One perk to military life is the VA Loan Benefit. What's not to like about a 0% down loan with no mandatory private mortgage insurance (PMI)? Bonus that they often offer lower rates than a conventional loan? If you are eligible for this benefit, it's one you should take advantage of.
The meaning behind the name: The VA does not provide home loans directly. The VA acts as the security of the loan. This means the VA guarantees to cover the bank's losses if there is a default on the loan. This is added security for lenders!
Do you qualify? Eligibility is based on service. Did you or your spouse served on active duty during wartime for 90 consecutive days? Or serve on active duty during peacetime for 181 days? Or serve in the National Guard or Reserves for six years? Were you or your spouse discharged from the service under honorable conditions? Or are you the spouse of a service member who died in the line of duty or as a result of a service-related injury or disability? If you can respond with "yes" to one or more of these requirements, you should be eligible.
Prove you're eligible. For the loan, you'll need to obtain a Certificate of Eligibility (COE). To do this, complete a Certificate of Eligibility Request Form (VA Form 261880). Sign onto ebenefits.va.gov with your CAC card (military ID card) to complete this form. This part of the process will require you to create an eBenefits account if you don't already have one, or to login with existing credentials. Once on the site, click on the link entitled "Certificate of Eligibility for a Home Loan" and follow the instructions. Make sure to print out at least two copies of the COE -- one for your own records and one for your mortgage lender. You can also request your COE by mail with VA Form 26--1880. If you apply for a mortgage through a VA approved vendor, you should also be able to get your COE.
Any questions or technical issues? You can contact VA/DoD at 1--800--983--0937. You can also ask your lender for assistance with obtaining your COE. Most COEs are sent electronically.
Find a Lender. Most lenders can offer VA Loans. However, it is to your advantage to choose a lender who specializes in them. If you are working with a real estate agent who works regularly with military families, he or she knows and works with lenders with experience and expertise navigating the VA Loan program. This means smoother sailing for you!
Get your other documentation in order. Get a binder, and gather up the gear. Buying a house is not unlike a move or deployment, it is best to keep everything all in one spot. You'll need: If you are still on active service, you will need a statement of service. A DD-214 will verify an honorable discharge. You will also need to demonstrate that you have steady income sufficient to cover your mortgage payment and monthly expenses, so you'll want to make sure you have your pay stubs or other proof of income readily available. While individual lender requirements may vary, you will likely be asked to produce bank statements, tax returns, W-2s, and orders (if you're PCSing). Your lender will communicate any additional documentation that is necessary.
Pro tip: Put this information aside before you're packing up if you're in the middle of a move.
Once you've obtained your Certificate of Eligibility, put together your documentation, and assembled your dream team -- an agent who is a pro at working with military families and a lender who's comfortable with VA Loans -- you're ready to move forward with your home purchase. And in the process, you'll be able to reap the financial rewards of a hard-earned benefit.
Find a VA Loan
If you're ready to move forward, or just want more information, the first step is to get no-obligation rate quotes.
This article originally appeared on the Millie Journal.