Questions about eligibility.
Q: How do I apply for a VA guaranteed loan?
A: You can apply for a VA loan at any mortgage lender that participates in the VA home loan program. At some point, you will need to get a Certificate of Eligibility from VA to prove to the lender that you are eligible for a VA loan.
Q: How do I get a Certificate of Eligibility?
A: To get a Certificate of Eligibility, you need to submit a form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement. If you need assistance obtaining this form, click here
Or you can call Toll Free: 858-505-0600
email@example.com to have a copy mailed to you. Send it to any VA Regional Office.
You must include a copy of your DD214 with the form 26-1880. If you are on active duty, you must submit a statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters showing date of entry on your current active duty period and the duration of any time lost.
Q: I already got one VA loan. Can I get another one?
A: Yes, depending on the circumstances.
If you have paid off your prior VA loan and disposed of the property, you can have your entitlement restored for additional use. To obtain restoration of entitlement, the veteran must send VA a completed VA Form 26-1880, along with evidence that the property has been disposed of and the loan repaid in full. This evidence can be in the form of a pay-off statement from the former lender, or a copy of the HUD-1 settlement statement completed in connection with the sale of the property. The application can be presented to any VA Regional Office. A veteran can also obtain restoration of entitlement, on a one-time basis, if the prior VA loan has been paid in full, (re-financed to a conventional loan), but the property has not been sold.
Q: I sold the property I obtained with my prior VA loan on an assumption. Why can’t I get my entitlement restored to use for a new home?
A: In this case the veteran’s entitlement can be restored only if the assumer is also an eligible veteran who is willing to substitute his or her entitlement for that of the original veteran. Otherwise, the original veteran cannot have entitlement restored until the assumer has paid off the VA loan.
Q: My prior VA loan was assumed, the assumer defaulted on the loan, and VA paid a claim to the lender. VA said it wasn’t my fault and waived the debt. Now I need a new VA loan but am told that I am not eligible. Why not?
Q: My prior loan was foreclosed on, or I gave a Deed in Lieu of Foreclosure, or VA paid a compromise claim. I was released from liability on the loan and/or the debt was waived. Can I get another VA loan?
A: Although the veteran’s debt was waived by VA, the Government has still suffered a loss on the loan. The law does not permit the veteran’s entitlement to be restored until the loss has been repaid in full.
Questions about VA Home Loans.
Q: What is a VA guaranteed loan?
A: These loans are made by American preferred lending. VA’s guaranty on the loan protects the lender against loss if the payments are not made, and is intended to encourage lenders to offer veterans loans with more favorable terms. The amount of guaranty on the loan depends on the loan amount and whether the veteran used some entitlement previously. With the current maximum guaranty, a veteran who hasn’t previously used the benefit may be able to obtain a VA loan up to $417,000 depending on the borrower’s income level and the appraised value of the property.
Q: How do I apply for a VA guaranteed loan?
A: You can apply for a VA loan at any mortgage lender that participates in the VA home loan program such as Freedom Mortgage. At some point, you will need to get a Certificate of Eligibility, as detailed above, to prove to the lender that you are eligible for a VA loan.
Q: How big of a loan can I get? If my guaranty entitlement is $36,000, does this mean I am limited to a $36,000 loan?
A: No, you can get a loan up to $417,000 depending on your income, credit, and other considerations.
Q: Can I get a loan for a home outside of the United States?
A: Unfortunately, the law only allows VA to guaranty loans on property in the United States, its territories, or possessions.
Q: Can I get a VA loan if I have had a bankruptcy in the last few years?
A: VA credit standards state that a veteran with a bankruptcy less than 3 years ago would generally not be considered a satisfactory credit risk unless: the veteran or spouse has obtained items on credit since the bankruptcy and has paid the obligations in a satisfactory manner for a continued period; and the bankruptcy was caused by circumstances beyond the control of the borrower, which would have to be verified. A bankruptcy discharged discharged 3 to 5 years ago must be given some consideration in the underwriting of the loan. A bankruptcy discharged more than 5 years ago may be disregarded. These are the minimum standards that lenders must follow when making a VA loan. In 95% of the cases, lenders make the decision to approve a loan without VA’s prior approval. Keep in mind that lenders also have money at risk in giving you a VA loan, so they may have stricter credit standards than those mandated by VA.
Q: Why do I have to pay a fee for a VA home loan? Since I paid a fee for my first loan, why is there a larger fee for my second loan?
A: The VA funding fee is required by law. The fee, currently 2 percent on no downpayment loans, is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduce the cost to taxpayers. The funding fee for second time users who do not make a downpayment is 3 percent. The idea of a higher fee for second time use is based on the fact that these veterans have already had a chance to use the benefit once, and also that prior users have had time to accumulate equity or save money towards a downpayment. Second time users who make a downpayment of at least 5 percent pay a reduced funding fee of 1.5 percent, the same as first time users making the same downpayment. For a 10 percent downpayment, the fee drops to 1.25 percent. The effect of the funding fee on a veteran’s financial situation is minimized since the fee may be financed in the loan.
Q: I want to buy a house with a VA loan. Do I need to occupy the property?
A: The law requires that you certify that you intend to occupy the property as your home. This requirement is considered satisfied if you actually intend to occupy the property as your home and in fact so occupy it when the loan is closed or within a reasonable time afterward.
Q: I am a single veteran stationed overseas and want to buy a home in my home town. My friends who are married can do this with their spouses occupying the property in their place, but VA says I can’t do this with my parents or other relatives occupying on my behalf. Isn’t this discrimination against single veterans?
A: The law specifically provides that occupancy by the veteran’s spouse satisfies the personal occupancy requirement. The law makes no provision for occupancy by any other relatives as a substitute for personal occupancy by the veteran.
Q: May a veteran join with a non veteran who is not his or her spouse in obtaining a VA loan?
A: Yes, but the guaranty is based only on the veteran’s portion of the loan. The guaranty cannot cover the nonveteran’s part of the loan. Consult lenders to determine whether they would be willing to accept applications for joint loans of this type. Lenders that are willing to make these types of loans will likely require a downpayment to cover risk on the unguaranteed, nonveteran’s portion of the loan. Unlike other loans, the lender must submit joint loans to VA for approval before they are made. Both incomes can be used to qualify for the loan. However, the veteran’s income must be sufficient to repay at least that portion of the loan related to the veteran’s interest in (portion of) the property and the nonveteran’s income adequate to cover the rest.
Q: If a veteran dies before the loan is paid off, will the VA guaranty pay off the balance of the loan?
A: No. The surviving spouse or other co-borrower must continue to make the payments. If there is no co-borrower, the loan becomes the obligation of the veteran’s estate. Mortgage life insurance is available but must be purchased from private insurance sources.