What Homes are Eligible with the VA Program

What Home Types Can Be Purchased With a VA Loan?

Once you find out about the VA’s special loan program for purchasing homes, often the next question that comes to mind is how Which Home to Chooselimited you are when choosing the home you would like to purchase. While there are some limitations in place, for the most part, any house that you’d want to live in will be eligible for a VA loan. In this article, we’re going to talk about the eligible home types and the considerations that go with each type. We’re going to talk about existing homes, new homes, condos, and manufactured homes. Each situation is slightly different, so we’ll try to give you a good idea of what to expect in each situation.

 

Houses – Proposed, New, and Existing

Houses fall into three main categories, all based on the status of their construction: proposed construction (or under construction), new construction, and existing construction. A proposed or under construction is a property which is not completed when the loan is made. A new construction is a home that is completed when the loan is made but has not had its first occupant yet. An existing construction is a home that has had at least one occupant previous to the person getting the loan to buy it. A proposed/under construction home is eligible as long as it has been inspected appropriately by either the VA or HUD during construction. A new construction is covered if it is either covered by a one-year VA builder’s warranty, enrolled in a HUD-accepted ten-year insured protection plan, or built by a veteran, as the general contractor, for his/her own occupancy. An existing property is eligible for a VA loan as long as it meets the VA’s Minimum Property Requirements, which all properties must also meet.

 

VA Approved Condos and Community Developments

Condos are not as straightforward as houses. Each condo project needs to first be approved by the VA before any condos within the project can be eligible for a VA loan. Why? Because condos vary a lot in what the owner of a condo must agree to in order to purchase the condo. Many projects put limitations on the owner’s ability to sell the condo or other title limitations, and this presents a concern with one of the VA’s Minimum Property Requirements, which is that there are no restrictions on the title beyond the basic ones needed to obtain a home loan. A condo project may already be on the approved list, or you may need to submit the condo project’s documents to the VA for them to approve them. If the project is not approved, then no condos within that project will be eligible for a VA loan. The same is true with HOAs and other Planned-Unit Developments though those do not need to be approved beforehand; title and restriction issues will be discovered during the appraisal process. There are plenty of VA approved condos on the market so if you are looking to purchase a VA approved condo, click here for a good place to search VA approved condos that are available.

 

Manufactured Homes

Manufactured homes are a bit tricky. The VA distinguishes between manufactured homes, modular homes, and mobile homes. The type of manufactured home that is fully eligible for a VA loan term of 30 years must be classified and taxed as real property, properly affixed to a permanent foundation, substantially conform with the VA MPRs, and conform with applicable building code and zoning requirements for real estate. Modular homes, which are delivered to the building site in sections, but are not affixed to a chassis with wheels, are also eligible as long as they are constructed to the standards of the State in which the factory is located. For the most part, mobile homes, or manufactured homes on wheels, are not eligible for a VA loan, nor are houseboats. If you really have your heart set on getting a mobile home or a houseboat, you can look at Title 38 CFR 36.4200 to find out what your options are.

 

Summary & Conclusion

As you can see, any of the above home types, though, may not be eligible if they don’t meet the VA’s Minimum Property Requirements, which are not onerous or difficult to meet – they are considered a minimum standard of quality that a property must meet if it is to be expected to adequately meet the needs of the veteran-occupant.

 

Eligibility for VA Loans Based On Period of Service

Your eligibility is established by receiving your Certificate of Eligibility, which is obtained by filling out the VA form 26-1880 and submitting it to the VA for review. Getting your COE is the first step in applying for a VA loan, and can be done on your own or with a lender, online or in the mail.
; that is up to the individual lender and is subject to whether you meet the financial requirements for loan approval. Below are explanations of the different categories of service and the requirements for each.

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Wartime Service– If you served during WWII (9/16/1940 to 7/25/1947), the Korean War (6/27/1950 to 1/31/1955), or the Vietnam War (8/5/1964 to 5/7/1975), then you must have served for at least 90 days on active duty and have any discharge other than dishonorable. An exception to the 90 days requirement can be granted if discharge was due to a service-related disability. See a VA-approved lender for more information on getting your Certificate of Eligibility and qualifying for a VA loan.

