How to Obtain VA Eligibility for a Home Loan

By W D Adkins

Beginning in the years immediately following World War 2, the GI Bill and subsequent programs have helped countless veterans to become homeowners. The Department of Veterans Affairs Loan Guaranty Service does not actually write mortgages. As the name implies, they guarantee home loans for eligible veterans. If you qualify for a VA loan guarantee, approval by a lender is virtually certain. It's fairly easy to obtain VA eligibility for a home loan, but you also have to meet creditworthiness requirements.

Review your service record to see if you may be eligible for a VA loan. You must have 181 days of service in any branch of the US military (90 days in wartime) and not have a dishonorable discharge. If you are still on active duty, you may obtain VA eligibility for a home loan, provided you meet the time in service requirement.

Evaluate your income and credit standing. To obtain VA approval and a guarantee for your home loan, you should have a credit score of at least 580. Having a bankruptcy or foreclosure on your record will not disqualify you, but you will need two or more years of good use of credit following such an event. If there are extenuating circumstances, the VA may waive these requirements. For example, a waiver is normally granted if credit difficulties are due to problems stemming from a combat injury. Veterans who have not established a credit history can substitute their record of rent and utility payments to obtain home loan approval from the VA.

Complete and submit VA Form 26-1880 (Request for Certificate of Eligibility) along with a photocopy of your DD-214 (Member 4 copy). You can complete and print Form 26-1880 online at homeloans.va.gov (a link to the form is below). Mail the completed Form 26-1880 and a photocopy of your DD-214 (do not send the original) to the address listed on the form.

Contact a VA-approved lender, and submit a mortgage loan application. You can find approved lenders using the VA search tool online (link below). Your bank is likely to be on the approved list, especially if it's a large institution.

Keep in mind that you must meet VA income standards. These state that you should have a stable income and that total debt payments (including the proposed mortgage) must be no more than 41 percent of your gross income.

If you obtain VA eligibility for a home loan, there are more benefits besides a flexible credit policy. VA rules limit closing costs and you may be able to buy that home with little or no money down.

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