How to Qualify for a VA Mortgage

By Gilberto Fuentes

The U.S. Department of Veterans Affairs (VA) offers qualifying veterans a federal mortgage guarantee benefit to purchase a home. Qualifying for a VA mortgage is similar to a traditional mortgage in that a favorable credit rating and certain income levels are required when applying through a lender. While a VA mortgage is very similar to a conventional or Federal Housing Administration (FHA) loan, a VA mortgage has some significant differences. For instance, a VA loan is guaranteed up to $417,000. In addition, veterans are able to secure the loan usually without a down payment, and there will be a slightly more favorable interest rate and terms than with traditional mortgage loans.

Request a VA Certificate of Eligibility from the Department of Veterans Affairs to establish your status as a qualifying veteran for a VA mortgage. You can request a Certificate of Eligibility through traditional mail or the VA web page. To request eligibility through the mail, you need to file VA form 26-1880 with the following VA office:

VA Eligibility Center
PO Box 20729
Winston-Salem, NC 27120

To file for eligibility through the VA web page, go to https://vip.vba.va.gov and register as a user. Registration through the web page requires you to enter identifying information to determine veteran status. The information you enter on your registration or on form VA 26-1880 must match the information in your DD-214 or your active duty statement of service. Once you establish your user name and password, sign in to the system and claim your Certificate of Eligibility.

Select the home that you want to finance with your VA mortgage loan. Contact the seller, or have your realtor contact the seller, and discuss the particulars required to purchase the home. If you elect to sign a purchase contract, it will be on the condition that the VA approves the loan.

Submit a mortgage loan application to your lender. In turn, your lender will attach other credit reports and financial information to complete the application. Additionally, the lender will request that the VA appraise your selected property to establish the loan amount. Unless the lender agrees to pay for the property appraisal and credit report, you will be responsible for these expenses.

Meet lender standards of credit worthiness and income level to increase your chances of loan approval. Your lender will be in communication with you during the application and approval process to work towards your final loan approval.

Close on your loan. At the closing, once all related documentation, mortgage notes, and terms are discussed and finalized, you will be allowed to take possession of the home.

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