To find an assumable mortgage, you can search online and check out your local newspaper. Believe it or not, many people still post “assumable homes for sale” in newspapers.
VETERAN BENEFITS
Veteran benefits refer to a range of services and support that are provided to former members of the armed forces and their families. These benefits may include financial assistance, medical care, education and training, disability compensation, housing assistance, and other resources to help veterans transition back into civilian life.
The specific benefits available to veterans may depend on a variety of factors, including their length of service, type of discharge, and any service-related disabilities. Some benefits may be available to all veterans, while others may be limited to those who meet certain eligibility criteria.
Overall, the goal of veteran benefits is to recognize and honor the sacrifices and contributions of those who have served in the military, and to provide them with the support they need to thrive after their service has ended.
WHY ARE THESE IMPORTANT?
Benefits are important to veterans for several reasons:
- Recognition and appreciation: Veteran benefits demonstrate the nation’s recognition and appreciation for the sacrifices and contributions made by those who have served in the military.
- Financial security: Many veterans face financial challenges after leaving the military, particularly if they have service-related disabilities or struggle to find employment. Benefits such as disability compensation and education and training assistance can help provide financial security and stability.
- Access to healthcare: Veterans often have unique healthcare needs as a result of their service, and access to quality healthcare can be critical to their overall well-being. Benefits such as medical care and mental health services can help ensure that veterans receive the care they need.
- Housing assistance: Many veterans face challenges when it comes to finding affordable housing, particularly if they have service-related disabilities. Benefits such as housing assistance can help ensure that veterans have a safe and stable place to live.
Overall, veteran benefits play a crucial role in helping veterans transition back into civilian life and ensuring that they receive the support they need to thrive after their service has ended.
COMMON VETERAN BENEFITS YOU NEED TO KNOW ABOUT
Some of the most common veteran benefits include:
- Disability compensation: This benefit provides financial assistance to veterans who have service-related disabilities.
- Healthcare: The Department of Veterans Affairs (VA) provides a range of medical services, including preventative care, mental health services, and specialized care for veterans with unique health needs.
- Education and training: Veterans may be eligible for education and training benefits, including tuition assistance, GI Bill benefits, and vocational rehabilitation.
- Home loans: The VA offers home loan programs to help veterans purchase, build, or improve a home.
- Life insurance: Veterans may be eligible for life insurance coverage through the VA.
- Pension: Veterans who meet certain eligibility criteria may be eligible for pension benefits, which provide financial assistance to those with limited income and resources.
- Vocational rehabilitation and employment: The VA provides services and support to help veterans with disabilities find and maintain employment.
- Burial benefits: The VA offers burial benefits, including a burial plot, grave marker, and reimbursement for some burial expenses, to eligible veterans.
HOW DOES Veterans Affairs (VA.org) WORK?
The VA or Veterans Affairs is committed to ensuring that veterans receive the benefits due to them and has established a range of programs and processes to support this goal. It has established the Veterans Benefits Administration to help ensure that veterans receive the benefits due to them:
- Claims assistance: The VA offers assistance to veterans in filing claims for benefits. This may include providing guidance on eligibility criteria, helping to complete application forms, and providing support throughout the claims process.
- Disability evaluations: Veterans who are seeking disability compensation may be required to undergo a disability evaluation to determine the extent of their disability and the level of compensation they are eligible for.
- Appeals process: If a veteran’s claim for benefits is denied or if they believe that they are not receiving the full benefits due to them, they may appeal the decision. The VA has established an appeals process to ensure that veterans have the opportunity to have their claims reviewed and adjudicated fairly.
- Education and outreach: The VA provides education and outreach programs to help ensure that veterans are aware of the benefits available to them and how to access them. This may include workshops, training programs, and online resources.
- Collaboration with other agencies: The VA works closely with other federal and state agencies, as well as nonprofit organizations, to help ensure that veterans receive the full range of benefits and services available to them.
CHALLENGES
Despite dedicated efforts by the VA, veterans today continue to face several challenges in claiming benefits. The most common of these are:
- Complex eligibility criteria: Eligibility criteria for veterans’ benefits can be complex and difficult to navigate, particularly for veterans who have multiple types of service or who have experienced challenges with their discharge status.
- Lengthy claims process: The claims process for veterans’ benefits can be lengthy, often taking several months or even years to complete. This can be particularly challenging for veterans who are in need of immediate assistance.
- Lack of information: Some veterans may not be aware of the benefits available to them or how to access them. This may be particularly true for veterans who have recently left the military or who have limited access to information resources.
