If you are a veteran, active military member, or a spouse of a deceased veteran, you may be eligible to purchase a home or refinance with a VA loan. This loan program comes with many benefits over a conventional mortgage, and it’s designed to help those who have served our country achieve homeownership.

Let’s look at what a VA loan is and the benefits it offers to homebuyers and homeowners. 

What is a VA Loan?

A VA loan is a type of mortgage issued by private lenders and backed by the U.S. Department of Veterans Affairs. It’s a loan program that helps U.S. veterans, active duty service members, and widowed military spouses buy a home.

Introduced as part of the GI Bill in 1944, VA loans have become very popular due to its less stringent qualification standards. A VA loan can be used to purchase a home, build a new house, make home improvements, or refinance your current mortgage. In 2019, 624,000 VA loans were issued, and nearly half of those (45%) went to younger Millennial and Generation Z homebuyers.

What are the VA Loan Requirements?

To qualify for a VA loan, you must meet one of the following criteria:

  • You’re an active-duty U.S. military service member or an honorably discharged veteran. You can review the VA’s specified service requirements here.
  • You have served at least six years in the National Guard or the Selected Reserve.
  • You’re the spouse of a veteran who died in the line of duty.

When applying for a VA loan, you’ll need a Certificate of Eligibility (COE) to show lenders your proof of qualification. You can obtain a COE through the VA website, by mail, or through your lender. 

What are the Benefits of a VA Loan?

Here are some of the key benefits and features of a VA home loan: 

  1. No down payment is required. With a VA loan, you can buy a home by putting zero money down.
  2. There are no loan amount limits. There’s no cap on the amount you can borrow, but there a limit to the amount the VA guarantees. The standard VA loan limit is $548,250 for most U.S. counties in 2021, an increase from $510,400 in 2020. For more expensive housing markets in the continental U.S., VA loan limits reach up to $822,375 for 2021, up from $765,600 in 2020.
  3. This is no mortgage insurance requirement. As the government backs VA loans, borrowers do not need to pay for private mortgage insurance (PMI).
  4. There is no minimum credit score requirement.The VA itself doesn’t have a minimum credit score requirement. Still, lenders may set their own underwriting requirements, and many like to see a credit score of 620 or higher.
  5. There is no prepayment penalty. If you are able to pay off your VA loan early, you won’t be fined for doing so.
  6. You don’t need to be a first-time homebuyer. As long as you pay off your initial VA loan, you may get another one for buying your next home or refinancing your current VA loan.
  7. Bankruptcy and foreclosure won’t disqualify you. If you’ve filed for bankruptcy or have a foreclosure in your past, you may still qualify for a VA loan, as long as it’s been at least two years since the date of the bankruptcy or foreclosure.

Special Offers

Cross Timbers Mortgage is a certified veterans lending specialist. We also provide special offers to veterans in appreciation for their service, including up to $600 in closing credits applied towards your appraisal. Contact us today for more information and to get started on your VA loan.