VA Loan Eligibility and Requirements
You have served or are serving our country well, and this isn’t a job just anyone can do. For your service, the VA provides you several benefits when getting a home loan. To verify your service and prove your VA loan eligibility, a document called the Certificate of Eligibility (COE) is required. This is one of the most important documents needed in the process of taking out a VA loan. On the certificate, it will say how much the VA will back you, otherwise known as the entitlement. It will generally approve you to get a home loan up to $424,100 in most areas. Although this paper is 100 percent necessary, there are still many other documents and qualifications that go into being granted a VA loan.
Period of Service
When and how long you served is a big factor in determining whether you qualify for a VA Certificate of Eligibility. There are specifications for various periods in the past few decades. For most service periods, you must have actively served for at least 90 days to be considered eligible unless you were discharged earlier due to a service-related injury. Dishonorable discharges are generally not accepted.
Peacetime: Any non-wartime period before 1980 is considered “peacetime,” and you must have served actively for at least 180 continuous days for this to count.
Wartime: This is for 90-day service during the Vietnam War, the Korean War, and WWII.
After 1980 and 1981: If you were enlisted after 1980 or were an officer after 1981, you must have served actively for 24 months or at least 180 days if the full period you were required to serve for was less than 24 months.
Gulf War: For service after 1990, you must have completed active duty for at least 24 months or 90 days if the required period was less than 24 months.
Active Duty: If currently serving, you must have completed at least 180 days.
National Guard or the Reserves: 6 years is required. For the reserves and national guard, the requirements are a little different, and if you are included in this group but haven’t served for 6 years, you may still qualify. A VA lender can help you know one way or the other.
There may be a few more details included with each of these, but these are the general requirements.
Anyone whose spouse died while serving or from a service-related disability may be eligible. Talk to your lender if you fall into this category to see if you qualify. Or you can fill out VA form 26-1817 and mail it to the VA. (Note: this form cannot be filled out online by you.) Once they determine whether or not the spouse died due to a service-related disability (which may take a few months), they can approve eligibility.
Additional VA Loan Requirements
Getting your COE is just the first step in qualifying for a VA home loan. Once you have obtained it, you must meet many other requirements that prove you are financially responsible enough and ready to take on the huge responsibility that a mortgage is. The requirements for VA loans are significantly more flexible than those for just about any other loan program, but they also cannot be overlooked. Let’s take a look at some of these requirements:
Many VA lenders ask that borrowers have a credit score of 620 or higher. A 620 score typically falls into the “poor” category, so this is a generous requirement, especially when compared to conventional loans that require you to have a 740 or higher. If your score is below 620, it’s very important to work on building up your credit score as soon as possible as this will open many doors for you. Also, we at Low VA Rates do not have any minimum credit score requirements. In fact, we do loans for people with scores lower than 620 all the time. This doesn’t mean we don’t take your score into account or that every borrower to come through our doors will qualify for a VA loan. But if you’ve been turned down because of your credit before, then try prequalifying with us. You may be surprised by what we can offer.
The VA sets loan limits on specific areas of the United States. In most areas, the 2017 VA loan limit is $424,100, which is an increase from the $417,000 that it had been for a decade. For higher-prices areas of the U.S., the VA has set individual, higher limits. Understand that this limit is not a cap on how much you can borrower by any means. Any homes costing more than this limit simply must be funded with VA jumbo loans (which do require a down payment) rather than ordinary VA home loans.
The debt-to-income ratio, or DTI, indicates to the lender how much you pay into debts each month compared to your income. If your personal ratio is over 41 percent, you could be disqualified for a loan. The best way to ensure your DTI ratio is low is to pay off as much debt as you can.
Minimum Property Requirements (MPRs)
In order to ensure each veteran borrower is purchasing a house that will last them throughout their stay there or that will at least not cause them to make extensive renovations right off the bat, the VA has MPRs in place. These property requirements will check for things like adequate heating and cooling systems, a roof in a good condition, year-round access, and a sound structure. The VA appraiser will check for these items in the appraisal. Depending on the state of the house, it will either be approved or denied or repairs must be made by the seller.
In addition to the Certificate of Eligibility, you will need to provide a few additional documents, including those for proof of income, history of bankruptcy, recent bank statements, monthly debt, and W2 statements. These are not needed to apply for a loan, but they will be needed to complete the loan process. To get a full list of required documents, talk to your lender.
It is simple to get the VA loan process started. Prequalification takes no commitment, and with the necessary documents, pre approval can be a breeze. You can apply for a VA home loan with Low VA Rates by going to our website or calling us today at 866-569-8272. We will help you get your certificate and navigate the home loan process in a timely manner.
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