What are the requirements to be approved for a VA home loan? VA mortgages are offered to those with qualifying military service, and also to qualifying surviving spouses of those who have died as a result of military service.
VA Loan Eligibility Requirements
The most basic criteria for establishing your eligibility for a VA mortgage is your military service. The following requirements may apply depending on when you became a uniformed service member:
- You served 90 consecutive days of active service during wartime, OR
- You served 181 days of active service during peacetime, OR
- You served a minimum of six years of service in the Guard or Reserves, OR
- You are the spouse of a service member who died in the line of duty or as a result of a service-related disability.
There are other guidelines for those who joined prior to the first Gulf War, but in general most joining the military today will have to meet one of the above categories.
Others may be eligible for the VA loan program. In such cases, at least one of the following must be true. The applicant must be either:
- A U.S. citizen who served in the Armed Forces of a government allied with the United States in World War II, or
- Served as a member in certain organizations, like a:
- Public Health Service officer
- Cadet at the United States Military, Air Force, or Coast Guard Academy
- Midshipman at the United States Naval Academy
- Officer of the National Oceanic & Atmospheric Administration
- Merchant seaman during World War II
You may also qualify for VA mortgages if you don’t have the minimum qualifying military service and were discharged for reasons including (but not limited to):
- Hardship, or
- The convenience of the government (you must have served at least 20 months of a 2-year enlistment), or
- Early out (you must have served 21 months of a 2-year enlistment), or
- Reduction in force, or
- Certain medical conditions, or
- A service-connected disability (a disability related to your military service)
VA Loan Approval Requirements
Aside from qualifying military service, there are other criteria for VA home loans important to know before you apply.
Credit Scores And Credit History
VA mortgage loan rules in the VA lender’s handbook (VA pamphlet 26-7) indicate no FICO score requirements for VA mortgages and VA refinance loans.
That does not mean you have no credit score requirements to meet, but rather that your lender will set those standards. All applicants on a VA mortgage must financially qualify and generally speaking the credit shortcomings of a borrower on a VA mortgage cannot be offset by a co-borrower or co-signer.
Work History
VA loan rules require the borrower to have a minimum work history, generally two years in the job market though that does not have to be with the same employer. Your VA lender is required to make sure your qualifying income for VA mortgages is stable, reliable, and likely to continue into the next three years or so of your mortgage.
Those who are still serving are required to provide a statement from the applicant’s command support staff showing the servicemember’s remaining military commitment, eligibility for reenlistment, and that the member is in good standing.
VA Loan Requirements: The Certificate of Eligibility
When you have met the minimum service requirements to qualify for the VA home loan program, you will need to request a VA Certificate of Eligibility (VA COE) for the home loan program.
You can request this COE online using the VA eBenefits portal, requesting VA Form 26-1880, Request for a Certificate of Eligibility and mailing it to the VA, or you can get the help of a participating VA lender who can request the COE on your behalf.
Without the COE, your home loan process won’t be able to proceed past a certain point; your loan officer needs to see your COE, which includes information such as the amount of your VA loan entitlement available (new applicants will have 100% VA loan entitlement to use), whether you are exempt from paying the VA loan funding fee, and other information.
VA Home Loan Requirements: The Type Of Home You Want To Buy
VA mortgages may be used to purchase one-to-four unit properties including typical suburban homes, condo units, duplexes, town houses, farm residences (for the residential value of the property only), mobile homes, manufactured homes, and modular housing.
VA mortgages have an occupancy requirement which means at least one borrower (or a qualifying relative of the borrower such as a spouse or dependent) must occupy the home as the primary residence. Occupancy is a condition of loan approval.
What You Should Know About VA Home Loan Requirements
VA loans typically include a no-money-down mortgage loan option. This is a big benefit for most borrowers, but if you choose to make a down payment you could (depending on the size of the down payment) be eligible for a reduced VA loan funding fee.
Those who make down payments should know that your participating VA lender will have strict rules about the sourcing of your down payment funds. You will be required to provide sourcing for your down payment to insure it does not come from payday loans, credit card cash advances, or other non-collateralized loans.
Your seller is not permitted to assist with down payments, but may be able to contribute toward certain closing costs. Ask your loan officer about this option.
Finally, borrowers should never expect cash back at closing time on a new purchase VA mortgage unless that cash is a refund for something paid for up front but later included in the loan amount. Cash back at closing time is generally capped at a certain amount and any excess cash at closing time requires further scrutiny.