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Frequently Asked VA Home Loan Questions

How do I apply for a VA Home Loan?

You can apply for a VA home loan at any mortgage company that participates in the VA home loan program.  For example, if you are buying a home in Minnesota, Wisconsin, or South Dakota, you can call us at (651) 552-3681, or simply apply online.

Is VA financing easier, or more complicated than other loans?

No, not at all for you the home buyer. Years ago, VA financing was more complicated than conventional financing. However changes over the years have streamlined the VA home loan process to be very similar to any other loan. On the other hand, it is more complicated for the Loan Officer, so be sure you are only working with an experienced VA lender in your area.

How do I get a Certificate of Eligibility?

The easiest way is to simply let your VA lender obtain it for you. As a top VA lender in MN, SD, and WI, we can get it for you at application. No need to worry.
Otherwise, you can visit our web page on VA Certificate of
Eligibility by clicking here.

I have already received one VA home loan.  Can I use a VA loan to get another one?

Yes, depending on the circumstances.  If you have paid off your prior VA home loan and disposed of the property, you can have your entitlement restored for additional use.

My previous home loan was sold via assumption.  Why can't I get my entitlement restored to purchase a new home?

If you have a previous VA loan, and the new owner assumed your VA loan,, your entitlement can only be restored if the assumer is also an eligible veteran who is willing to substitute his or her entitlement for that of your original entitlement.  Otherwise you cannot have your entitlement restored until the assumer has paid off the VA home loan.

What can a veteran do who has lost his or her original discharge papers and does not have a legible copy?

The veteran should obtain a Certificate in Lieu of Lost or Destroyed Discharge. Any VA Veterans Benefits Counselor at the nearest VA office will assist a veteran in obtaining necessary proof of military service. Follow this link for more information on VA form DD214.  The DD Form 214 serves as your proof of military service. If you do not have your DD Form 214, you can request it from the National Personnel Records Center, using a Standard Form 180 (Request Pertaining to Military Records).  Visit this web site to obtain your form 180:

Does a veteran's home loan entitlement expire?

No. Your VA Home loan entitlement is generally good forever. However, the eligibility of service personnel is only available so long as they remain on active duty. If they are discharged or released from active duty before using their entitlement, a new determination of their eligibility must be made, based on the length of service and the type of discharge received. 

Does VA home loan entitlement provide cash to the veteran?

No. The amount of entitlement relates only to the amount VA will guarantee the lender against loss.

Can a veteran use their entitlement more than once?

If you have used all or part of your entitlement once, you can get that entitlement back to purchase again if the following conditions for "restoration" are met:

  • The property has been sold and the loan has been paid in full, or
  • A qualified veteran-transferee (buyer) must agree to assume the outstanding balance on the loan and agree to "substitute" his or her entitlement for the same amount of entitlement you originally used to get the loan. The buyer must also meet the occupancy and income and credit requirements of the law.
  • ONE TIME ONLY if you have repaid the prior VA home loan in full, but have not disposed of the property securing that loan, the entitlement you used in connection with that loan may be restored.

Restoration of entitlement is not automatic. You must apply for it by completing and returning VA Form 26-1880 to any VA regional office or center. Application forms for substitution of entitlement may he requested from the VA office that guaranteed the loan.

If the requirements for restoration cannot be met, is there any other way a veteran can obtain another VA home loan?

Yes. Veterans who had a VA home loan before may still have "remaining entitlement" to use for another VA home loan. The current maximum amount of entitlement available to each eligible veteran is $36,000 ($50,750) for certain loans over $144,000). This was much lower in years past and has been increased over time by changes in the law. For example, a veteran who obtained a $25,000 loan in 1974 would have used $12,500 guaranty entitlement, the maximum then available. Even if that loan is not paid off, the veteran could use the $23,500 difference between the $12,500 entitlement originally used and the current maximum of $36,000 to buy another home with VA financing.

Most lenders require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less. Thus, in the example, the veteran's $23,500 remaining entitlement would probably meet a lender's minimum guaranty requirement for a no down payment loan to buy a property valued at, and selling for, $94,000. The veteran could also combine a down payment with the remaining entitlement for a larger loan amount.

If both a husband and wife are VA eligible, may they acquire property jointly and so increase the amount which may be guaranteed?

They may acquire property jointly, but the amount of guaranty on the loan may no exceed the lesser of 40 percent of the loan amount or $36,000 ($50,750 for certain loans over $144,000).

