Question:

What should I know about Veteran Administration (VA) requirements for home loan approval?

Answer:

The Veteran Administration (VA) requirements for home loan approval are actually requirements set by the VA lender. The VA does not lend money itself; it only guarantees repayment of up to 25% of the eligible VA loan amount to the lender, should the veteran homeowner defaults.

On the whole, lenders have to comply with Veteran Administration (VA) income and credit requirements for loan approval but compliance with those doesn't guarantee that you will be approved by the lender.

Basic Veteran Administration (VA) Requirements for Home Loan Approval

To be eligible for a VA loan, you must hold a Certificate of Eligibility. Your lender may be capable of providing you with one. If they are not, you could submit a completed VA Form 26-1880, Request For A Certificate of Eligibility, to the Winston-Salem Eligibility Center, along with proof of military service.

Basic Steps for VA Home Loan Approval and Home Purchase

First, you are advised to use homeownership counseling. Schedule an appointment with a HUD-approved counselor in person or by phone. A home counseling session will provide information on obtaining a house and debt and finances management.

Afterwards, select a house and sign a Purchase Agreement to be executed upon obtaining a VA home loan. The lender will examine your income and credit, and house appraisal will be ordered.

After you are approved, if credit and income are acceptable, at closing you sign the VA mortgage papers and your Certificate of Eligibility will be marked to show use of entitlement.

Some Facts about VA Mortgage Loans

VA funded home purchase can take place only within US territories and possessions.

If you are not married, you cannot purchase a home with a VA loan, as it is explicitly required to be owner or spouse-occupied. Other relatives cannot fulfill the particular personal occupancy requirement.

If you had bankruptcy during the last 12 months prior to making a VA loan application, you will not be considered acceptable risk.

There is a VA funding fee required for almost all VA loan applicants. For second-time VA loan borrowers the funding fee will be higher.

Mortgage life insurance is recommended to be purchased to protect veteran spouse or co-borrower in case of the veteran's death.

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