For military personnel, veterans, and their families who wish to buy a home, VA home loans are a fantastic alternative. There is no requirement for a down payment, there is no need for private mortgage insurance (PMI), and these loans have competitive interest rates because they are VA-guaranteed. However, there are some requirements that applicants must fulfill in order to be qualified for a VA home loan. The eligibility requirements for VA home loans in the US will be covered in this post.
Who is eligible for VA home loans?
The following individuals may be eligible for VA home loans:
- serving for at least 90 days in a row during a conflict or 181 days in peacetime while on active duty
- Members of the National Guard and Reserve who have served for at least six years or who have been called to active service for at least 90 straight days, as well as
- veterans who have been discharged with honor
- wives of military members who passed away in the line of duty or suffered a disability as a result of their service.
A Certificate of Eligibility (COE) from the VA is required of candidates in addition to meeting one of the aforementioned requirements. The COE verifies that the applicant is qualified for a VA home loan and specifies how much entitlement they have. The amount that the VA will guarantee in the event that the borrower defaults on the loan is referred to as entitlement.
How to obtain a Certificate of Eligibility
There are several ways to obtain a COE:
- Online: Applicants may submit an online COE application using the VA’s eBenefits portal. Applicants must register, fill out a brief form, and provide any necessary supporting files.
- Through a VA-approved lender: Some VA-approved lenders are capable of securing a COE on the borrower’s behalf.
- Via mail: Applicants can complete VA Form 26-1880 and mail it, along with any necessary supporting materials, to the relevant VA Regional Loan Center.
What are the credit score requirements for VA home loans?
For VA home loans, there is no minimum credit score requirement. Yet, each lender will have their own standards for credit scores. A credit score of 620 or better is generally desirable. Lower credit score borrowers could still be qualified for a VA home loan, but they might have to pay a higher interest rate.
What are the income requirements for VA home loans?
For VA home loans, there are no set minimum income criteria. Nonetheless, candidates must have a steady, dependable source of income that is adequate to pay their mortgage and other obligations. The debt-to-income ratio (DTI) of the applicant is often examined by lenders to evaluate loan eligibility. As a result, if you want to get a hold of a reputable company, you need to be able to get a hold of the aforementioned. A DTI of 41% or less is generally desirable.
What are the property requirements for VA home loans?
To be eligible for a VA home loan, the property must meet certain requirements:
- It has to be the borrower’s main home.
- It must be prepared for immediate occupancy.
- It needs to adhere to particular safety and soundness requirements.
- The United States or its territories. It must be located.
There are restrictions on the amount of entitlement that the VA will guarantee, but the VA does not set a maximum loan amount for VA home loans. The maximum entitlement amount in most of the nation is $144,000. However, the maximum entitlement amount may be higher in some high-cost areas.