Am I Eligible for A VA Loan?
Veterans, active duty service members, persons of the National Guard, Reservists, and spouses of those who died in the line of duty can apply for a Veterans Affairs (VA) loan. However, not all who fall into these categories will be approved. To obtain a VA loan, applicants must meet specific basic requirements, as outlined by the Department of Veterans Affairs.
Eligibility Criteria for VA Loans
An individual may be eligible for a VA loan if they were not dishonorably discharged and meet at least one of the following criteria:
- IFThey served a minimum of 90 consecutive days in active service at a time of war
- ORThey served a minimum of 181 days of active service during a time of peace
- ORThey served a minimum of six years in the National Guard or Reserves
- ORThey are the spouse of a service member who either died in the line of duty or later on as a direct result of an injury incurred during their service
If someone fails to meet the above criteria, chances are they will be denied a VA loan. However, there are some exceptions. If you do not meet the items above but believe you should be given a VA loan, you should speak to one of our loan specialists to see if there is a way you can qualify.
Getting the Certificate of Eligibility
The first step in applying for a VA loan is completing the VA Loan Certificate of Eligibility, or COE. This form is designed to verify that the applicant’s service or that of the spouse meets the guidelines set out by the Department of Veterans Affairs. There are three ways to apply for the COE:
• Work with a lender approved by the Department of Veterans Affairs
• Submit an online application through the Department of Veterans Affairs eBenefits portal
• Print out the VA Form 26-1880 and mail it in
Out of these methods, working with an approved lender tends to get the best results as they have the experience needed to navigate the system properly.
Understanding VA Loan Income Requirements
The Department of Veterans Affairs does not have a minimum income requirement for VA loan borrowers. With that said, income is a requirement. To have their loan application approved, the person filing must be able to demonstrate stable, reliable income that is sufficient to cover their monthly expenses—which will be calculated to include the mortgage payment that will result from property obtained with the VA loan. The borrower must make enough to cover all of this and still have money left over each month.
As such, while the income requirements are not as strict as with other types of loans, they still exist, and not all applicants can meet them. However, the income requirements have resulted in VA home loans having the lowest foreclosure rate of any type of loan.
Other Eligibility Criteria
In addition to the guidelines established by the Department of Veterans Affairs, when obtaining a VA loan through a private lender, that lender has the right to demand borrowers meet other criteria. These can range from a maximum amount of debt to a specific minimum credit score. You will need to ask the lender exactly what requirements they have before you decide on how to move forward.
What to Expect When Applying for a VA Loan
The first step in the process is determining eligibility, either on your own to the best of your ability or with an approved lender. From there, you apply for your COE. If approved, you finalize the application and provide the needed documents to your lender of choice.
From the moment the borrower enters into a contract for a home, the VA loan process takes about 45 days. However, in some cases, it can wrap up faster, while in others, it may take much longer.
To learn more about the VA loan process, or determine your eligibility, speak with one of our VA loan specialists today.