1. VA Home Loan Eligibility

Am I eligible to apply for a VA Home Loan?

Many people simply want to know whether they are eligible to apply for a VA home loan under the VA eligibility guidelines.

Eligibility has to do mostly with duration of service. There are four important numbers to remember:

2 -- 6 -- 90 -- 181.

The "2" is for those honorably discharged veterans and active duty personnel who have served two years on active duty. The "6" is for those in the Reserve/National Guard who have served six years. The "90" is for those who have served 90 days of wartime duty called up under U.S.C. Title 10. And, finally the "181" stands for 181 days of peacetime duty called up under U.S.C. Title 10.

If you meet one of these criteria, you may be eligible for a VA mortgage.

Now, there are certain other VA-eligible borrowers who may not fit so neatly into these categories, for instance, POWs held in captivity for 90 days or more, and certain surviving spouses who have not remarried. If you're a surviving spouse, your military spouse must have died from a service-related injury or of a disability caused by a service-related injury.

If you have questions about your own VA loan eligibility, you can get answers directly from a VA home loan professional at 877-410-6663

Can I get a joint VA loan with someone?

On the topic of VA mortgage eligibility, many people wonder whether it's possible to get a joint VA loan with a non-military person. This is not a simple yes or no question as there are several scenarios that apply.

The first situation involves a legally married spouse of a veteran. Yes, the spouse can co-borrow on a VA home loan if occupying the home, and his or her income can be considered for qualifying purposes. 

The second concerns two members of the military. Whether married or unmarried, two military members can co-borrow on a VA loan if both will be occupying the home. Their entitlements are divided equally. 

The third scenario is when a military member brings an unrelated, non-military cosigner to the equation. In this case, the VA will only guarantee the veteran's interest in the property. Most lenders consider these partial-guaranty loans too risky. Therefore, joint loans with non-military members might best be made with an FHA loan for some similar federally-backed benefits like a low down payment and relaxed qualifying standards.

If you have any questions about getting a joint VA loan, you can get answers directly from a VA mortgage professional. 

Am I eligible for a VA loan as the spouse of a deceased veteran?

Let's clarify surviving spouse eligibility for VA home loans. A surviving spouse who has not remarried is eligible to apply for the VA Loan Guaranty Program. The VA is very specific in defining the word "surviving". A surviving spouse must be widowed by a veteran who died while in service or who died from a service-connected disability. 

In regards to POWs and MIAs, the VA has special rules for spouses. The spouse of a service person missing in action or of a prisoner of war is also eligible to apply for a VA mortgage.

Remember, it's surviving spouses, not children, who are eligible for the VA home loan benefit.

If you would like further clarification about whether you are eligible for a VA mortgage, you can get answers directly from a VA home loan professional. 

What types of homes are eligible for VA home loan financing?

Many types of homes are considered "financeable" under the VA Home Loan Guaranty Program. And, there are certain guidelines a property must meet before it can be financed with a VA mortgage. 

Previously owned and new construction single family homes are eligible. They just need to be in good "safe and livable" condition as determined by a VA-approved appraiser. 

Condominiums and townhomes are handled a little differently. Lenders have access to a list of condominiums and townhomes, planned unit developments, and builders that are VA-approved. Homes on the list qualify for VA financing. If the home you want is not on the list, you can fill out paperwork and submit it to the VA to see if it qualifies. 

Finally, some manufactured homes are also financeable. They need to be classified and taxed as real estate, must be affixed to a permanent foundation, and must conform to building codes and zoning requirements. Certain types of modular homes may also be eligible. 

Even though VA guidelines allow for financing on these types of properties, individual lenders may not offer VA loans on all of them.

A VA mortgage professional can help you understand the property eligibility guidelines in your area. 

VA Mortage Loan Benefits

 2. VA Home Loan Limits and Qualifying

What's the most I can borrow with a VA mortgage?

VA Mortgage amounts differ depending on a veteran's entitlement and ability to pay.

Let's talk about entitlement first. Entitlement is the amount the VA will guarantee, and is usually 25% of the loan. Each veteran has basic entitlement of $36,000. This is for a loan of up to $144,000. Nowadays, many home values exceed that amount and the VA is sensitive to the current cost of living. This is where bonus entitlement comes in to play. Bonus entitlement is $68,250. When added to basic entitlement, each eligible veteran has $104,250 worth of entitlement for loans over $144,000 and up to $417,000 -- even more in some U.S. counties where the cost of living is higher.

Ability to pay determines how much entitlement can be used. In order for a mortgage lender to determine how much to lend, it's necessary to first figure out what a borrower can afford to pay according to standards. Lenders will do a complete analysis of a borrower's debt-to-income ratio, residual income, and credit to determine ability to pay.

