In order to be approved for a VA loan, you first must satisfy some application and eligibility requirements. These VA loan requirements protect veteran benefits from being falsely given to those who have never served or those who haven’t served sufficient time. For those of you who are applying for your very first VA loan, here is an in-depth look at what the application process will look like and what kinds of questions you’ll be asked to confirm your eligibility for VA entitlement.
What are the VA Loan Requirements?
On the VA home loan application, you’ll have to provide your personal information as well as information about your property, credit, income, and military service. Here’s what each of these sections entail:
Personal information includes your name, address, phone number, birth date, and social security number. You’ll also be asked to list your race or ethnicity (although you are not required to list this), and you’ll need to provide the loan officer with valid identification like your driver’s license. This is also the section in which you’ll list your dependents if you have any.
You’ll have to provide your loan officer with a purchase contract that both you and the house seller have signed. You’ll also need to get the house inspected and appraised and provide your homeowners insurance information (if applicable).
VA loans require no minimum credit score for approval. However, the better your credit score, the lower your interest rate will be. Your credit history will be examined by the lender and your insurance company. This report includes your payment history, records of bankruptcy or foreclosure, hard inquiries, judgments, liens, lines of credit, and whether or not you pay alimony or child care. Normally, VA loan lenders want you to have two lines of credit that have been open and active for at least two years.
Delinquent payments will hurt your credit history and your chances of being approved for a VA loan. The VA loan application will forgive one payment less than a year old and less than thirty days late, but it’s still a good idea to get current on your mortgage before applying, if you can. The VA will also require you to pay any collection fees on your credit report. You must also be current on all payments of federal debt, such as student loans. If you have a foreclosure on your record, you’re still eligible for a VA loan so long as you didn’t lose any security.
If you’re separated from the military, your VA loan application will include a copy of your DD214. You and your loan officer will also complete a request for a Certificate of Eligibility, which we’ll touch on later. If you’re still on active duty, your commanding officer will need to provide you with a statement of service. Active duty applications also need to provide the lender with a Leave and Earnings Statement (LES). If you’re due to become separated from the military in less than 12 months from your closing date, you need to provide documentation of income after that point. You can do this by providing a statement saying you plan to re-enlist or proof of civilian employment.
Income, Assets, and Employment
VA loan applications also ask for two years of employment history, including work addresses, employer phone numbers, and dates of employment. Next, you must provide proof of income, which you can do through W-2 forms, bank statements, or 30 days of paystubs. If you’re self-employed, you can provide proof of income through your tax returns. If you are the recipient of any retirement awards, social security, or pensions, you should list this as income as well, and you’ll need to provide 60 days of statements for proof. If you’re employed part-time, you can list the money earned as income so long as you’ve been earning it for two years or more.
Certificate of Eligibility
In the beginning of the loan application process, your loan officer will file a request for a Certificate of Eligibility (COE). Hang onto your copy of this certificate, as it will suffice for proof of VA entitlement in the future, if you wish to refinance, take out a second mortgage, or assume a VA mortgage.
Proof of Service Requirements
If you were discharged from the military, provide your lender with your Certificate of Release or Discharge from Active Duty. Normally, this document will have the information the lender needs. You can also show your lender your DD Form 214 if you were discharged/separated after January 1, 1950. If you served before then, just make sure your record of service shows the length of time for which you served and the character of your service.
If you’re applying while on active duty or while currently serving in the National Guard or Reserves, have your commanding officer send a statement of service to your lender. These statements of service must include the commanding officer’s name, your full name, your social security number, your entry date on active duty, and record of any lost time.
If you were recently discharged from the Army or Air National Guard, an NGB Form 22 will suffice for proof of service in addition to Reports of Separation, Records of Service, or your latest retirement points summary.
Basic VA Loan Eligibility Requirements
Generally speaking, to be eligible for VA home loan benefits, a veteran must have served on active duty in the Army, Navy, Marine Corps, Air Force, or Coast Guard at any point after September 15, 1940. You must also have been discharged under conditions other than dishonorable, and your discharge must have come after 90 days or more of service during wartime or 181 days or more during peacetime. 2 years of service (24 months) are required from veterans who began serving on or after September 7, 1980 or October 16, 1981 for officers.
The VA provides charts like this one to help you determine whether or not you served in wartime or peacetime:
|World War II: 9/16/1940 – 7/25/1947||Post-World War II: 7/26/1947 – 6/26/1950|
|Korean conflict: 6/27/1950 – 1/31/1955||Post-Korean conflict: 2/1/1955 – 8/4/1964|
|Vietnam era: 8/5/64 – 5/7/1975||Post-Vietnam: 5/8/1975 – 8/1/1990|
|Persian Gulf War: 8/2/1990 – date to be determined
If you’re currently serving in the National Guard or Reserves, you’ll need to have done so for a period of six years and been honorably discharged, be retired, or have been transferred to the Standby Reserve or Ready Reserve.
Spouses of Veterans and Other Qualifying Persons
Spouses of veterans may also qualify for VA entitlement. Here are the guidelines for spousal eligibility:
- Surviving spouses of veterans who were killed in action or whose death was the result of a service-related disability
- Surviving spouses of active duty veterans who remarry after the age of 57 and after December 16, 2003
- The spouse of a serviceman or woman who is listed MIA or as a POW (for at least 90 days) (This eligibility can only be used once.)
Other individuals who may be approved for a VA loan include:
- Members of the Public Health Service
- Service academy cadets
- Merchant seaman, if certain qualifications are met
Low Rates for Veterans
We at Low VA Rates are committed to helping qualified veterans take out home loans at very low rates. If you have questions about VA home loan requirements or want to get started on the home loan process, apply here or call us at 866-569-8272.