Can a Veteran Get a Loan From the Military

By Davina Price

The U.S. Department of Veteran Affairs, or VA, does not provide direct loans for the purchase of a home to veterans. The VA insures mortgages that allow lenders to ease credit and down payment requirements. As of February 2011, the VA insures 25 percent of a home loan over $144,000. VA insurance is only provided on loans that are within the loan limits determined for each county. These loan limits are determined on an annual basis. The most current loan limits can be found on the VA website (see Resources).

VA-insured loans help veteran home buyers purchase a home with little out-of-pocket costs. The home buyer must be able to qualify for a loan with a lender to take advantage of the VA home loan benefits. Veterans who have full entitlement and are approved for a mortgage within the VA loan limit do not have to make a down payment toward the purchase of the home. There are no insurance premiums for a VA loan.

Active duty military and veterans that served during WWII, Korean and Vietnam Wars and completed 90 days of active duty service are eligible to obtain a VA loan. Gulf War veterans must have completed 24 months of continuous active duty service. During times of peace prior to Sept. 7, 1980, the enlisted are required to have served 181 days of continuous active duty service. After that time period, 24 months of continuous service is required. Those who have a service-related disability and do not meet the time requirements may still be eligible for assistance. Veterans must have received an honorable discharge to qualify for a VA loan.

National Guard members are also eligible to apply for a VA loan. They must have served for six years, attended the weekend drills and the two-week training to meet the service time requirement. Also, National Guard members must have been honorably discharged, placed on a retirement list, or transferred to standby reserve. Surviving spouses of veterans who died while serving are eligible to apply for a VA loan as well.

Veterans must obtain a Certificate of Eligibility when applying for a VA loan. Active duty service members, veterans and National Guard members can obtain the certificate online, through a lender or by mail. They will need to provide proof of their active duty service dates to get the Certificate of Eligibility. Active duty service members will need to provide a current statement of service. Veterans and National Guard members will need to supply DD Form 214.

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