If you are looking to find out how much you could qualify for, you can get a quote directly from a VA loan professional. 

Can I get a jumbo VA loan?

Like all VA home loans, a jumbo VA loan is available only to veterans with enough income to handle the house payments. A VA jumbo loan is one over $417,000. There are two types of these loans: those in counties where the conforming loan limit is $417,000, and those in counties where the conforming loan limit is higher than $417,000. The first one requires a down payment, and the second typically does not. The Fannie Mae/Freddie Mac conforming loan limits are set for each U.S. county individually, and there are certain high-cost counties where the limits are higher than standard.

Your down payment for a jumbo loan is based on what the VA will guaranty, or in other words : entitlement. For instance, if you live in a county where the conforming loan limit is $417,000, but you want to borrow more than that, you can estimate the necessary down payment by using 25% of the loan's overage. Let's say you are buying a home for $600,000, and your county's conforming loan limit is $417,000. The difference is $183,000, and 25% of that is $45,750 -- which would be an estimate of your required down payment.

Certain higher cost counties have higher conforming loan limits well above $417,000. In these counties, the VA guaranty covers the loan up to the conforming loan limit.

Jumbo loans can vary from lender to lender.

To learn about your options for obtaining a VA mortgage for more than $417,000, talk to a VA loan professional.

What are the recent changes to VA limits and are they permanent?

Some people find it hard to keep up on VA mortgage limits because from time to time, the VA makes adjustments to the Program in response to circumstances dictated by the economy and other factors. In October 2008, the President signed the Veterans' Benefits Improvement Act of 2008. The law allows the limit on zero-money-down loans in qualified counties to increase up to $729,750 on VA loans closed through December 31, 2011. In fact, the VA sets maximum loan amounts each year for each county. So, depending on where a veteran lives, the amount of the VA guaranty on the loan can vary. In recent years, the loan limit for most counties has been set at $417,000, but higher in some counties where it costs more to live. A super maximum VA loan of $1,000,000 may also be available for qualified borrowers.

To find out about limits in your county, you can speak directly with a VA loan professional. 

What are the income requirements for VA home loans?

Income qualifying for a VA home loan is a topic that gets asked about often. Like all loans, VA mortgages have certain qualifying requirements. These are established by the VA. The established debt-to-income threshold for VA loans is 41%. Typically, if a veteran's monthly debt obligation is 41% or less of his income each month, then a lender can consider a VA home loan. Of course, there are other factors to consider like credit score and residual income. Residual income is what's left over after subtracting all of a borrower's foreseeable expenses from his or her monthly income. Often times, if there is enough residual income, debt-to-income can be higher than 41% for some borrowers.

It can be a good idea to go through the pre-qualifying process with your loan officer. This will give you a gauge on your debt-to-income ratio and the amount you can qualify for.

If you would like to do so, you can get pre-qualified in very little time by a VA loan professional. 

Why do the VA and my lender have different guidelines for VA loans?

It can be very confusing to borrowers when they discover that their lender's qualifying guidelines are different from the official VA home loan program guidelines published by the VA. Let's discuss why this can happen.

The Veteran's Benefits Administration under the U.S. Department of Veterans Affairs establishes guidelines for the VA Loan Guaranty Program, but they don't make the actual loans. Lenders such as banks, savings and loans, and mortgage companies put up the money for the loans. Many of these lenders have private investors who also set lending guidelines that may differ from those of the VA. So many lenders must follow both sets of guidelines to determine the terms of each loan. This is why you may, in some cases, find a lender's criteria to be more strict than what's outlined by the VA.

Speaking with a VA lender is the best way to find out if, and for how much, you can qualify.

Can I borrow more than the value of my home with a VA home loan?

Some borrowers wonder if it's possible to take out a VA mortgage for more than the value of the home.

A VA home loan can finance up to 100% of a new purchase. The VA will not guarantee borrowed funds that exceed the purchase price. A borrower looking to make immediate improvements on a property after purchasing can look in to obtaining a second mortgage or HELOC if the home appraises for more than the amount for which it was purchased.

VA guidelines allow a borrower to refinance for up to 100% of the home's value, as determined by an appraisal of the home's current value. This means that a borrower can take cash out, up to the value of the home.

On a VA streamline refinance, otherwise known as an IRRRL, a borrower can refinance the entire current mortgage into a new mortgage with a lower rate and/or lower payments. An appraisal hasn't typically been required for this type of refinance, so borrowers have been able to take advantage of lower rates even if they owed more than the home was worth. However, in a declining housing market, lenders may require an appraisal on this type of loan to ensure the home's worth is in line with what's being borrowed.

If you would like to look further into a VA purchase loan or a VA refinance, you can receive answers directly from a VA loan professional. 

 3. VA Current Mortgage Loan Rates