There’s a lot that is less than fantastic about military life. Missed birthdays and anniversaries. Worry during deployments. Picking up and moving time and again. But there are also perks to military life. One of those perks is the VA Loan Benefit. What’s not to like about a 0% down loan with no mandatory private mortgage insurance (PMI) and often with lower rates than a conventional loan? If you are eligible for this benefit, it’s one you should take advantage of.
Keep in mind: While it’s called a VA Loan Benefit, the VA does not provide home loans. What the VA does is act as the security of the loan, meaning the VA guarantees to cover the bank’s losses if there’s a default on the mortgage. This is added peace of mind for lenders!
Do you qualify? Did you or your spouse serve on active duty during wartime for 90 consecutive days? Or serve on active duty during peacetime for 181 days? Or serve in the National Guard or Reserves for six years? Were you or your spouse discharged from the service under honorable conditions? Or are you the spouse of a service member who died in the line of duty or as a result of a service-related injury or disability? If you can respond with “yes” to one or more of these requirements, you should be eligible.
Prove you’re eligible. You’ll need to obtain a Certificate of Eligibility (COE) to establish that you are indeed eligible for a VA Loan. You can do this yourself by completing a Certificate of Eligibility Request Form (VA Form 261880). Sign onto ebenefits.va.gov with your CAC card (ID card) to complete this form. This part of the process will require you to create an eBenefits account if you don’t already have one, or to login with existing credentials. Once on the site, click on the link entitled “Certificate of Eligibility for a Home Loan” and follow the instructions. Make sure to print out at least two copies of the COE—one for your own records and one for your mortgage lender.
Any questions or technical issues? You can contact VA/DoD at 1-800-983-0937. You can also ask your lender for assistance with obtaining your COE.
Speaking of lenders… While most lenders can offer VA Loans, it is to your advantage to choose a lender who specializes in them. One of the advantages of working with a military-serving real estate agent is that he or she knows and works with lenders with experience and expertise navigating the VA Loan program. This means smoother sailing for you!
Get your other documentation in order. You’re no stranger to needing documentation. Here’s where you’ll want to ensure you’re tracking which documents you’ll need: A DD-214 will verify an honorable discharge. You will also need to demonstrate that you have steady income sufficient to cover your mortgage payment and monthly expenses, so you’ll want to make sure you have your pay stubs or other proof of income readily available. While individual lender requirements may vary, you will likely be asked to produce bank statements, tax returns, W-2s, and orders (if you’re PCSing). Your lender will communicate any additional documentation that is necessary.
Pro tip: Put this information aside before you’re packing up if you’re in the middle of a move.
Once you’ve obtained your Certificate of Eligibility, put together your documentation, and assembled your dream team—an agent who is a pro at working with military families and a lender who’s comfortable with VA Loans—you’re ready to move forward with your home purchase. And in the process, you’ll be able to reap the financial rewards of a hard-earned benefit.