with any other type of mortgage, pre-approval is like a pre-application process that results in a pre-approval letter. This letter tells sellers that you are highly likely to get a mortgage, and it lets you know exactly how much you’re likely to qualify for.
Find a house that fits VA requirements.
It’s not just you who has to fit certain eligibility requirements. The VA underwrites homes that meet their minimum property requirements. A VA appraiser will be involved and will need to verify that the home meets certain safety, sanitation, and structural integrity standards. But many types of houses can be eligible; you can buy a condo, build a new construction home, purchase and improve a home, or even buy a manufactured home.
Include a VA contingency clause.
Once you’ve found a house and are putting in an offer, the VA suggests you have a contingency clause in your agreement in case you cannot secure a VA loan. The VA’s website offers an example of such a clause that will help ensure that you will be able to get out of the home purchase without a penalty.
Continue with your home purchase as normal.
From this point on, the home buying process is just like any other. Check out our full guide on how to buy a house for all the details.
Specially Adapted Housing Grant
Also a VA product, SAH is available to help disabled veterans and service members live in homes that are accessible and barrier-free. The grant can be used to build or renovate a home.
Dream Makers Program
Supported by the Pentagon Federal Credit Union Foundation (PenFed), this program offers matching grants for down payments and closing costs for eligible service members and veterans.
State and local government programs
Some states and cities have their own programs for veterans, such as New York’s Homes for Veterans Program or Atlanta’s ANDP Homes. The benefits and goals of these programs vary widely. Your real estate agent’s local expertise can be counted on to help you learn about programs in your city and state.
Ready to find your new home with a VA loan? See what’s available now on Trulia.