- Service-related disabilities: Veterans with service-related disabilities may face additional challenges when claiming benefits, particularly if they require specialized care or support.
- Backlog of claims: The VA has struggled with a backlog of claims in recent years, which can further delay the claims process and create additional challenges for veterans seeking benefits.
These challenges can make it difficult for veterans to claim the benefits they are entitled to, highlighting the need for continued efforts to streamline the claims process, improve access to information, and provide support to veterans throughout the process.
HOW WE CAN HELP
At Independence.org, we are employing the latest decentralized technologies to create and provide a purpose-built advocacy platform for veterans. This shall ensure:
- Greater access to information: A decentralized platform can provide a centralized source of information about veterans’ benefits, eligibility criteria, and the claims process, making it easier for veterans to find the information they need to access the support they are entitled to.
- Increased transparency: A decentralized platform can provide greater transparency around the claims process, allowing veterans to track the status of their claim and receive updates on any changes or developments. This can help reduce anxiety and uncertainty for veterans, who may otherwise be left in the dark about the status of their claim.
- Improved collaboration: A decentralized platform can enable greater collaboration between veterans, advocates, and service providers, allowing for the sharing of knowledge, resources, and best practices. This can help ensure that veterans receive the most effective support possible and can help streamline the claims process.
- Decentralized decision-making: A decentralized platform can help ensure that decision-making around veterans’ benefits is more decentralized, with a greater role for veterans and advocates in shaping policy and practice. This can help ensure that veterans’ needs and perspectives are better reflected in decision-making, leading to more responsive and effective support.
- Increased efficiency: By providing a centralized hub for information and support, a decentralized platform can help reduce duplication, streamline processes, and reduce costs, leading to a more efficient and effective system for supporting veterans.
Independence.org aims to be a valuable advocacy platform for veterans, helping to improve access to information, increase transparency and collaboration, empower veterans and advocates to shape policy and practice, and increase the efficiency of the system.
With your help, we shall work toward better outcomes for veterans and a more effective system for supporting those who have served their country.
There are no minimum credit score requirements to qualify for a VA loan, but your private lender will require you to have a minimum score of 620.
To improve your credit score, implement the following financial habits:
- Try not to max out your credit cards.
- Make sure to clear any existing debts.
- Pay your bills on time.
VA HOME LOAN DOWN PAYMENT REQUIREMENTS
Unlike conventional loans (which require you to either pay a 20% down payment or PMI), VA home loans have helped millions of veterans combat homelessness through their “no-down-payment” option.
Eligibility Requirements for VA Home Loans
The eligibility requirements for VA home loans differ from service type to service type. However, all applicants must apply for the COE to validate their eligibility.
You must meet any one of the conditions stated above to qualify for the loan. But, if you cannot meet either of the conditions, there is still a slight possibility that you might qualify if your discharge falls under one of the following categories:
- You were discharged due to hardship, reduction in force, or at the convenience of the government.
- You were discharged due to a service-connected disability.
- You served at least 21 months of the two-year enlistment and were discharged early.
Here are eligibility requirements for different service types.
REQUIREMENTS FOR VETERANS HOME LOANS
To apply for VA loans as a veteran, you’ll need DD Form 214 (Report of Separation) to obtain your COE. Besides getting your COE, you must also submit documents to meet the lender’s requirements and ensure that the house meets all the MPRs.
REQUIREMENTS FOR ACTIVE-DUTY SERVICE MEMBERS
All active-duty service members are required to submit their Statement of Service.
This statement should include the following information:
- Your full name
- Date of birth
- Social Security number
- Date of joining the service
- Lost time, if any
- Name of the commander confirming all of the information
VA MORTGAGE REQUIREMENTS FOR SPOUSES
Getting VA benefits as a spouse depends on whether you receive Dependency and Indemnity Compensation (DIC).
If you receive DIC, you must fill out the VA Form 26-1817 and obtain a copy of your Veteran’s DD Form 214.
If you don’t receive DIC, you’ll need to apply by filling out VA Form 21P-534EZ and submitting the application to your state’s Pension Management Center.
In addition to these, you will also need to submit a copy of your marriage license, the veteran’s death certificate, and separation documents.
REQUIREMENTS FOR OTHER BENEFICIARIES
Here’s a list of documents you’ll need, depending upon your service type.
- Current/Former Activated National Guard/Reservist – DD Form 214
- Current Non-Activated National Guard/Reservist – Statement of service
- Discharged National Guard – NGB Form 22 and 23.
