Veterans, like most people dream of owning their own home.  But, the whole process of obtaining VA financing for a home seems quite complicated.

Veterans Entitlements and Your Dream Home

Veterans Need the Special Help that a VA Loan Provides

Beyond Military Service, There Comes a Time When a Soldier Wants Her Own Home

If you are a veteran of our military forces, you have probably been briefed on the fact that you are entitled to a number of benefits.  Palm State Mortgage can help you understand the process of one of those benefits, with VA financing your dream home.

Undoubtedly, you have been concerned about dealing with all of the details that are involved.  How do I get started?  What steps are involved and where do I start?

US Air Force Officer’s Quest for a VA Home

To guide you through the steps and the process, we’ll use the case of Major Jane Adams.  (of course, that isn’t her real name).  She recently left the Air Force, where she had a very special job.

She was an Air Force Pilot.  As a side note, 36 years ago, the first female Air Force pilots “took to the sky.  Major Adams was one of 723 female pilots in the Air Force.  

No longer a pilot, she wants her own home.  And she has spent weeks gathering a list of homes that she likes.  Finally, she found a house with a large yard and garage and fell in love with it.

The VA Loan Program

Jane knew there were several advantages in using her VA benefits to help with the home purchase.  After all, that is why the VA Program was established.

It is intended to help veterans who want to buy a home as their primary residence.  For purposes of a VA Loan, a home includes any “single family home and VA-approved dwelling.

This home might be a townhouse, condo, or mobile home.  It can be a house that is under construction or just planned for construction.  Existing homes, even if they need renovation are also eligible.

Advantages of the VA Loan

No Down Payment Relieves Financial Strain For Veterans and families

Enjoy the Advantage of No Down Payment

As mentioned above, there are several advantages in using a VA Loan instead of a Conventional Loan.

  1. The VA Loan doesn’t usually require a down payment.  Down payments on a conventional loan can vary from 5 to 30 percent.  That was a big plus for Jane.  Of course, she had some money saved.  But, setting up a new home is expensive.
  2. Some Closing Costs are eliminated or reduced because the government places a cap on certain cost.
  3. VA Loans are exempt from the PMI requirement.  (Private Mortgage Insurance)  Most Conventional Loans require the borrower to pay PMI.  This exemption is due to the fact that the US government backs your loan.  In other words, if you don’t pay, the government will.

This guaranty limit is usually about 25 % of the total loan amount. “The guaranty amount refers to the amount the VA will pay the lender in the case of default.” 

The net effect of not paying PMI is that you can build equity quicker or keep your house payments smaller.  As a result of this exemption, you don’t feel like your throwing hundreds or thousands of dollars away on insurance that protects the borrower, not you.

Veterans:  Are You Eligible for a VA Loan?

Veterans with Honorable Discharge and Service Time Qualify for VA Loans

Service Time and Honorable Discharge? You are Qualified For a VA Loan

“Current and former U.S. armed forces service personnel and veterans are typically eligible.”  Or you can qualify if have met certain service requirements with an honorable discharge.

Individuals who have discharges other than “honorable” may still be eligible for some benefits.  For further information on this topic, seek advice on this site.

Eligibility can be earned by serving in the Army, Navy, Air Force, Marine Corps, Coast Guard, Reserves or National Guard.

You are probably eligible if you’ve served at least:

  • 90 days during wartime.
  • 181 days during peacetime.
  • 2 Years if enlisted in the Post-Vietnam era.
  • 6 years in the National Guard or Reserves.
  • Un-remarried surviving spouses are also eligible.

Additionally, if you are applying for a VA loan, you must present or prove your eligibility with military documents.

First, this means you must acquire a Certificate of Eligibility and normally, this is not difficult.  But, certain documents have to be produced.

VA Loans Create Happy Environment for Families

Palm State Mortgage and VA Loans Make Happy Families

Major Adams was asked to produce was proof of her eligibility for a VA loan.  Of course, being recently released from service, she had copies of her DD214 and Military Orders releasing her from service.  With these two documents, the loan officers were easily able to secure the Certificate of Eligibility for her.

Both of the documents prove that she was released or discharged under “Honorable Conditions.”  This is a vital and a deciding factor in qualifying for the VA loan.  Special Note: If you have been out of the service and have lost the vital DD214 form, check out this VA site for assistance.

Please join us in our next blog.   Palm State Mortgage will follow Major Jane Adams through other pitfalls on the way to owning her dream home.