A veteran family welcome their service member home to the house they were able to purchase after meeting all the qualifications for a VA loan.

VA Loan (Veterans Administration Loan) is a mortgage that the VA guarantees for veterans. Some of the basic qualifications for a VA loan include adequate income, decent credit, and a Certificate of Eligibility. VA loans have flexible underwriting and down payment guidelines for veterans and their spouses only. VA loans also have low-interest rates, no mortgage insurance, and no down payment requirements for most veterans. VA loans are only eligible for property that is used as a personal occupancy. As a general rule, VA loans are not for buying a second property.

WHAT CAN YOU DO WITH A VA LOAN?

  • Buy a home.
  • Buy a condo that is VA-approved.
  • Construct a new house.
  • Simultaneously purchase and upgrade a property.
  • Add energy-related upgrades to an existing property.
  • Purchase a manufactured home and/or lot.

 HOW TO GET A CERTIFICATE OF ELIGIBILITY

One of the essential required qualifications of a VA loan is the Certificate of Eligibility (COE). This official government document lets mortgage lenders know that you are eligible for a VA home loan. Military personnel can fill out a request for this document online through the Department of Veterans Affairs website.

WHO CAN GET A VA LOAN?

  • Active duty military members who have served for a minimum of 90 days continuously.
  • Veterans who have served a minimum of 90 consecutive days during wartime or 181 days during peacetime.
  • National Guard and Selected Reserve members with a minimum of 6 years of service
  • The only exception to this is veterans who served in the Gulf War for at least 90 days. 
  • In some instances, military spouses are eligible; the official guidelines state an “un-remarried spouse of a Veteran who died while in service or from a service-connected disability, or spouse of a Servicemember missing in action or a prisoner of war.”

RESIDUAL INCOME REQUIREMENT FOR VA LOANS

There are no specific income requirements for VA loans. However, borrowers applying for this program are expected to earn adequate income to pay their monthly loan payments. Lenders will review VA applicants’ income and debt situations to assess their ability to pay their loans and monthly expenses. 

There is, however, something called a “residual income” requirement for a VA loan. The Department of Veterans Affairs requires borrowers to have a certain sum of money left over each month, or residual income, after all monthly expenses and mortgage payments.

Residual income ensures that VA homeowners can pay their monthly housing expenses and still buy necessities. This financial safeguard is intended to protect military members and veterans who use VA loans to purchase a home. The requirements for residual income vary based on property location and family size.

CONTACT OUR TEAM TO LEARN MORE

This blog covers the very basics of VA loans and the requirements for veterans and service members. To learn more about how to qualify for a VA loan, you can visit the Veterans Affairs website or contact our team. Our Mortgage Analysts are experts at VA loans and are available 7 days a week for questions about applying and qualification requirements. Contact us by email at [email protected] or by phone at (855) 855-4491. 

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