Getting a VA Home Loan Step By Step

The process of getting a VA home loan doesn’t have to be complicated. Here is a step by step guide to getting your new home today.

Hi everyone, Anderson, SC Realtor Cody Garrett here. As veterans, we get some pretty awesome deals and benefits. One of the best benefits that we have access to is the VA home loan. In this article I’m going to explain the process of getting a VA home loan.

Benefits of a VA Loan

No down payment
private mortgage insurance premium not required
VA limits the amount you can be charged for closing costs
lender can’t charge early payoff fees
VA will work with you if you have difficulty with payments

Who is applicable

According to the official VA Home Loan website, the following veterans who served after 1980 are applicable if they served:

24 continuous months active duty with an other than honorable discharge.
181 days active duty and discharged for hardship, early out, convenience of the Government, reduction in force, condition interfered with duty or compensable service-connected disability
less than 181 days active duty and were discharged for a service connected disability

Active duty personnel are applicable after 90 days of service.

Some spouses may be eligible to receive VA home loans. For more information about spouses, click here to see the VA eligibility page.

What can you get with a VA home loan

VA home loans can be used to:

buy a VA-approved home or condo
build a home
purchase and improve a home
improve a home with energy efficient improvements

Obtaining a Certificate of Eligibility

The certificate of eligibility (COE, Form 26-1880) is what you need to prove to your lender that the VA is backing you. Some lenders can request the COE for you.

To apply for your COE, head over to the e-benefits page. You can also apply by mail by downloading and filling out this form.

Surviving spouses need to fill out do a different form.

In order to get your COE you need a few documents, including your DD-214. The list of documents needed for obtaining a COE can be found here.

Finding a home

This is the fun part. You can always find a home yourself, but I highly recommend finding a good realtor to help out. I suggest a realtor with Keller Williams. If you are purchasing a home around the South Carolina upstate, I would go with this guy.

Once you’ve found your home, a VA approved inspector has to come take a look at it to determine the home’s value and ensure it is safe, sound, and sanitary for you and your family. Check out this article from Military.com about the difference between VA home inspections and appraisals.

Want to build a home instead of buying one? Check out this very informative video on building a new home with your VA home loan.

Get approved for a loan

The actual money for the loan does not come from the VA. The loan comes from banks and mortgage companies. The VA Home Loan is a guarantee that the lender will be payed a portion of their money back in case of loss.

The VA guarantees this money so that you can be provided more favorable terms by the lender.

The basic entitlement for a VA loan is $36,000. This doesn’t mean you have to look for a mobile home. According to the VA website, lenders will generally loan up to 4 times a Veteran’s available entitlement without a down payment. In most states, veterans can borrow up to $417,000 without a down payment.

The maximum loan limit for a VA loan can be found here.

You normally do not have to make a down payment, but you will have to pay a “funding fee” for the loan. More information about that can be found here. Or you can watch this video from the VA about your funding fee.

If you need help comparing and shopping for a loan check out the links below:

Consumer Financial Protection Bureau’s huge guide on buying a home

A video from Military.com about approval