How to Get a Veterans Administration House Loan

By Olivia Savoie

Military veterans can take advantage of home-loan programs that allow them to finance a house through a traditional lender with no money down. The U.S government backs the loan and offers a guarantee of payment to the lender if the veteran defaults on the mortgage. This opens the door to home ownership for those who may not qualify for a home loan on their own. As of December 2010, the Veterans' Administration (VA) allows service members to borrow up to 102.15 percent of the house's value to cover closing costs and the VA funding fee.

Compile the paperwork you will need to apply for a mortgage. Document your income with pay stubs, bank statements and your most recent tax forms. List contact information for your employer and landlord so the lender can verify your employment and current living arrangements. Include your Discharge Papers and Veterans Separation Document to verify your service.

Contact lenders and determine whether they have had experience with VA loans. Apply in person with that lender by supplying your financial and veterans' documentation.

Complete the mortgage application by filling out your personal and financial information. The lender will process the application and request a certificate of eligibility from the office of Veterans Affairs.

Start looking for a house while you wait for the application to go through the verification and underwriting processes. This can take from one day to several weeks depending on the circumstances.

Start negotiating the terms of sale once you find a house. Keep in mind the VA loan threshold of $417,000, as of December 2010. Also remember that any purchase agreement includes a "VA option clause" that allows you to get out of the sale without penalty if the VA does not approve it. Ask your real estate agent for an agreement with the proper wording.

Give the sale agreement to the lender who will pass it on the the VA. The VA will have the property appraised. Once the VA approves the property, the lender will give final loan approval.

Go to the closing meeting, which is the final step in the VA mortgage-application process. Sign agreements between yourself and the lender and between yourself and the seller. Pay the VA funding fee, which will equal between 0 to 3.15 percent of the loan, depending on the circumstances. Pay the closing fees, which may cover the appraisal, title insurance, and recording the transfer of ownership, depending on the lender and your location.

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