Q: How do I apply for a VA guaranteed
A: You can apply for a VA loan with 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
A: VA determines your eligibility and, if you are qualified,
VA will issue you a Certificate of Eligibility to be used in
applying for a VA loan.
To request a certificate from VA, you
must complete VA Form 26-1880, Request For A Certificate
of Eligibility For Home Loan Benefits, and submit it to the VA Eligibility Center. If you have been
discharged from regular active duty, it may be possible to obtain
a determination without providing evidence of your military
service. However, it is best to provide such evidence
with your VA Form 26-1880 to prevent possible delays
in processing your request.
Many lenders also have access to an
Internet based, Automated Certificate of Eligibility system called
ACE. The ACE system allows lenders to input certain data about the
veteran. If the veteran's records are in VA's corporate database
and the veteran is eligible for a certificate of eligibility, the
system will issue a certificate online that can be printed using
the lender's printer.
Q: What is acceptable proof of
A: If you are still serving on regular active duty, you must
include an original statement of service signed by, or by
direction of, the adjutant, personnel officer, or commander of
your unit or higher headquarters which identifies you and your
social security number, and provides your date of entry on
your current active duty period and the duration of any time
If you were discharged from regular
active duty after January 1, 1950, a copy of DD Form 214,
Certificate of Release or Discharge From Active Duty should be
included with your VA Form 26-1880. If you were discharged after
October 1, 1979, DD Form 214 copy 4 should be included. A PHOTOCOPY OF DD214 WILL SUFFICE.....DO NOT SUBMIT
AN ORIGINAL DOCUMENT.
If you were discharged from the
Selected Reserves or the National Guard, you must include
copies of adequate documentation of at least 6 years of honorable
service. If you were discharged from the Army or Air Force
National Guard, you may submit NGB Form 22, Report of Separation
and Record of Service, or NGB Form 23, Retirement Points
Accounting, or itís equivalent. If you were discharged from the
Selected Reserve, you may submit a copy of your latest annual
points statement and evidence of honorable service. Unfortunately,
there is no single form used by the Reserves or National Guard
similar to the DD Form 214. It is your responsibility to furnish
adequate documentation of at least 6 years of honorable
If you are still serving in the
Selected Reserves or the National Guard, you must include
an original statement of service signed by, or by the direction
of, the adjutant, personnel officer, or commander of your unit or
higher headquarters showing the length of time that you have been
a member of the Selected Reserves. Again, at least 6 years
of honorable service must be documented.
If you have been activated, certain
members of the reserves and national guard who may not have
fulfilled their 6 years of required duty, may be eligible for a VA
home loan by serving 90 days of active duty war time service with
an honorable discharge. VA would require Form DD214 as proof of
their war time service.
Q: How can I obtain proof of military
A: Standard Form 180, Request Pertaining to Military
Records, is used to apply for proof of military
service regardless of whether you served on regular active duty or
in the selected reserves. This request form is NOT processed by
VA. Rather, Standard Form 180 is completed and mailed to the
appropriate custodian of military service records. Instructions
are provided on the reverse of the form to assist in determining
the correct forwarding address.
Q: I have already obtained one VA
loan. Can I get another one?
A: Yes, your eligibility is reusable depending on the
circumstances. Normally, if you have paid off your prior VA loan
and disposed of the property, you can have your used eligibility
restored for additional use. Also, on a one-time only
basis, you may have your eligibility restored if your prior VA
loan has been paid in full but you still own the property.
In either case, to obtain restoration of eligibility, the veteran
must send VA a completed VA Form 26-1880 to the Eligibility Center. To prevent delays in
processing, it is also advisable to include evidence that the
prior loan has been paid in full and, if applicable, the property
disposed of. This evidence can be in the form of a paid-in-full
statement from the former lender, or a copy of the HUD-1
settlement statement completed in connection with a sale of the
property or refinance of the prior loan.
Q: I sold the property I obtained with my prior VA loan on an
assumption. Can I get my eligibility restored to use for a new
A: In this case the veteranís eligibility can be restored only
if the qualified assumer is also an eligible veteran who is
willing to substitute his or her available eligibility for that of
the original veteran. Otherwise, the original veteran cannot have
eligibility restored until the assumer has paid off the VA
Q: My prior VA loan was assumed, the
assumer defaulted on the loan, and VA paid a claim to the lender. VA
said it wasnít my fault and waived the debt. Now I need a new VA
loan but I am told that my used eligibility can not be restored.
Q: My prior loan was foreclosed on, or
I gave a deed in lieu of foreclosure, or the VA paid a compromise
(partial) claim. Although I was released from liability on the loan
and/or the debt was waived, I am told that I cannot have my used
eligibility restored. Why?