Peacetime- If you served during any period prior to 1980 that was not during wartime (dates listed above), you would be classified under this category. Requirements for eligibility for service during this time frame include at least 181 days of continuous active duty status. To be eligible, you must also have received a discharge other than dishonorable. Just like for wartime service, if you were discharged prior to 181 days due to a service-related disability, an exception may be granted to allow you to be eligible for a VA loan.

Post 1980/1981 (Enlisted/Officer) Service– If your military service began after 9/7/1980 (enlisted) or 10/1601981 (officer), then you’ll be under more strict service requirements. You must have completed 24 months of continuous active duty or the full period that you were ordered to active duty as long as it was at least 181 days. This stipulation exists for those ordered off of active duty for reasons outside their control before the 24 month requirement. Discharge must also be other than dishonorable in order to be eligible. Individuals discharged with less than 181 days of active service for service-related disabilities are also eligible. Other reasons for discharge outside the control of the service member can also make the veteran eligible. These reasons include involuntary reduction in force, some medical conditions, or convenience of the Government.

Gulf War– If you began service after 8/2/1990 you are considered a Gulf War veteran. For a Gulf War veteran to be eligible for the VA loan program, they must have completed 24 months of continuous active duty or the full period that you were ordered to active duty as long as it was at least 90 days or have been discharged prior to 90 days of service due to a service-related disability. You must have a discharge other than dishonorable.= in order to be eligible.

Active Duty– If you’re currently on regular duty (as opposed to active duty for training), you need to serve for 181 days (unless you began during the Gulf War, then it is only 90 days).

Reserves and National Guard– In order for a Guard/Reservist to be eligible, assuming they are not otherwise eligible from previous military service, he or she needs to complete a total of 6 years of service in the Reserved or Guard. This includes attending required weekend drills and 2-week active duty training every year. Upon discharge, an honorable discharge must be received, or the veteran must have been placed on the retired list or the Standby Reserve after honorable service.

Surviving Spouse– Spouses of veterans who died in service or due to a service-related disability can be eligible for VA loan benefits providing. Requirements vary based on time frame and age; speak with a VA-approved lender to find out if you could be eligible for VA loan benefits

Eligibility and Benefits of VA Loans

The government tries to provide some benefits to members who serve the country. Among the other benefits that are available, is the Department of Veteran Affairs loan program for homebuyers. VA loans are mortgage loans that are designed to offer long-term financing to all eligible veterans or their surviving spouses. In case you want a loan from a private lender and things are such that you can’t pay your lender then VA stands behind and guarantees that the lender’s money will be paid.
Not all are eligible for the VA loan. You will be required to have a certificate of eligibility to get a VA loan. The people who are eligible for a VA loan are as follows.

  • Active duty personnel
  • Veterans of different fields
  • Some National Guard members
  • Surviving spouses of persons who have died while on duty
  • The spouses of personnel who are missing in action or taken captive

The VA loan has several advantages over the conventional loan.

Some of the benefits of VA loans are as follows:

1. No down payments:

Under this program, there has to be no money down. The eligible buyers can finance 100 percent of a home’s price without making any down payment. Conventional loans have very high down payment requirements. They at least require 20 percent of the value of the house as down payment. Thus, a lot of people can not afford to take out these conventional loans. The advantage in case of VA loans is that they do not require any down payments.

2. Processed faster:

If you are a potential buyer then you must submit your application and request for an appraisal of the property. This should be done before obtaining a VA loan. Some lenders, who have the VA approval for processing automatically, can finalize a loan. They do not need to wait for VA to review the application or the appraisal.

3. Protection of the lender:

The VA guarantees that it will provide repayment of the loan in case the borrower can’t. Thus, the lender is safe from any loss in the event of the borrower not being able to pay. This attracts the lenders and so they help veteran buyers in getting better loans.


