VA Loan Eligibility
Almost 30 million veterans and service personnel are eligible for VA financing. Even though many of that 30 million have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.
- Veterans with active duty service, that was not dishonorable, during World War II and later periods are eligible for VA loan benefits.
- World War II (September 16, 1940 to July 25, 1947)
- Korean conflict (June 27, 1950 to January 31, 1955)
- Vietnam era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days’ service.
- Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days’ active service.
- Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years.
- Persian Gulf Conflict—Generally, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged are eligible.
- Selective Reserve—Members of the Selected Reserve, including National Guard, who are not otherwise eligible and who have completed 6 years of service and have been honorably discharged or have completed 6 years of service and are still serving may be eligible. Expanded eligibility for Reserves and National Guard individuals will expire October 28, 1999. Contact the local VA office to find out what is needed to establish eligibility. Reservists will pay a slightly higher funding fee than regular veterans.
Financing – a good deal for veterans
Before arranging for a new mortgage to finance a home purchase, veterans should consider some of the advantages of VA home loans:
- Most important consideration, no down payment is required in most cases.
- Qualified veterans and active duty military can obtain a loan of up to $417,000, or $625,500 in high-cost areas, with no money down.
- No monthly mortgage insurance premium to pay.
- Limitation on buyer’s closing costs.
- Thirty year loans with a choice of repayment plans:
- Traditional fixed payment (constant principal and interest; increases or decreases may be expected in property taxes and homeowner’s insurance coverage);
- Adjustable Rate Mortgage-ARM (lower initial interest rate may allow qualification for a higher loan amount. Annual interest rate adjustments are limited to 1 percent and maximum increase in the interest rate over the life of the loan is capped at 5 percent).
- Graduated Payment Mortgage-GPM (low initial payments which gradually rise to a level payment starting in the sixth year)
- For most loans for new houses, construction is inspected at appropriate stages to ensure compliance with the approved plans, and a 1-year warranty is required from the builder that the house is built in conformity with the approval plans and specifications. In those cases where the builder provides an acceptable 10-year warranty plan, only a final inspection may be required.
- An assumable mortgage, subject to VA approval of the assumer’s credit.
- No early prepayment penalty.
Had a VA loan before?
Veterans who have already taken out a VA home loan in the past may be eligible for remaining entitlement for any unused previous balance. Because entitlement amounts have increased over time, many people with prior VA loans may be eligible for more money now than they were previously. Complete our form or call us today to find out if you qualify.
Restoration of Entitlement
Veterans can have previously-used entitlement “restored” to purchase another home with a VA loan if:
- The property purchased with the prior VA loan has been sold and the loan paid in full, or
- A qualified veteran-transferee (buyer) agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller. Remaining entitlement and restoration of entitlement can be requested.
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In the News
There is a slight increase in the VA loan limit for 2011 on purchase transactions to 100% for King, Pierce and Snohomish counties.
- 2010 = $481,250.00
- 2011 = $500,000.00
New higher limits apply to loans closed Jan 1,2011 – September 30, 2011. Kitsap Co. limit remains at $ 417,000.00