A: In either case, although the veteranís debt was waived by
VA, the Government still suffered a loss on the loan. The law does
not permit the used portion of the veteranís eligibility to be
restored until the loss has been repaid in
Q: Only a portion of my eligibility is
available at this time because my prior loan has not been paid in
full even though I donít own the property anymore. Can I still
obtain a VA guaranteed home loan?
A: Yes, depending on the circumstances. If a veteran has
already used a portion of his or her eligibility and the used
portion cannot yet be restored, any partial remaining eligibility
would be available for use. The veteran would have to discuss with
a lender whether the remaining balance would be sufficient for the
loan amount sought and whether any down payment would be
Q: Is the surviving spouse of a
deceased veteran eligible for the home loan benefit?
A: The unmarried surviving spouse of a veteran who died
on active duty or as the result of a service-connected
disability is eligible for the home loan benefit. If you wish
to make application for the home loan benefit as a surviving
spouse, contact the Eligibility Center. In addition, a
surviving spouse who obtained a VA home loan with the veteran
prior to his or her death (regardless of the cause of death), may
obtain a VA guaranteed interest rate reduction refinance loan. For
more information, contact the Eligibility
Q: Are the children of a living or
deceased veteran eligible for the home loan benefit?
A: No, the children of an eligible veteran are not eligible
for the home loan benefit.
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What Is A VA Guaranteed Home
VA guaranteed loans are made
by private lenders, such as banks, savings & loans, or
mortgage companies to eligible veterans for the purchase of a home
which must be for their own personal occupancy. The guaranty means
the lender is protected against loss if you or a later owner fail
to repay the loan. The guaranty replaces the protection the lender
normally receives by requiring a down payment allowing you to
obtain favorable financing terms. What is pre-purchase counseling and why is it
Pre-purchase counseling gives a person
information on (1) the process of buying a home, (2) the key
players in the home buying process, and (3) debt management. The
goal is to create a well informed homebuyer. While VA does not
require such counseling, we strongly recommend it. There is
usually no charge for the housing counseling.
To locate a housing counseling office
call (800)217-6970 or visit HUDs website at http://www.hud.gov/. The
Department of Housing and Urban Development (HUD) maintains both
the phone number and website.
Does my entitlement guaranty that I
will get a home loan?
No, VA cannot compel a lender to make a
loan that would violate their lender policies. Lenders must also
comply with VA income and credit standards. If a lender is
unwilling to make a loan to you, we can only suggest that you try
How much is my entitlement?
Entitlement for a VA home loan is broken down
into two different groups. The first group of entitlement is called basic entitlement
and it amounts to $36,000. Basic entitlement is used to guaranty VA home loans up to $144,000.
Effective December 10, 2004, VA also changed the amounts for bonus entitlement for loans over $144,000.
That bonus entitlement changes annually and varies depending on the county where the property is located.
The typical amount of bonus entitlement for 2009 is $68,250. That amount combined with the
basic entitlement of $36,000 allows veterans who qualify to obtain a VA home loan with no
down payment, up to $417,000 or more depending on the county. If you have used some of your
basic entitlement, you may be eligible to use the remaining basic and bonus entitlement.
Lenders will generally lend up to 4 times your available entitlement without requiring a
down payment, provided your income and credit qualify and the property appraises for the
Is there a maximum loan limit?
Effective December 10, 2004, each year the maximum VA
home loan amount will change to an amount indexed to the Federal Home Loan Mortgage Corporation's
(Freddie Mac) maximum conforming loan amount. Effective October 10, 2008 the Veterans Benefits
Improvement Act of 2008 changed the maximum VA home loan to meet the revised Freddie Mac conforming
loan limits. The loan amount for 2009 is $417,000 in most counties, but that legislation also
allows for higher loan amounts depending on whether the veteran is looking to purchase a home
in what is deemed a "high cost" county by Freddie Mac. In some cases, the veteran can exceed
the $417,000 loan amount, with a down payment that is equal to 25% of the amount in excess of
the $417,000. Veterans should inquire with their lender with regard to this provision.
In order to purchase a home using the VA maximum loan amount, veterans would be required to
have sufficient entitlement. Secondary market participants generally require at least a
25 percent guaranty on VA home loans.
How do I get a Certificate of
You must complete VA Form 26-1880, Request for a Certificate
of Eligibility for VA Home Loan Benefits and submit it to the VA Eligibility Center along
with acceptable proof of service as described on the
instruction page of the form.
