With Veterans benefits, you can become a homeowner. Through the home loan guaranty benefit, and other home programs Veterans, Servicemembers, and spouses can buy, build, improve, and refinance a home. The VA Home Loan program provides low-interest home loans through private lenders, like banks and mortgage companies.
Loans can be initiated directly through the VA — called VA direct, or else will be supported by the VA — called VA-backed. VA home loans work like this: By guaranteeing a portion of the loan for you, lenders offer terms that are better than what you would otherwise receive without the additional assurance.
In fact, nearly 90% of VA-backed home loans are made with no down payment. The most common home loans are called purchase loans.
To qualify for purchase loans, you’ll have to meet the credit and income level the lender requires. They may also require you to get an updated estimate on the value of your home before finalizing.
The first step in acquiring a VA home loan is to get a Certificate of Eligibility or COE. If you were honorably discharged and meet the minimum active-duty service requirements based on when you served, you or your spouse may qualify for a COE.
There are other specific types of home loans the VBA offers, too. One of these is Native American Direct Loan (NADL). Native American Veterans or a Veteran married to a Native American can buy, build, or improve a home on federal trust lands.
Another popular home loan through the VBA is the Interest Rate Reduction Refinance Loan (IRRRL). An IRRRL can help you decrease your monthly mortgage payments if you already have an existing VA home loan.
Finally, the VBA also offers cash-out refinance loans. These loans can put cash in your pocket out of your home equity.