Eligibility requirements for Veterans Administration loans remain unchanged from those enforced in 2015, according to the VA. VA-guaranteed home loans can be used to buy or build a home, improve a home, or buy a manufactured home or unit in a VA-approved condominium.
For 2016, the VA Loan Limits are the same as Federal Housing Finance Agency's limits, with the exception of counties where FHA limits were raised to match high home prices. (Search here by county.) The VA loan limit is the maximum amount a qualified Veteran can borrow without making a down payment.
Summary of VA Eligibility Requirements for 2016
There are three types of VA loans:
- Purchase Loans
- Rate Reduction Refinance Loans
- Cash-Out Refinance Loans
According to the VA, applicants must have "suitable credit, sufficient income, and a valid Certificate of Eligibility (COE)" to apply for home loan benefits. The basic entitlement for each veteran is set at $36,000, but qualified VA lenders will typically loan up to four times the entitlement cap to reach 100 percent financing without requiring a down payment (based on the VA guarantee).
Entitlements and eligibility are pegged to length of service. Most active military, veterans, National Guard and members reservists may apply, along with spouses of veterans who died on active duty or from complications from duty-related disabilities. Six months is the minimum requirement for personnel on active duty seeking VA loan benefits.
Veterans of conflicts prior to the Gulf War must have accrued 90 total days (WWII, Korea, Vietnam) or 181 continuous days for service between conflicts. Gulf War veterans must have 90 days of active service. For a complete eligibility breakdown, visit the U.S. Department of Veterans Affairs.
Benefits of VA loans
With a VA-guaranteed loan, home buyers make no down payments and pay no personal mortgage insurance (PMI). Applicants have flexibility in negotiating the interest rate on the VA mortgage as well as build the financing fee directly into the total amount of the loan.
Vets who want to pay off their mortgage early are not hit with prepayment penalties, either. LendingTree's VA Loan Calculator crunches the numbers to show VA applicants their monthly payments based on location, credit score and home price.
How to Apply
The first step involves obtaining a COE and pulling a credit report. You can get your free credit score at LendingTree. Round up all governmental documents in preparation for applying for a COE. The VA has a list of required forms, including DD Form 214, NGB Form 22, and other statements of service. Personnel can apply for their COE online or download the VA Form 16-1880 to submit by mail
Next, receive free offers from competing VA lenders based on today's rates. According to a 2012 Stanford University study, borrowers who receive multiple loan offers can save thousands on their mortgage.
A responsible word must be said about delinquency on a VA Loan. One benefit of working with the VA is that if a veteran or spouse has trouble making mortgage payments, there are a number of government-supported routes to effectively stave off foreclosure. Options include financial counseling and direct interventions with mortgage loan servicers.