How do I obtain a VA Home
- Select a home and discuss the purchase
with the seller or selling agent. Sign a purchase contract
conditioned on approval of your VA home loan.
- Select a lender. Present them
with your Certificate of Eligibility or have the lender obtain an
Automated Certificate of Eligibility (ACE). The lender will then
complete a loan application.
- The lender will develop all credit and
income information. They will also request VA to assign a licensed
appraiser to determine the reasonable value for the property. A
Certificate of Reasonable Value will be issued. Note: You
may be required to pay for the credit report and appraisal unless
the seller agrees to pay.
- The lender will let you know
the decision on the loan. You should be approved if the
established value and your credit and income are
- You (and spouse) attend the
loan closing. The lender or closing attorney will explain the loan
terms and requirements as well as where and how to make the
monthly payments. Sign the note, mortgage, and other related
- The loan is sent to VA for
What are the benefits of a VA home
- Equal opportunity.
- No down payment (unless required by
the lender or the purchase price is more than the reasonable value
of the property).
- Buyer informed of reasonable
- Negotiable interest rate.
- Ability to finance the VA funding fee
(plus reduced funding fees with a down payment of at least 5% and
exemption for veterans receiving VA compensation).
- Closing costs are comparable with
other financing types (and may be lower).
- No mortgage insurance premiums.
- An assumable mortgage.
- Right to prepay without
- For homes inspected by VA during
construction, a warranty from builder and assistance from VA to
obtain cooperation of builder.
- VA assistance to veteran borrowers in
default due to temporary financial difficulty.
What can VA not do?
- Guarantee that a home is free of
defects. VA guarantees only the loan. It is your responsibility to
assure that you are satisfied with the property being purchased.
The VA appraisal is not intended to be an "inspection" of the
property. You should seek expert advice (a qualified residential
inspection service), as necessary, BEFORE legally committing to a
- If you have a home built, VA cannot
compel the builder to correct construction defects although VA
does have the authority to suspend a builder from further
participation in the home loan program.
- VA cannot guarantee that you are
making a good investment.
- VA cannot provide you with legal
Is a guaranteed loan a
No, it must be repaid, just as you must
repay any money you borrow. If you fail to make the payments you
agreed to make, you may lose your home through
Can I get a loan for a home outside of
the United States?
Unfortunately, the law only allows VA
to guaranty loans on property in the United States, its
territories, or possessions.
Can I get a VA loan if I have had a
bankruptcy in the last few years?
The fact you and/or your spouse have
been adjudicated bankrupt does not in itself disqualify you for a
VA home loan. The following rules apply:
- If the bankruptcy was discharged more
than 2 years ago, it may be disregarded
- If the bankruptcy was discharged
within the last 1 to 2 years, it is probably not possible to
determine that you and/or your spouse are a satisfactory credit
risk unless both of the following requirements are
- you and/or your spouse have
reestablished satisfactory credit, and
- the bankruptcy was cause by
circumstances beyond you and/or your spouses control (such as
unemployment, medical bills, etc.)
- If the bankruptcy was discharged
within the past 12 months, it will not generally be
possible to determine that you and/or your spouse are satisfactory
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?
The VA funding fee is required by law.
For loans with no down payment, the fee is currently 2.15 percent
for veterans who served on active duty, and 2.4 percent for
reservists and national guard members. The funding fee 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
down payment is 3.30 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 down
payment. For veterans who make a down payment of at least 5
percent or at least 10 percent, the funding fee is reduced.
Veterans should consult their mortgage lender regarding the
benefits of putting a down payment towards their VA home loan. The
effect of the funding fee on a veteran's financial situation is
minimized since the fee may be financed in the
I want to buy a house with a VA loan. Do
I need to occupy the property?
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
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
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
May a veteran join with a non veteran
who is not his or her spouse in obtaining a VA loan?
Yes, but the guaranty is based only on
the veteran's portion of the loan. The guaranty cannot cover the
non-veteran'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 down payment to cover risk on the
unguaranteed, non-veteran'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 non-veteran's income
adequate to cover the rest.
If a veteran dies before the loan is
paid off, will the VA guaranty pay off the balance of the
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.
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Q: My home was appraised by VA and now
I am having problems with its condition. Wasn't the appraisal an
inspection of the property and can't VA help me with these
A: Although the VA fee appraiser must
view the property from both the exterior and interior to
determine its overall condition, the appraisal process is not
intended to be an "inspection" of the property. While the
appraiser is an experienced observer, and is required to
recommend needed repairs based upon his or her observations
while completing the appraisal, the appraiser is not expected to
recommend cosmetic repairs, ensure that mechanical, electrical
and plumbing systems work properly, climb on the roof, etc. VA
cannot guarantee that all defective conditions will be seen by
the appraiser, or that the property will otherwise be
satisfactory to the buyer in all respects, and we have no
authority to assist veteran homeowners with the correction of
defects in existing homes. VA encourages homebuyers to satisfy
themselves that the home they intend to purchase is in a
condition that is acceptable to them.
