The United States Department of Veterans has implemented VA loans for members of the United States Armed Forces, veterans, and their spouses. The purpose for VA loans is to offer its members an affordable mortgage loan program through the VA Loan Guarantee Program. The main advantage of VA Loan Programs is that no downpayment is required and its members can get 100% financing with no mortgage insurance premium required and no money out of pocket to make homeownership affordable to its members.
Mechanics Of VA Loans: VA Loan Guarantee Program
The United States Congress has created the VA Home Loan Guaranty Program more than 70 years ago to take care members of the United States Armed Forces and its Veterans. This program was created as part of the Servicemen’s Readjustment Act of 1944 and its main mission was to take care of our post war veterans. Veterans who served in our World Wars did not have credit so the VA Loan Program had lenient credit standards. VA Loans are very popular today with over 20 VA Loans closed since 1944.
Eligibility Requirements For VA Loans
To qualify for VA Loans, there are eligibility requirements which include income requirements, asset requirements, and credit requirements as well as minimum years of service. Years of service in the military depends on whether the veteran served during wartime or peacetime. Veterans who have served during World War II, Korean War, or Vietnam War, they qualify for VA benefits after 90 days of active duty with a discharge any other than a dishonorable discharge. For those veterans who have served in the military during peacetime from 1947 through 1981, to receive VA loan benefits, the veteran needs to prove that a minimum of 181 days of continuous active duty was served and any discharge other than a dishonorable discharge. For Veterans who have disabilities resulting from their active duty, disabled, the minimum mandatory 90 days to 181 days requirements are fully waived.
VA loan benefits are also extended to members of the National Guard as well as Reserves, NOAA members ( National Oceanic and Atmospheric Administration), Coast Guard, and public health service members.
Spouses of deceased veterans can be eligible for VA loan benefits.
Advantages Of VA Loans
VA loans require no downpayment on home purchase and there is no mortgage insurance premium required. There is a VA loan funding fee but that funding fee can be rolled into the balance of the VA loan. VA loans are assumable as long as the home buyer qualifies for a VA loan. The assumable aspect can be of major benefits if in the future mortgage rates do not remain at historical lows as it is today. It can be a great selling point.