4. Lowers cost of the buyer:

In case of the VA loan, the funding fee is approximately between half and 3.3 percent. This may be included in the loan or is supposed to be paid out–of–pocket. The loan is designed in such a way that it is meant to reduce the cost for the buyer.


5. Flexible loan:

These VA mortgage loans are not only for purchasing homes. They can also be used to build a new house or buy land. You may also take the loan out to make improvements to an already existing house. Thus, there is flexibility when it comes to VA loans.

Top 5 Reasons Past VA Loan Clients Love Them

We love to help our troops save money on their homes. We have many loan officers that spend countless hours doing that day in and day out.  We all feel that we hear amazing feedback about our services and loan offerings.

Here is one loan officer’s…

Top 5 Reasons Past VA Loan Clients Love Them

 

  1. I have helped hundreds of veterans either refinance or purchase homes using their eligibility. I think the main attraction to my clients is low-interest rates. Government insured loans on average are more competitively priced than conventional. In the last year, we have seen rates as low as 4.25% fixed.
  2.  No mortgage insurance, unless you have a loan that is under 80% of the appraised value, you will pay PMI (premium mortgage insurance). this is not the case on a VA insured loan, VA homeowners do NOT pay PMI, no matter what your loan to value is.
  3.  The ability to do a streamline refinance on a VA loan is a great sense of security, knowing you can refinance if rates drop without income qualifying and even more important no appraisal, this means if home values drop in your area you can take advantage of current market rates.
  4. 100 percent financing, With today’s struggling economy and banks tightening their lending criteria it is nice to know you can experience the American dream of owning a home with no money down.
  5. Another great component of the VA loan is the fact it’s an assumable loan, this can be a great help when selling your house.

Whichever of these stands out to you we would welcome the opportunity to talk over your options. Give us a call today to get started and see if these 5 help you become more comfortable with you mortgage of if you will find your own. Let’s get started together.

FAQ; How Do I Know If I Even Qualify?

It can be confusing and frustrating when you want to refinance, but don’t know if you qualify! So, if you are overwhelmed, take a deep breath and realize you aren’t alone. This is a question we get asked every day so we decided to try to clarify things a bit for you. There are some basic rules of thumb:

―currently on active duty for

  • at least 180 days,
  • 90 days of war service,
  • 180 days of peacetime service before the 1980’s or
  • 24 months of continuous service after the 1980’s, or
  • 6 years in the Guard or Reserves, or
  • the surviving (un-remarried) spouse of a service member who died on active duty or due to a service-related disability.

Of course, these requirements assume an honorable discharge, but disability or hardship discharges are also acceptable. Just because you don’t fit these categories doesn’t mean you aren’t eligible either. There are other categories of acceptability, like

  • cadets of Coast Guard,
  • Military or Air Force Academies,
  • midshipman from the Naval Academy, or
  • officers from the National Oceanic and Atmospheric Administration.

And that’s not even all of them! You could try Googling NOAA, The complete list of eligibility is hard to find, but it’s out there!

Once you think you meet the eligibility requirements, you need to get an eligibility certificate. The easiest way is to let your lender file for it electronically, but this only works for those who are in the VA records system. Basically, you have to file VA form 26-1880 with proof of service and mail it to the eligibility center in North Carolina. -Unless you are the surviving spouse, then use form 26-1817. You can call the VA Loan Eligibility Center at 1-888-244-6711 for more information.

Don’t be overwhelmed; when you work with us, you will have a good loan officer and they will make it easy for you. It’s his or her job to know all this, not yours, so don’t take on unnecessary stress! Call us at (866)-569-8272 and talk to a loan officer today! Next time: Reusing VA eligibility, Can I obtain another VA loan?

Next time: Reusing VA eligibility, Can I obtain another VA loan?

Resources: http://www.homeloans.va.gov

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*Annual savings calculator based on 2015 monthly average savings extrapolated year-to-date.