Q: I purchased a newly constructed
home that was inspected by VA (or HUD/FHA,) during construction
and I have complaint items which the builder is not taking care
of. Is there anything VA can do to help me?.
A: If the new home was inspected by a
fee compliance inspector assigned by VA or HUD during
construction, VA has complaint processing procedures that are
used to attempt to get the builder to correct construction
defects which the VA determines are the builder's
responsibility. A complaint must be registered with VA within
the first year of ownership. Ultimately, VA does not have the
authority to force a builder to make corrections to a property.
Also, some problems about which a veteran complains may be
determined by VA to be within minimum standards of acceptable
building practice. In such cases, VA will not look to the
builder for correction. However, when builders refuse to correct
items which VA determines are their responsibility to correct,
VA will take administrative sanctions against them and refuse to
do further business with them. In the end, some veterans may
still need to look to the legal system to get acceptable redress
from the builder.
Q: My lender has increased my payments
into the escrow account for taxes and insurance. What can I
Q: The amount my lender is collecting for taxes and
insurance doesn't seem right. What can I do?
A: VA does NOT require lenders to
maintain escrow accounts. VA does require that lenders ensure
that the property is covered by sufficient hazard insurance at
all times and that property taxes are paid. Most lenders decide
to use escrow accounts to do this, but they are not required by
VA and VA has no standards governing them.
They are governed
by RESPA which is administered by the US Dept. of Housing and
Urban Development. For more information, see http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm
Q: Does having a VA loan limit a
veteran's right or ability to sell the property?
A: No. A veteran may sell the
property to a veteran or non-veteran at any time. However, if
the loan was closed after March 1, 1988, and it will be assumed,
the qualifications of the assumer must be reviewed and approved
by the lender or VA.
Q: When a veteran sells the property
to someone who will assume the existing VA loan, is the veteran
released automatically from personal liability for repayment of
A: No. If the loan was closed after
March 1, 1988, the lender or VA must be notified and requested
to approve the assumer and grant the veteran release from
liability. If the loan was closed prior to March 1, 1988, the
loan may be assumed without approval from VA or the lender.
However, the veteran is strongly encouraged to request a release
of liability from VA in order to avoid owing a debt to the
Government if the loan assumer (or a subsequent assumer) fails
to pay the loan.
Q: If a veteran obtains a release of
liability, is restoration of entitlement automatic?
A: No. The assumer must not only
qualify from a credit and income standpoint, but he or she must
have sufficient entitlement and agree to substitute it for that
used by the original veteran in obtaining the loan and meet
Q: If a veteran has trouble repaying
the loan, what should he or she do?
A: It is best to talk with the lender
as soon as possible to explain why the payments are late and
when and how those late payments will be made. If there was a
job loss, divorce, or other serious problem, and the regular
monthly payments cannot be made, then it may be best to sell the
home to avoid foreclosure. VA may be able to assist in arranging
a repayment plan or other alternative to foreclosure. VA offers
home loan counseling through 46 of its regional offices, and a
veteran can call the toll-free number (800-827-l000) for the
nearest office to request a call-back from a Loan Service
Q: What is VA refunding?
A: When VA refunds a loan, the loan
is purchased from the private lender. VA only refunds a loan
when the veteran has had problems making the payments due to
circumstances beyond his or her control, the problems have
improved so that payments can now be made or will be in the near
future, but the loan holder is not willing to wait before taking
action to terminate the loan. Refunding is rare because most
lenders prefer to work out the problems, if at all possible,
rather than selling the loan to VA and thereby giving up the
right to future income from that loan.
Q: How does a VA compromise claim
A: When a veteran attempts to sell
his or her home and the expected proceeds from the sale are not
enough to pay off the existing loan, and the veteran has no
other source of funds to complete the transaction, a VA
compromise claim pays the difference. As with any claim payment
by VA, the veteran usually remains liable to VA for the amount
of the claim payment. However, the compromise claim is usually
less than the claim which would have been payable if the sale
had fallen through, the veteran had failed to make the loan
payments, and the lender had foreclosed on the
Q: If a veteran dies before the loan
is paid off, will the VA guaranty pay off the balance of the
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