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## VA Home Loans: Empowering Service Members to Homeownership
The **Department of Veterans Affairs (VA)** plays a pivotal role in assisting service members, Veterans, and eligible surviving spouses in achieving homeownership. Our commitment involves providing a **home loan guaranty benefit** alongside various housing-related programs designed to facilitate the purchase, construction, repair, retention, or adaptation of a home for personal occupancy. Private lenders, such as banks and mortgage companies, issue VA Home Loans. The VA then guarantees a segment of these loans, which enables lenders to offer more favorable terms to borrowers. For the purposes of VA housing loans, the term “Veteran” encompasses members of the **National Guard, the Reserves, active-duty service members**, and specific categories of spouses.
As a direct result of the **Blue Water Navy Vietnam Veterans Act of 2019**, which came into effect on **January 1, 2020**, several key changes to the VA Home Loan benefit were authorized for all eligible Veterans:
* **Purple Heart Recipients**: Active-duty service members who have earned a Purple Heart can have their **funding fee waived** if they finalize their home purchase while still on active duty.
* **Expanded Access with Conforming Loan Limits**: Veterans will find enhanced access to their no-down payment home loan benefit. Those seeking “jumbo” loans or residing in high-cost housing markets are no longer restricted by the Federally-established **conforming loan limit**. Starting January 1, 2020, Veterans can secure no-down payment VA-backed loans across all regions of the country, irrespective of home prices.
* **Native American Direct Loan (NADL) Enhancements**: The new legislation removes the previous $80,000 loan limit for Veterans utilizing their entitlement for a VA Native American Direct Loan to build or acquire a home on Federal trust land. This elimination of the loan limit significantly improves access to home loan benefits for Native American Veterans.
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### Eligibility for VA Home Loans
**Army Reserve** service members on active duty become eligible for VA Home Loans after **90 continuous days of service** following their Initial Active Duty Training. For more detailed information regarding time-in-service requirements, please refer to the VA Home Loans Eligibility page on the official VA website.
Even if you do not meet the standard minimum service requirements, you might still qualify if your discharge occurred due to one of the following reasons:
* Hardship
* The convenience of the government (requiring at least 20 months of a two-year enlistment)
* Early out (necessitating 21 months of a two-year enlistment)
* Reduction in force
* Certain medical conditions
* A **service-connected disability** (a disability directly linked to your military service)
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### Surviving Spouse Eligibility
You may be able to obtain a **Certificate of Eligibility (COE)** if you are the spouse of a Veteran, provided at least one of these conditions applies to the Veteran:
* The Veteran is missing in action.
* The Veteran is a **prisoner of war (POW)**.
* The Veteran died while in service or from a service-connected disability, and you did not remarry.
* The Veteran died while in service or from a service-connected disability, and you did not remarry before reaching 57 years of age or before December 16, 2003.
* The Veteran was totally disabled and subsequently passed away, even if their disability was not the direct cause of death (in specific scenarios).
**Important Note**: A surviving spouse who remarried before December 16, 2003, and on or after their 57th birthday, was required to apply no later than **December 15, 2004**, to establish home loan eligibility. Applications received after December 15, 2004, from surviving spouses who remarried before December 16, 2003, will be denied. Further details are available on the VA Home Loans Surviving Spouse page.
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### Key Highlights of the VA Home Loan Benefit
#### The VA Guaranteed Loan
VA-guaranteed loans are extended by private lenders to eligible Veterans for the acquisition of a home intended for their personal occupancy. A Veteran must apply for a loan through a VA-approved lender. If the lender determines the Veteran satisfies VA’s credit and income criteria, the loan is approved, and the VA then guarantees a portion of it to the lender. This guaranty protects the lender against potential loss up to the guaranteed amount, allowing the Veteran to secure favorable financing terms.
A Veteran’s **basic entitlement** stands at $36,000, with additional entitlement available for specific loans exceeding $144,000. While the VA does not impose a maximum loan amount, lenders typically only lend up to four times a Veteran’s available entitlement without a down payment, provided the Veteran meets income and credit qualifications and the property appraises for the asking price. The **maximum entitlement amount** is subject to annual changes and is currently **$144,000 for 2025**. Consequently, a qualifying Veteran can secure a loan up to $806,500 (or even higher in certain areas like Alaska, Hawaii, Guam, and the U.S. Virgin Islands) without needing a down payment. **NOTE**: For 2025, the VA guaranty limit (or maximum entitlement amount) aligns with the **Federal Housing Finance Agency limits**.
#### Benefits of a VA Guaranteed Home Loan:
* **Equal Opportunity**: Ensures all qualified Veterans have an equal chance to obtain a VA loan.
* **Reusable Benefit**: The loan benefit can be used multiple times.
* **No Down Payment**: Generally, no down payment is required, unless mandated by the lender or if the purchase price exceeds the reasonable value of the property.
