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Buying a House

Understanding VA Loans

Banks and other private mortgage companies make a special type of home loan to veterans of the US Armed Services. A portion of each loan is guaranteed by the Veterans Administration (VA), and protects the lender's investment if the borrower defaults.

What Are the Benefits of a VA Loan?

What Are the Negatives of a VA Loan?

The Veterans Administration Web site is an excellent resource for detailed information about VA guaranteed home loans. If you cannot find the answers to all of your questions there, be sure to contact your local or regional VA office

VA Home Loan Lingo

An entitlement is not a cash payment to you or to the bank. It is the amount the VA promises will be paid to the lender if you default on your loan. Should that happen, the VA may pursue you to recover those funds.

Who Is Eligible for a VA Loan?

Wartime/Conflict Veterans who were not dishonorably discharged, and served at least 90 days:

World War II

Korean Conflict

Vietnam Era

Persian Gulf War

Afghanistan and Iraq

Peacetime Service
Peacetime service of at least 181 days of continuous active duty with no dishonorable discharge. If you were discharged earlier due to a service-connected disability, you should speak with the regional VA office to verify eligibility.

Reserves and National Guard
Members who have completed six years of service and have been honorably discharged (or are still serving) may be eligible for a VA loan. Contact your regional VA office for more details.

Other Qualifying Service
Other types of service that may make you eligible for a VA loan:

Anyone with questions about eligibility should speak with their regional VA office.

What is a Certificate of Eligibility?
It is a document issued by the VA that lets lenders know you are eligible to apply for a VA loan. The certificate does not guarantee the bank will approve your credit application.

What Type of Home Can I Buy with a VA Loan?
A VA home loan must be used to finance your personal residence within the United States or its territories, but you have many choices regarding the type of home you purchase.

What's the Maximum Amount I Can Borrow?
There is no set maximum for a VA loan, but lenders usually limit it to an amount that can be sold on the secondary market.

What is a Funding Fee?
A fee of two percent of the loan amount (2.75 percent for Reservists) is payable when the VA loan closes your loan, and can be included in the loan. The fee is reduced if the veteran makes a downpayment of at least 5 percent.

Can I Get a Second VA Loan?
Yes. If your previous loan was made under previous entitlement guidelines, you may be eligible for an additional amount based on today's increased figures, even if the loan has not been paid in full.

Or, your entire entitlement may be restored to purchase another home:

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