- Discharged Army Reserve – DARP Form FM 249-2E or ARPC Form 606-E
- Discharged Navy Reserve – NRPC 1070-124
- Discharged Air Force Reserve – AF 526
- Discharged Marine Corps Reserve – NAVMC HQ509 or NAVMC 798
- Discharged Coast Guard Reserve – CG 4174 or 4175
Related:
2022 Requriment For Borrowing VA Loan Amount
What Is the Certificate of Eligibility (COE)?
The VA Certificate of Eligibility (COE) is one of the most important documents required for the VA home loan process. It stands as evidence to your private lenders that you are eligible for VA loan benefits.
HOW DO I APPLY FOR MY COE?
You can get the COE through one of the following methods:
- You can apply online at VA’s official site.
- You can visit a regional VA office and fill out your application.
- You can ask your private lender to get it for you.
DOES GETTING A COE MEAN YOU ARE GUARANTEED A VA LOAN?
While COE is an important requirement to qualify for a VA loan, it’s not the only requirement.
Besides qualifying for the COE, you must also meet your lender’s requirements, such as having a minimum credit score of 620, enough residual income, and a debt-to-income ratio of 41%. You must also make sure that the property selected meets all of the Minimum Property Requirements (MPRs).
Types of VA Loans
There are several different types of VA loans, and each has its own perks and benefits.
Here is an overview of what you need to know.
BUYING A HOME? USE A VA PURCHASE LOAN!
VA purchase loans allow borrowers to purchase a new home without paying a down payment or Private Mortgage Insurance (PMI).
To qualify for a VA purchase loan, all of the following conditions must be met.
- You must prove your eligibility and obtain a Certificate of Eligibility (COE).
- You must meet the lender’s financial requirements.
- You must select a property that meets all of the MPRs defined by the department.
VA MORTGAGE REFINANCING OPTIONS
The VA also offers its applicants the opportunity to refinance an existing VA/Non-VA loan to qualify for even lower interest rates or tap into their home’s equity.
VA INTEREST RATE REDUCTION REFINANCE LOAN (VA IRRRL)
This refinancing option allows you to refinance an existing VA home loan into a new loan with new guidelines and lower interest rates. You must meet the following conditions to qualify for an IRRRL:
- You have an existing VA-backed loan.
- You are using VA IRRRL to refinance an existing VA-backed loan.
- You currently reside in the home you are refinancing.
Why go for an IRRRL?
Also known as a streamline refinance, this refinancing option allows you to qualify for even lower interest rates. This can lower your monthly payment and result in massive savings.
Additionally, this loan type changes your fixed/adjustable interest rate to a fixed interest rate, making your monthly mortgage payment more stable.
To apply for an IRRRL, get in touch with a VA-approved private lender so that you can submit all the required documents, follow the loan closing process, and pay the closing costs.
VA CASH-OUT REFINANCE
Need cash fast?
This refinancing type lets you refinance a VA or Non-VA loan into a VA home loan and tap into your home’s equity to repay any existing debt, pay tuition, and do home renovations.
To qualify for a cash-out refinance loan, all of the following conditions must be met:
- You are eligible for the VA COE.
- You are able to meet all the requirements of the VA and your lender.
- You are currently living in the home you are refinancing the loan for.
The VA cash-out refinance is a good choice if you wish to convert your non-VA loan into a VA home loan or want to eliminate your debt by tapping into your home’s equity.
VA ENERGY EFFICIENT MORTGAGE
The VA Energy Efficient Mortgage (EEM) is perfect for those who want to invest in their property by renovating their home. If you are someone who is planning to live in a house for a long time, EEMs could be a great option for a variety of functional updates.
Here’s a list of home improvements you can pursue with an EEM.
- Thermal doors and windows
- Insulation for walls, roofs, and floors.
- Water heaters
- Solar heating and cooling systems
- Storm doors or windows
- Heat pumps
- Furnace modification
NATIVE AMERICAN DIRECT LOAN (NADL) PROGRAM
If you or your spouse are a Native American veteran, you can opt for the NADL program to purchase, renovate, and build a home on Federal trust land, given you meet the following conditions.
- You have a valid VA COE.
- You currently reside in the house you are using your NADL benefits for.
- You can prove that you have enough funds to pay for the monthly installment of a NADL.
- You can meet your lender’s financial and credit requirements.
- Your tribal government has an MOU with the VA on how the plan will work on the trust land.
What Is the VA Loan Limit?
The VA home loan limit is the maximum amount an applicant can borrow without making a downpayment. However, an applicant with full entitlement is not restricted to any VA loan limits, meaning they can borrow as much as they qualify for.