* **No Mortgage Insurance**: Borrowers are exempt from paying mortgage insurance.
* **One-Time VA Funding Fee**: A single VA funding fee is charged, which can be included in the loan amount.
* **Funding Fee Exemption**: Veterans receiving VA disability compensation are exempt from paying the VA funding fee.
* **Limited Closing Costs**: The VA restricts certain closing costs that a Veteran is permitted to pay.
* **Assumable Loans**: Loans can be assumed by other qualified individuals.
* **Minimum Property Requirements**: Properties must meet minimum requirements to ensure they are safe, sanitary, and structurally sound.
* **Dedicated VA Support**: VA staff are committed to assisting Veterans who encounter difficulties with their loan payments.
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### Available Types of VA Home Loans
* **Purchase Loan**: These loans facilitate the purchase of a home at a competitive interest rate, frequently without requiring a down payment or private mortgage insurance.
* **Cash-Out Refinance Loan**: Allows you to extract cash from your home equity to address needs such as debt consolidation, educational funding, or home improvements.
* **Interest Rate Reduction Refinance Loan (IRRRL)**: Also known as the **Streamline Refinance Loan**, this option helps you secure a lower interest rate by refinancing your existing VA loan.
* **Native American Direct Loan (NADL) Program**: Supports eligible Native American Veterans in financing the purchase, construction, or improvement of homes on Federal Trust Land, or in lowering the interest rate on a VA loan.
* **Adapted Housing Grants**: Provides assistance to Veterans with a permanent and total service-connected disability for purchasing or constructing an adapted home, or for modifying an existing home to accommodate their disability.
* **Other Resources**: Many states offer supplementary resources to Veterans, including property tax reductions for certain Veterans.
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### Steps to Obtaining a VA Guaranteed Loan
1. **Obtain a Certificate of Eligibility (COE)**: The COE serves as verification to lending institutions that you meet the eligibility criteria for a VA loan. Learn more about the required documentation and the application process for a COE on the VA Home Loans Eligibility page.
2. **Find a Lender**: Locate a lending institution that participates in the VA program. It’s advisable to get “pre-qualified” at this stage, which means determining the maximum loan amount you can afford. Lenders independently establish their interest rates, discount points, and closing points, so comparing offers is recommended.
3. **Find a Home and Sign a Purchase Agreement**: Collaborate with a real estate professional and negotiate a purchase agreement. Ensure the purchase and sales agreement includes a **”VA Option Clause.”** You may also wish for the agreement to permit you to “escape” the contract without penalty if you are unable to secure a VA loan.
4. **Apply for Your VA Loan**: Work with your chosen lender to complete the loan application and gather all necessary documents, such as pay stubs and bank statements.
5. **Loan Processing**: The lender will order a VA appraisal and begin processing all credit and income information.
*(**Note**: The VA’s appraisal is not a home inspection or a guarantee of value. It simply provides an estimate of the market value on the date of the inspection. While the appraiser looks for obvious needed repairs, the VA does not guarantee the condition of the house. The appraiser, who is licensed, is not a VA employee. Lenders cannot request a specific appraiser; assignments are made on a rotating basis.)*
The lending institution then reviews the appraisal and all documentation pertaining to credit, income, and assets. Based on this review, the lender determines whether to grant the loan.
6. **Closing**: The lender selects a title company, an attorney, or one of their own representatives to oversee the closing. This individual will coordinate the date and time for the transfer of the property. Should you have any questions during the process that the lender cannot satisfactorily answer, please contact the VA at your **Regional Loan Center**.
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### Remaining and Restoration of Entitlement
#### Remaining Entitlement
Veterans who currently hold a VA home loan can request a COE to ascertain their eligibility to purchase another home using the VA home loan benefit. **Remaining entitlement** for those who have previously utilized their VA home loan benefit is calculated as 25% of the county loan limit, reduced by the amount of entitlement previously used and not restored. Similar to the initial use of a VA loan, Veterans are required to make this new home their primary residence when purchasing with remaining or restored entitlement. Examples illustrating how to calculate remaining entitlement are available [here](https://www.google.com/search?q=link_to_example_page).
#### Restoration of Entitlement
A previously-used entitlement can be restored to a Veteran for the purchase of another home with a VA Home Loan under specific conditions: if the property acquired with the prior VA loan has been sold and the loan fully repaid, or if a qualified Veteran buyer agrees to assume the VA loan and substitute their entitlement for the identical amount originally used by the Veteran seller. Additionally, entitlement may be restored **one time only** if the Veteran has fully repaid the previous VA loan but has not yet disposed of the property purchased with that loan. Requests for both remaining entitlement and restoration of entitlement can be submitted to the VA Eligibility Center by completing **VA Form 26-1880**.
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