How to Convert Conventional Loans Into VA Loans

By Bethany Eanes

You can convert a conventional home loan to a VA home loan through the VA's refinance program. Any eligible member of the armed services or veteran in good standing is eligible for the VA home loan program; however, restrictions apply based on your credit and prior VA loan history. If you qualify, your home loan rates will get reduced and private mortgage insurance costs eliminated.

Submit VA Form 26-1880 to the address shown on the form. This will help determine your eligibility for a VA home loan. If you need a copy of the form, visit the VA home loan website (see Resources).

Obtain a VA certificate of eligibility. You will receive it after you have successfully applied on VA Form 26-1880. In addition to validating your military service, the VA will ensure you meet minimum credit and income requirements before issuing your certificate.

Contact your existing home lender to determine if you can directly refinance your loan. Participating VA lenders will have forms on hand so you can apply to add the VA home loan guarantee to your existing loan. If your lender is not approved, you will have to obtain forms directly from the VA to apply for the conversion.

Apply for the VA home loan refinance. You may choose to streamline the refinancing process, taking a new loan with the VA guarantee to lower your rate, or refinance a portion of your equity for cash back. This option is more restrictive.

Finalize your new loan. Anytime you modify the terms of a loan, you will need to obtain new loan documents. When you add a VA guarantee, you are significantly changing the form of your loan and will need to sign off on new interest rates and terms. This is particularly true if your conventional lender does not participate in the VA program and you need to move your loan to another lender.

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