Does my certificate of eligibility guarantee approval of a VA home loan?

No. The veteran must still be found to be qualified for the loan, just like anyone else. Lenders still review credit, income, assets, etc.

I see $36,000 on my VA Certificate of Eligibility. Is this the biggest loan a veteran can get?

No. This is just the maximum guarantee used for calculating your maximum loan amount. You may generally borrow up to the reasonable value of the property or the purchase price, whichever is less, plus the funding fee, if required. For certain refinancing loans, the maximum loan is limited to 90 percent of the value of the property, plus the funding fee, if required. To determine the reasonable value, VA requires an appraisal of the property.

What is the maximum VA home loan amount in MN, WI, or SD?

Although there is no maximum VA home loan (limited only by the reasonable value or the purchase price), you can only get zero down payment to the VA loan limit in your area. In almost the entire country, this is currently $417,000.

For VA loans over $417,000, a down payment is required. Generally it is about 25% of the different in the amount over $417,000.  So for easy math, assume you were buying a $517,000 home. The difference between $517,000 and the maximum zero down loan of $417,000 is $100,000.  Therefore you would need a down payment of about $25,000 to buy the example $517,000 home with a VA loan.

Is a VA loan guarantee loan a gift?

No. Your VA loan guaranty, which protects the lender against loss, encourages the lender to make a loan with terms favorable to the veteran. But if you fail to make the payments you agreed to make, you may lose your home through foreclosure, and you and your family would probably lose all the time and money you had invested in it.  If the lender does take a loss, VA must pay the guaranty amount to the lender, and the amount paid by VA must be repaid by you. If your loan closed on or after January 1, 1990, you will owe the Government in the event of a default only if there was fraud, misrepresentation, or bad faith on your part.

Can a veteran get a VA home loan to pay off an existing conventional or other mortgage loan?

Yes. The following refinancing loans are available under the VA home loan program:

a. To pay off the mortgage and/or other liens of record on the home. In most cases, the loan may not exceed 90 percent of the reasonable value of the property as determined by an appraisal, plus the funding fee, if required. The loan may include funds for any purpose which is acceptable to the lender, plus closing costs, including a reasonable number of discount points. A veteran must have available home loan entitlement. An existing loan on a manufactured home (except as noted below) may not be refinanced with a VA guaranteed loan.

b. To refinance an existing VA home loan to obtain a lower interest rate. Use of additional loan entitlement is not required. The loan amount is limited to the balance of the old loan plus the closing costs, discount points, funding fee, and up to $6,000 in energy efficient improvements. An existing VA home loan on a manufactured home may be refinanced to obtain a lower interest rate.

Can a veteran get a VA home loan to buy or construct a duplex?

Yes, but the total number of separate units cannot be more than four if one veteran is buying. If more than one veteran is buying, then one additional family unit may be added to the basic four for each veteran participating; thus, one veteran could buy four units; two veterans, six units; three veterans, seven units, etc.

In addition, if the veteran must depend on rental income from the property to qualify for the loan, the veteran must (a) show that he or she has the background or qualifications to be successful as a landlord, and (b) have enough cash reserves to make the loan payments for at least 6 months without help from the rental income.

Can a veteran obtain a VA home loan for the purchase of property in a foreign country?

No. The property must be located in the United States, its territories, or possessions. The latter consist of Puerto Rico, Guam, Virgin Islands, American Samoa and Northern Mariana Islands.

Ask a VA loan ExpertMay a veteran pay off a VA home loan before it becomes due?

Yes. A VA home loan may be partially or fully paid at any time without penalty. Partial payments may not be less than I monthly installment or $100, whichever is less. (Consult your lender.)

If a veteran dies before the loan is paid off, will the VA guaranty pay off the balance of the loan?

No. The surviving spouse or other co borrower must continue to make the payments. If there is no co borrower, the loan becomes the obligation of the veteran's estate. Protection against this may be obtained through mortgage life insurance, which must be purchased from private insurance sources

Can I take cash out on a VA IRRRL refinance?

No. A VA IRRRL loan, also known as a VA Streamline refinance, only allows you to refinance your existing loan.  You can not take any additional cash out.  You also can NOT combine any other existing loans, like Home Equity Loans, into the new VA Loan. 

You CAN take cash out with a standard VA loan refinance, which allows you to obtain up to 100% of today's appraised value of the home.
 

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