Loans offered to members of the military and their families through the Department of Veterans Affairs can help those who have served and those who continue to do so. But, as with most things involving any level of investment, some rules and regulations must be followed.
At SeaWest, we know you have questions and we make it our priority to have answers. Keep reading for some answers to your VA loan FAQs to decide if this option is a good fit for you and your family.
What Are the VA Loan Requirements?
Requirements for any type of loan can be tricky – especially if those requirements can be changed or different depending on your circumstances. Let’s dive in to see what you need to be eligible for a VA loan.
Certificate of Eligibility
To apply for a VA home loan with a qualified lender, you’ll need a Certificate of Eligibility (COE). A COE is a document from the VA indicating that you meet the necessary VA eligibility requirements to obtain a VA loan.
A COE can usually be issued online. There are three main ways to establish eligibility:
- Applying through a VA-approved lender
- Applying online through the VA’s eBenefits portal
- Applying by mail with VA Form 26-1880
According to the VA, nearly all COE requests come electronically. Note that you do not need this document before starting the VA loan application process.
Length of Service
Of course, the primary eligibility requirement for a VA loan is your length of service or service commitment, duty status, and even character of service.
When you served will also play a factor in the active duty service requirements. The VA provides an extensive chart of service requirements dating back to WWII. If you are currently serving, the active-duty time requirement is 90 continuous days.
Note that there are exceptions to the minimum service requirements including your status upon discharge from active duty. For example, you may still be able to get a COE if you were discharged due to:
- The convenience of the government (minimum service of 20 months of a two-year enlistment)
- Early out (minimum service of 21 months of a two-year enlistment)
- Reduction in force
- Certain medical conditions
- A service-connected disability
It is more difficult to gain access to VA benefits if you received other than an honorable discharge, for example, a dishonorable discharge or discharge due to bad conduct. However, you can attempt to apply for a discharge upgrade.
While there are requirements set by the VA, there are also requirements set by the lender. These include credit score requirements, income, and debt-to-income ratio. We have tons of helpful information to get you through the lender requirements and home buying basics.
At SeaWest, we offer competitive home loans for veterans and service members. Because the work you do is so important and your time so valuable, we will even help you get your COE and complete your application.
What Are the Benefits of a VA Loan?
As a member of the Coast Guard or any other military branch, you have unique access to a home loan guarantee benefit that includes up to 100% financing. That is certainly a benefit! But there are more, such as:
- No downpayment required by VA (note that lenders may require a downpayment)
- Competitive, low interest rates
- Limited closing costs
- No need for Private Mortgage Insurance (PMI)
The VA home loan is also a lifetime benefit, meaning you can use it multiple times, which takes us to our next question.
Can I Get a VA Home Loan More Than Once?
Yes! There is no maximum or limit on how many times you can use a VA loan. But there are requirements. Specifically, you need the remaining entitlement.
VA entitlement is a dollar amount the VA promises to repay a lender if you default on the loan. There are typically two levels of entitlement: basic and bonus. When you use a VA home loan, you can apply some or all of your entitlement to the loan.
Entitlement can be a bit complicated. Think of it as a rescue boat of resources. How you dole it out depends on you.
- If you want more than one house, you can only bail out some of the VA entitlement so you can use it for more than one property.
- You can also restore your full entitlement by repaying the loan in full or selling the home and purchasing a new one.
- Or you can use some of your entitlement to turn one property into a rental property.
Can a Surviving Spouse Get a VA Loan?
Unfortunately, in your line of work, there are inherent risks. A surviving spouse can get a VA-backed home loan but a COE will once again be required.
A surviving spouse of a veteran can get a COE if at least one of the following is true:
- The veteran is missing in action.
- The veteran is a prisoner of war.
- The veteran died while in service or from a service-connected disability and you didn’t remarry before you were 57 years old or before December 16, 2003.
There are many more steps for getting a VA loan as a surviving spouse, including various forms and applications. Be sure you are educated on the regulations before beginning the process.
Are VA Loans Assumable?
VA loans are assumable. This means that a borrower can take over the terms of an existing VA loan even without meeting the requirements to take out a VA loan for themselves.
As a borrower assuming a VA loan, the process will be different. You will be working with the seller’s lender to prove that you can assume the loan and its benefits.
Can Military Children Get a VA Loan?
This is a very common question. Of course, you care about your family and want to ensure your children have access to the very best – even if they choose a career outside of the military!
Unfortunately, the short answer is no. VA loan benefits are not transferable to children (though they may be assumable as stated above). But other perks may be available to your children.
As a member of the military or veteran, you can apply for a home loan with non-veterans who are not your spouse but the VA only guarantees the veteran’s portion of the loan. So if you want to help out your children by cosigning a loan, your children will not have access to the no downpayment option nor are they protected by VA policies.
The Final VA Loan FAQ: How Do I Apply?
You’ve read all about VA loans and decided you’re ready to take the plunge! Where do you start?
You start the same way everyone starts: finding a lender. SeaWest is well-versed in all things Coast Guard, including home loans and mortgages. We can assist you with a VA loan and get you into the house of your dreams.
We will treat you with the respect you deserve because we know your time is important and, when you get a much-needed break from service, you deserve a place you can call home.
Find out how SeaWest can help navigate your home-buying journey by clicking below.
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