What is entitlement?
Remember when we said that the VA will pay a certain amount to the lenders if the borrower defaults in any way?
This certain amount is called entitlement—it can be either $36000 or 25% of the loan amount. A borrower who has not used their VA loan benefits or has repaid their previous loan fully has full-entitlement.
VA LOAN LIMITS BY STATE (2021)
Related:
2022 Requriment For Borrowing VA Loan Amount
VA Home Loans Frequently Asked Questions (FAQs)
Below are the most frequently asked questions about VA home loans.
HOW MANY TIMES CAN YOU USE A VA LOAN?
You can borrow a VA home loan as many times as you want, given that you have repaid the previous loan in full and can qualify for VA loan benefits again.
WHAT IS THE VA GUARANTEE?
The US Department of Veterans Affairs (VA) guarantees a certain amount of the loan. This means that if a borrower defaults in any way on paying back the loan, the department will pay back a certain amount to the lender, depending upon your VA loan entitlement.
This VA guarantee makes it easy for lenders to provide mortgages at lower interest rates.
WHAT IS THE VA FUNDING FEE?
The VA funding fee is a one-time payment made by applicants for the VA home loan to the department. The more you pay as a downpayment, the less your funding fee will be.
IF I’VE PREVIOUSLY USED A VA MORTGAGE, CAN I USE IT AGAIN?
Yes, as long as you qualify, you can use your VA loan benefits as many times as you want.
WHAT IF I DON’T MEET THE MINIMUM SERVICE REQUIREMENTS?
If you don’t meet the minimum service requirements for a VA Loan defined by the VA, you might still qualify for the loan if your discharge falls under one of the following categories.
- You were discharged due to a reduction in forces, early-out or at the convenience of the government.
- You were discharged due to a service-connected disability.
- You served at least 21 months of the two-year enlistment and were discharged early.
CAN I GET A VETERANS MANUFACTURED HOME LOAN IF THE HOME IS NOT PERMANENTLY AFFIXED?
Yes, you can. To get a veteran manufactured home loan for a house that is not permanently affixed, you must ensure that the house is attached to the land you own. Once you can prove this, you can qualify for a veteran’s manufactured home loan.
CAN A SPOUSE BENEFIT FROM VA LOANS?
If you meet any one of the below conditions, you can qualify for a VA mortgage as a spouse.
- You survived your spouse who passed in the line of duty or from a service-related condition, injury, or disability.
- You survived your veteran going MIA while on service, or they were a POW. (Limited to one-time use.)
WHAT IS VETERANS MORTGAGE RELIEF?
Veterans Mortgage Relief are programs that help veterans avoid wrongful foreclosures and excessive interest rates.
VA Loan Pros and Cons
HOW MUCH OF A VA HOME LOAN CAN I AFFORD?
Income, debts, and other expenses influence how much you can afford. In terms of affordability, the VA says the amount is reasonable if it doesn’t push you above a debt-to-income ratio of 41% (the total monthly debt payments divided by your gross monthly income).
The biggest advantage of VA loans are that you don’t have to count your Military Basic Allowance for Housing (BAH) as income or pay monthly mortgage insurance. Therefore, if you receive this monthly BAH, and it covers most or all of your housing costs, your debt-to-income ratio can be lower than 31%.
HOW LONG DO YOU HAVE TO LIVE IN A HOUSE WITH A VA MORTGAGE?
Generally, you have to move into your home within 60 days of closing. It is not necessary to live in the home for a certain amount of time before selling it. However, if you are considering renting a home you purchased with a VA home loan, the expectation is that you occupy the house as your primary dwelling for 12 months when you receive a VA mortgage.
HOW MANY TIMES CAN YOU GET VA LOANS?
You can get VA loans as many times as you wish. Keep in mind that the rules and requirements may change each time you apply for a new VA home loan. In most instances you can only carry one VA mortgage at a time, so you would probably have to payoff your existing mortgage before qualifying for the next one.
Also, make sure you don’t have any unpaid periods of active duty service when applying again. You also must wait at least two years to reapply if your initial application was denied or withdrawn.
VA Loan Rates by Credit Score
While it is not necessary for you to have an excellent credit score to qualify for VA loans, you must satisfy the lender’s requirements by having a minimum credit score of 620.
VA loan rates depend upon many factors, like market conditions, your credit history, debt-to-income ratio, and credit score.
While some of these factors are out of your hands, you can definitely control your credit score. An applicant with a good credit score will be quoted a lower interest rate than an applicant with a bad or fair credit score, resulting in some major savings.
