To qualify for a VA loan, you must identify as one or more of the following:
- An active service member
- A member of the National Guard or Reserves for more than 6 years
- A veteran who has served 90+ consecutive days of active service in wartime and 181+ consecutive days in peacetime
- A surviving spouse of a service member who has died either in the line of duty or as a result of a service-related injury
In addition to the above requirements, to qualify for a VA loan, you must be able to provide proper documentation, including W2 forms for the last two years, your last two pay stubs, documentation of assets such as bank accounts, and your DD Form 214 (Certificate of Release or Discharge from Active Duty).
Here are some of the VA loan program’s signature benefits:
- Zero Percent Down: Conventional loans require down payments of as much as 20%, which can make them unaffordable for many service members and veterans. Fortunately for those with full eligibility, VA loans are among the last remaining home loans available on the market that require no down payments.
- No Monthly Insurance Premiums (PMIs): Unlike other government-backed financing options, VA home loans don’t require borrowers to pay private monthly insurance. VA loans don’t require PMI because the federal government provides the backing and protection that’s usually covered by private monthly mortgage insurance payments. This helps to minimize monthly payments, which will save eligible borrowers thousands of dollars and help build more equity over the life of the mortgage.
- Lower Interest Rates: Mortgage interest rates are always dependent upon the relative amount of risk assumed by lenders in financing the loan. In carrying federal government backing, VA loans constitute much less risk on the part of the financial institutions acting as lenders. This allows these institutions to offer interest rates that are about 0.5 to 1 percent lower than the interest rates of conventional loans.