Veterans Eligibility Requirements and Advantages of VA Loans – Local Records Office

PEKIN, IL – The U.S. Department of Veterans Affairs (VA) is a program to help to return service members purchase homes with no down payment or credit. ‘Local Records Office’ says, This benefit program also helps active duty military members and families purchase homes and even refinance their mortgage. VA mortgages also have more lenient loan requirements and their insurance requirements are waived. The VA program is very beneficial when our service men and women are purchasing the home of their dreams.

To be eligible for a VA loan

Veterans, active duty service members, National Guard members, and reservists need to meet basic requirements, and it is ultimately up to the VA to determine eligibility. In any case, prospective buyers can have a better idea by looking at the VA’s basic eligibility guidelines. You must meet one or more of the following requirements:

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

VA loan income prerequisites and additional eligibility requirements

Homebuyers must have a stable, reliable income to cover monthly expenses, including their mortgage payment. Additionally, the VA requires borrowers to maintain a certain level of income over each month after major expenses are paid. This excess remaining is meant to pay for family needs, ie. food, transportation, and is also referred as residual income. Residual income in the VA keeps one of the lowest foreclosure rates in all lending options.

The VA also increases chances of borrowers earning a sufficient amount of income and meets all financial obligations, as well as ensures that borrowers have a cushion in an emergency situation.

The private lenders who finance the home purchases also have criteria the potential borrower must follow, including debt, income and credit requirements.

After you apply, the Veterans United will pull up the three leading credit agencies, and examine your debt-to-income ratio.

However, a veteran applying for a VA loan that has been discharged under dishonorable conditions is not applicable.

Apply for VA Loan Certificate Eligibility (COE)

You do not need a VA Loan Certificate of Eligibility to get started in the loan process with Veterans United, though this certificate is very handy and an important part of your loan application. COE verifies your eligibility to ensure the length and character of your service are in tack to apply for the VA home loan benefit.

Here are four basic steps to get you on board with applying for a VA loan:

  1. Get familiar with the eligibility requirements listed above
  2. Contact a VA approved lender and start your VA Loan application. You can also apply online through VA’s eBenefits portal or apply by mail with the VA Form 26-1880
  3. Obtain a Certificate of Eligibility through your lender or independently
  4. Finalize the loan application by providing the necessary paperwork to your lender including W-2s, tax returns and your most recent bank statements

Check your eligibility to meet for a VA Home Loan here, by speaking to a VA Loan Specialist at

This process takes minutes to complete when you have proof of your military service and ensures that your home financing with move forward without any delays.

You can use VA loans to:

  • Buy a home, a condominium unit in a VA-approved project
  • Build a home
  • Simultaneously purchase and improve a home
  • Improve a home by installing energy-related installments or energy-efficient improvements
  • Buy a manufactured home and/ lot
  • Refinance an existing VA-guaranteed or direct loan for a lower interest rate
  • Refinance an existing mortgage loan or other indebtedness that is secured by a lien of record on a residence owned and occupied by the veteran

The benefits of a VA loan

  1. No down payment

The down payment is the biggest obstacle to buying a home. But beware of the “no money down” aspect of a VA loan should not be confused with “no money out of pocket,” which is a common misconception, notes Michael Garcia, broker, and owner of TQS Realty in Palm Beach, FL says the Local Records Office.

A VA loan will still require closing costs and the negotiated earnest money deposit to “hold” the house.

“However, that money will often come back at the closing, when the title company will write a check back to the veteran on the spot for the total amount that was put into escrow,” the Local Records Office says.

  1. More lenient requirements to obtain a loan

A credit score for a VA loan can be lower than a conventional loan -620 for a VA loan compared to 650-700 for most conventional loans.

The required debt-to-income ratio at often times is more flexible than conventional mortgages.

  1. Waives Private Mortgage Insurance (PMI) requirement

The conventional buyers have to pay Private Mortgage Insurance (PMI) when they put less than 20% down. Private Mortgage Insurance (PMI) protects lenders when in case a borrower goes into default. This saves big on monthly payments, since PMI runs to about $200 per month, explains the Local Records Office.

There is still a “funding fee”- an upfront cost applied to every purchase loan or refinance. And the proceeds help VA cover losses on the few loans that go into default expresses the Local Records Office.

In any case, it helps you build more equity in your house, and helps you save thousands during the life of your mortgage.

  1. Closing costs are limited

The closing costs veterans are allowed to pay for, (legally) include the following:

  • Credit Report
  • Appraisal
  • Origination fee
  • Recording fee
  • Survey
  • Title Insurance

The VA also has fees the veterans are not allowed to pay. The lenders are also not allowed to charge more than 1% to cover costs of originating and underwriting the loan.

  1. Assistance with appraisals

When a veteran is considering of purchasing a home, but having trouble reaching the purchase price during the appraisal, buyers, and lenders can ask the VA appraisal to consider adjusting the valuation before reaching a final decision.

The appraisers notify lenders in the event the appraised value is likely to be low, giving buyers and realtors 48 hours to give additional information to help justify the home’s value that the appraiser was not aware of. For an example, upgrades and improvements the seller performed in the last three years that was not included in the home value.

It is an extra assistance to help our service men and women purchase a home.

Additional benefits of a VA loan

Basic Allowance for Housing (BAH) is a powerful benefit that means you can use BAH to pay for some or all of your monthly mortgage costs.

Your BAH varies based on your pay grade, your geographic location, and a number of dependents.

No Pre-Payment Penalties, paying off a loan before it matures, allows for borrowers to consider for future home purchases and refinancing options.