One of the many challenges facing our country’s men and women of the uniform is adjusting them to life after they complete their service.
While those who never joined the U.S. military are able to work up toward making a down payment on a home over time, veterans were serving during that time.
They may also starting out in a new field of work post-deployment, reducing their income compared with others who are many years into a career. As a result, may veterans starting out their lives as civilians are at a disadvantage when it comes time to look for a home.
That’s where VA Home Loans come in to help.
Administered by the U.S. Department of Veterans Affairs, VA Home Loans aim to level the playing field for veterans (and active-duty servicemembers after a period of time) on buying a home.
A VA Home Loan guarantees a much smaller or no down payment, waivers of multiple fees associated with buying a home (such as some types of closing costs) and no requirements for private mortgage insurance.
Additionally, a VA Home Loan may also provide veterans and eligible active-duty servicemembers with financial assistance making mortgage payments during times of difficulty. VA Home Loans also include funding for veterans with disabilities to make modifications to a new or existing home.
Applying for a VA Home Loan
To apply for a VA Home Loan, a veteran must complete a Certificate of Eligibility that shows they are indeed eligible for a VA Home Loan.
Eligibility requirements include the length of service (which ranges depending on enlistment date and may be up to 24 months) and the reason for being discharged (if applicable). The certificate can now be obtained electronically by servicemembers using eBenefits, or the lender can request the certificate on its own.
Veterans and active duty servicemembers aren’t the only ones who can apply for a VA Home Loan.
Eligible surviving spouses who do not remarry may also apply, as well as National Guard and those in the Reserve who meet certain requirements and your lender can request this for you.
Things to Consider When Finding a Home
Home buyers using a VA Home Loan can apply to buy most homes or condominiums a conventional home buyer could. A VA Home Loan sets veterans apart in several ways from a conventional home buyer, however.
As the loan is backed by the government, it creates a more favorable situation for the veteran in the eyes of the lender.
On the flip side, many steps need to take place for veterans that other home buyers don’t need to complete, some for which many lenders may not be familiar.
The veteran needs to prove they’re eligible for the loan and that the property meets the government’s established minimum property requirements for a VA Home Loan. Some of the minimum property requirements include proper heating, electricity and roof structural integrity.
These are typical to other housing loan requirements but inspections are administered by the U.S. Department of Veterans Affairs, which tends to be very critical of any part of the home needing repairs or lacking in functionality. However, if you are interested in purchasing a home that you’d like to upgrade, additional funds are available for home improvements in certain cases.
While some common closing and insurance fees are waived for a VA Home Loan, there is a VA funding fee that veterans need to pay (unless you are exempt). Having a Realtor and Lender work with you who understands the paperwork necessary to prove eligibility and the minimum property requirements will make this process much easier.
Last, veterans and servicemembers should be aware of loan limits based on home values in the location you want to purchase property in the United States. In most cases, the maximum amount of the loan is $484,350.
Leveling the Playing Field
Overall, VA Loans are a great deal for all parties involved. It’s respectful toward the sacrifices made by veterans by leveling the playing field after their tour of service completes.
Banks and the housing market get customers that they otherwise would have missed due to the challenge associated with making a down payment.
And the government and economy benefit by placing more people in homes and a domestic situation that will improve their outlook and establish a strong foundation for their lives.
At the Weeks Team, we are proud to work with our nation’s finest in acquiring a home with a VA Home Loan. Our experience with the various documents and processes required for a VA Home Loan make us better equipped to shepherd you through this sometimes confusing process. We also care deeply about military families and ensuring they get the best deal they can on a home.