Here’s an estimate of what your monthly payment and APR would look like with different credit scores.
Additional VA Home Loan Uses
Contrary to popular belief, VA loans can be used for more than just your primary residence. In fact, there are multiple VA loan options available for you to choose from.
VA LOANS AND SECOND HOMES
Generally, second homes are meant as an investment property or vacation home.
So, can you get a second home with your VA mortgage benefits?
VA home loans are revolutionary mortgage programs that allow people to purchase a primary residence. So, no, you can’t.Â
However, you may be able to work around this and use the additional benefit to purchase two homes.
Here’s what you need to understand:
With VA home loans, you don’t need to live on the property for most of the year. However, you can earn rental income by living in one house and renting the other.
If you’re wondering how to get a VA home loan for a second home, you must fully understand the concept of full entitlement and speak with a VA-approved lender.
MULTI-UNIT HOMES AND VA LOANS
VA loans can also be used to purchase a duplex or multi-unit building. However, you must meet the eligibility guidelines of the department and lenders.
Here are some general requirements for VA loans you must meet:
- The house must not be in natural disaster hazard areas, like near volcanoes.
- The house must be used as a primary residence only.
The VA can approve a loan for a house with one to four units. This includes duplex properties and multi-units. The eligibility criteria and requirements are the same as for a one-unit home.
VA LOANS AND RENTAL PROPERTIES
Though the US Department of Veterans Affairs (VA) does not provide loans for rental or investment properties, it does provide mortgages for multi-unit properties.
So, if you are planning to live in one unit and rent the others, you can use your VA homes to earn a rental income with up to four total units.
In addition to meeting the department’s and lender’s requirements, you must also take care of the occupancy requirements if this is the route you want to take.
Some lenders might expect you to prove that you’ll be living in the house for at least 12 months after the loan closing.
For multi-unit homes to qualify for VA loans, they must meet unique guidelines that differ from single-unit homes.
All units must have separate utility services or joint water, sewer, gas, and electricity lines. The house must also have individual shut-offs for all units.Â
Related:
2022 Requriment For Borrowing VA Loan Amount
BUYING A CONDO WITH A VA LOAN
Applicants may be able to get a VA home loan to buy a condo or condominium. However, they must meet some additional requirements that might differ from a one-unit or multi-unit home.
Generally, a condo complex must be on the list of condos approved by the VA. However, if a condo is not in a VA-approved development, borrowers can get the help of their private lenders to receive approval.
Your lender will be required to send a written request to the department along with some documentation.
Here’s a list of things to know when opting for a condo:
- In some cases, it can take months to receive approval for a condo.
- After the VA approves the condo, the approval is for a lifetime.
- The VA can flag a development if the occupancy rate is low.
- VA approval for new developments depends on the number of units sold.
BUYING A MANUFACTURED HOME WITH A VA LOAN
Current and former service members can also use their hard-earned military benefits to purchase a manufactured/mobile home. A manufactured home is a house built entirely in factories that are towed to the home site.
The house must meet the building codes defined by the U.S. Department of Housing and Urban Development (HUD) to qualify for a VA loan. The home must also have an identification plate outside and a data plate inside stating all the specifications.
To qualify for a manufactured home VA loan, the house must be affixed to a permanent location and classified as a real-estate property.
When May a VA Loan NOT Be the Best Choice?
VA Loan Assumption
One of the most unknown yet noteworthy benefits of VA loans is that they are assumable.
A VA loan assumption means that a borrower takes over or assumes a mortgage, given that they are approved for the loan. In simpler words, assumption means signing over your debt to another applicant who can meet all the eligibility criteria and requirements for the loan.
REQUIREMENTS FOR ASSUMING VA LOANS
To qualify for VA loan assumption, the borrower must meet the following conditions:
- The borrower must meet credit and income requirements.
- The processing fees must be paid in advance.
- The existing mortgage must be current—all the dues must be cleared before closing.
- The borrower must agree to assume all aspects of the loan, including repayment plans.
- The new or original owner must pay the funding fee, which is 0.5 of the existing amount.
HOW TO ASSUME A VA LOAN?
Both veterans and non-veterans can assume a VA loan, given they meet the guidelines and eligibility criteria.
Generally, there are two ways to assume VA loans.
- The new buyer is a veteran who can substitute his eligibility for the seller’s eligibility.
- The new buyer can meet the payment guidelines of the mortgage.
The second step is the safest method, as it would only hold the new buyer responsible in case of default.