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Va Loan Route To Homeownership For Vets

Sunday, December 8, 2013

Veterans Administration loans are not actually loans, they are really guarantees to lenders that the VA will protect the lender should the loan go into default due to lack of payments. The VA requires specific paperwork from the veteran and expects compliance from both lender and buyer in a number of areas.

Dates and Times of Service

Qualification for a VA loan requires some service accountability. Generally, any citizen who served in active duty since 9/15/40 can use the VA loan instrument. All must have served honorably (no dishonorably discharged vets are eligible). More specific time landmarks must be met: Minimum 181 continuing days of peacetime service. Minimum 90 continuing days during war. Other guidelines exist to encompass the variety of ways the VA recognizes honorable service. For instance, there are special programs for Reserve and National Guard service. If the vet enlisted after 9/8/80, or maybe went into service as an officer after 10/16/81, he or she would have to show proof if 24 months of continuous active duty.

Loan Route To Homeownership
The exception being if they were on active duty for 90 consecutive days in wartime or 181 consecutive days in peacetime.

Veterans Administration Keeps Loan Standards

As with any loan to finance property, VA loan users must meet some basic minimum benchmarks. Vets must meet basic creditworthiness tests. The final lending decision is up to the lender. The VA is just there in case of default or foreclosure. The requirements are not unreasonable:

Steady employment of at least two running years. Possibility of future employment (marketable skills). Good credit history and scores. Ability to pay in the face of the loan, insurance, family obligations. Debt to income ration below 41% inclusive of the loan. Holds an honorable discharge.

VA Loan Special Situations

The VA has attempted to address a number of situations to accommodate veterans, but there are some restrictions and guidelines. Here are a few:

No purchase of empty lots unless part of a construction loan. No commercial property unless it is 75% residential. No investment properties. Property must be occupied by the veteran or spouse. Joint ownership of properties is allowed, VA protects only a portion. Multiple veterans can enjoy multiple family property.

investment properties
VA Loan Property Stipulations

VA loans must meet minimum housing code benchmarks. The lender, the veteran, the VA all must endorse these. If a minimum housing code level cannot be reached, the VA loan could disappear. These code requirements can be tricky so it is important to study them before making a VA loan application for any particular property.

Other VA Requirements

Form 1003 (residential loan application) will be required. It is standard loan documentation. Vets will have to offer permission to run a credit check, prove employment, acknowledge standing debt. Discharge forms and a certificate of eligibility for a VA loan will be expected.

VA Loans Offers Benefits Beyond Conventional Loans

Handling a VA loan may seem complicated but it is far less so than regular loans. Vets interested in buying property should consult a competent lender with plenty of VA experience. A little assistance from the VA and a decent lender is what a vet deserves to claim his slice of the American Pie.

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