Are you looking to buy a new house and wonder if you qualify for a VA home loan? In this episode of Hella Smart, I’m going to walk you through the requirements to use your VA home loan benefit. I’ll also explain how you can take advantage of this amazing loan to get into the house you want.
Eligibility For The VA Home Loan
The VA home loan is one of the best tools for you to use as a current service member or veteran—but you have to qualify first. You’re probably wondering about a lot of things, like how do I know if I’m an eligible service member or veteran? Can my spouse help me qualify for a VA home loan? What kind of credit score or downpayment will I need? We’re going to break that down for you right now.
So how do you know if you’re eligible to use a VA home loan? You must be a current service member or veteran with enough service time. You also need an acceptable character of service to use the VA home loan benefit. If you served after August 2, 1990, then you’re probably in one of these groups to be eligible to use this benefit.
The groups include veterans and current members of the Selected Reserve or National Guard with at least six good years of service and enough points accumulated. It also includes your active duty with at least 90 days of continuous service or a select reservist who has been activated for at least 90 days. Current National Guard members who were activated under Title 10 or Title 32 orders and were activated for at least 90 total days, including 30 days of continuous service, also qualify.
Additionally, if you were discharged for a service-related disability or are the surviving spouse of a deceased service member or veteran, you may be eligible to use the VA home loan under some circumstances. Be sure to check with your home loan officer to help you research this, as you may still be eligible for a VA home loan if you’re not in one of these groups. If so, we would need to help you research that to find out.
Do You Qualify?
You can find out if you meet these requirements by ordering your VA certificate of eligibility or COE. This is the document that shows that you’re eligible to get a VA home loan. It also shows how much VA loan entitlement you have. Your entitlement determines your maximum loan size for a given county. You may be able to order a copy of your CSV from the VA website, or we can help you order a copy.
Another question you may have is if your spouse can help you financially qualify to use a VA home loan benefit. The answer is yes. Another eligible veteran or service member’s spouse can help you financially qualify to use this benefit. Also, a non-veteran or non-spouse can be a co-borrower with you on your VA home loan. This type of home loan is called a VA joint loan. It has additional requirements, and it does require a down payment to buy a home with this. We’ll talk about that in a future video.
Credit Scores And Down Payment
Another common question is, what kind of credit score and downpayment will you need to use a VA home loan? The minimum FICO score required by the VA to use this benefit is none. The Department of Veterans Affairs doesn’t set a minimum FICO credit score for them to insure a VA home loan. However, the money for these loans comes from private lenders who usually do have a minimum FICO credit score that they’ll work with. Be sure to check with your loan officer to find out what’s the lowest score that they’re able to work with, as this will affect your interest rate pricing.
Finally, the minimum downpayment needed to use a VA home loan is zero. This isn’t some kind of downpayment assistance or grant that you have to pay back later. Rather, this is a true no downpayment loan option that you earned with your service. While a bigger downpayment can save you money on total loan costs, eligible veterans and service members can use this as a true no-downpayment-required loan option.
What To Expect
Now we’ll look at an example of how you qualify for a VA home loan and what needs to be done next. After speaking with you and finding out your goals, we would help you order a copy of your VA certificate of eligibility or COE. Remember, this shows if you’re eligible to use a VA home loan and if you have enough entitlement for the VA home loan size that you need.
Next, we’ll put together a full loan package for you and your spouse. This means paperwork on your income and employment, credit report, financial assets, and other documents that might apply to you. We work with you to put together a great interest rate, closing costs, and loan program for your needs. My team uses this to put together a full loan pre-approval package so you can make a strong offer on the home you want to buy.
I hope this has helped you understand what requirements you need to meet to use your VA home loan benefit. If you’d like to learn more, make sure to reach out to me and I’ll show you how this all works. Don’t forget to also subscribe to my channel so you never miss an episode of Hella Smart!