Your State VA Loans Eligibility Requirements
In addition to the basic service requirements listed below, to be eligible for the Your City, Your State VA Loan Program, the VA requires that borrowers have suitable credit, sufficient income, and a valid Certificate of Eligibility. The home must also be intended as a primary residence.
Basic Service Requirements
- At least 90 consecutive days on active duty during wartime
- At least 181 days of continuous active duty during peacetime
- Completed a total of 6 years in the Selected Reserves or National Guard
To qualify for a VA Loan in Your City you must apply for a Certificate of Eligibility (COE) by filling out a government form (VA Form 26-1880) which is a request for a certificate of eligibility for home loan benefits. Traditionally you present this form along with your military service documents to a VA center.
We can help you obtain your COE, as well as help you collect other documents required for the Your State VA Loan Program.
Purpose of VA Home Loans
The main purpose of the Your State VA Home Loan Program is to help veterans finance the purchase of homes with favorable loan terms and at an interest rate which is usually lower than the mortgage rates on other loan programs.
A Your State VA Loan can be used to
- Buy a home or condominium unit in a VA-approved project
- Build a home
- Purchase and improve a home
- Install energy-related improvements
- Buy a manufactured home or lot
Explanation of Service Requirements
Traditional qualifications for the program is for veterans that actively served in the Armed Forces after WWII and were discharged under terms other than dishonorable. During war time periods and active duty service, the applying veteran must have, at minimum, 90 days of service. If a veteran has only served during peacetime periods, the service requirement is 180 days of service. Again, this is true for active duty military persons as well. Enlisted veterans who served after 1980 and for officers after 1981 must have 2 years of service to be eligible.
Explanation of Loan Approval vs VA Eligibility
A VA Loan Approval requires a different set of qualifications compared to a Conventional or FHA Loan. You must have either sold your home and have paid the loan in full, or you can still own your home provided that the loan is paid in full. You may also have another veteran-transferee agree to assume your loan and transfer their entitlement to you.
Aside from VA eligibility requirements, there are also VA loan approval requirements. Becoming eligible for the VA home loan program does not always mean that you will be approved for the loan. The VA does not allow for any discrimination based on age, sex, color, race, or religion for loan approvals.
Since the VA is not the lender in the loan transaction, each lender may have their own set of criteria or qualifications needed for loan approval. Once you have your Certificate of Eligibility you would then need to find an approved purpose for the loan (condo, townhouse, and house) with the intent to occupy the property as your primary residence.
Credit requirements for VA loan approval also differs from Conventional or FHA loan requirements. FHA loans along with Conventional loans usually base approval for a program on your credit score. While the history on your credit report impacts your score, the approval for VA loans is not as score driven as the other options on the market. You need to have satisfactory credit with no late payments in the last 12 months. Any judgments, liens, or collections on your credit history within the last 12 months may negatively affect your chances of qualifying. Good payment history is key to a successful qualification.
Other Eligibility Beneficiaries
The other groups who may be eligible for VA home loan benefits include: unmarried spouses, U.S. citizens who served in the armed forces of a government allied with the United States during WWII. Additional eligible applicants include individuals with service as members in certain Government and Public Service Organizations such as Public Health Service officers, cadets at the United States Military, Air Force, Coast Guard Academy, midshipmen at the United States Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with World War II service, and others.
Restoration of Entitlement
Veterans can have their entitlement restored to purchase another home with a VA Loan if:
1. The property purchased with the prior VA loan has been sold and the loan is paid in full.
2. A qualified Veteran-transferee (buyer) agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the Veteran seller. The entitlement may also be restored one time only if the Veteran has repaid the prior VA loan in full, but has not disposed of the property purchased with the prior VA loan. Remaining entitlement and restoration of entitlement can be requested through the VA Eligibility Center by completing VA Form 26-1880.