VA loans can provide significant benefits to active or retired service members and offer a more comprehensive set of advantages than conventional and FHA loans. The U.S. Department of Veterans Affairs allows those who qualify for a VA loan to achieve homeownership with greater flexibility. However, there are rules on who qualifies for a loan.
Who is Eligible?
If you are currently an active duty service member, you will need at least 90 consecutive days during wartime or 181 consecutive days during peacetime to become eligible for a VA loan. Veterans who have already served must have the same timeline to qualify. According to the US Department of Veterans Affairs, different service periods have different timelines for qualifying for VA loans.
If you are a member of the National Guard or reserves, the common eligibility time is around 6 years of service, except for those who had federal duty or a disability discharge.
You don’t just have to be a service member to qualify for a VA loan. If your spouse dies in service or because of a service-related disability, their surviving spouse may qualify if they remain unremarried. This policy allows those who are dealing with a very traumatic experience in their life to be able to have access to affordable housing.
Certificate of Eligibility (COE)
A Certificate of Eligibility (COE) is required to continue the VA loan process. The Department of Veterans Affairs issues COEs, which verify that the applicant has met their military service requirements.
These certificates are typically obtained electronically, and those who have a previous VA loan that required a COE can reuse it.
What About Credit and Income?
VA loans have very flexible credit requirements, with individual lenders setting minimum credit scores lower than those for typical FHA and conventional loans. As long as the buyer makes on-time payments and has a steady income, lenders can help them get a home, even with less-than-perfect credit.
People with VA loans must also have a certain level of residual income. Residual income is the money left over each month after all major expenses—such as mortgage, car payments, student loans, income taxes, HOA dues, and other obligations—are paid. Not having sufficient residual income for your family size can stall your VA loan process. If this is the case, you’ll either need to reduce your monthly expenses or find another home.
Occupancy
VA loans are for primary residences. A deployed servicemember’s spouse can satisfy the occupancy requirement.
If a veteran works overseas for part or even most of the year, the VA has granted some exceptions to allow for a US Home base, but those should be discussed with an expert VA loan officer. VA loans cannot be used to purchase second homes or investment properties.
Special Refinance Program
If you previously purchased a home with a VA loan, you may be eligible to refinance to lower your rate, whether you still occupy the home or not. The VA’s special refinance program, the Interest Rate Reduction Refinance Loan (IRRRL), allows you to refinance a VA loan to a lower rate without providing any income or asset documentation.
Conclusion
VA loans provide an incredibly advantageous option to those who have served our country, whether currently on duty, a veteran, or a surviving spouse.
Contact our VA loan specialist, Gilbert Bennett, today to obtain all the information you need.
Whether you are a first-time buyer or looking to refinance, My Easy Mortgage, a reputable mortgage broker located at 2405 Creel Ln STE 102, Wesley Chapel, FL 33544, and 16703 Early Riser Av,e Suite 266, Land O’Lakes, FL 34638, has a team of experienced professionals who can guide you through the process. Contact them at (813) 513-9846 to discuss your mortgage needs.
