If you were in the military and you want to buy a house, you would likely consider a VA home loan. You can use VA loans for buying a house or for refinancing. A VA loan is a mortgage that the U.S. Department of Veterans Affairs guarantees. The VA doesn’t fund the loan. Instead, a private lender like a bank or credit union funds it.

VA loans are a way to simplify homebuying for veterans and make ownership more attainable because the loans don’t require a down payment. VA loans are available to U.S. veterans, active-duty military, and some surviving spouses.

The program means the federal government repays a lender part of a loan if the borrower doesn’t make the payments. The risk for lenders is reduced, and then they can offer better terms to the borrower without requiring a down payment.

You choose the lender you prefer to work with if you're eligible for a VA loan. A lot of lenders, but not all, offer VA loans. Some lenders specialize in these loans.

Eligibility for a VA loan includes:

• You’re on active military duty, or you’re a veteran meeting certain requirements for length of service
• You’re the surviving spouse of a person who died either from a service-connected disability or while on active duty, and you haven’t remarried or remarried after age 57. You may be eligible if you’re the spouse of a prisoner of war or a service member missing in action.
• Veterans and service members have to meet the lender's requirements regarding their credit and income. The VA doesn’t set a minimum credit score for loan eligibility, but lenders can. Lenders will also look at an applicant’s debts and income to determine how likely they think you will be able to pay your mortgage back.
• Buying a property will have to be your primary residence and meet certain safety standards and codes.

Benefits of VA Loans

There are quite a few advantages of VA loans for eligible individuals. There’s no down payment or mortgage insurance required. The interest rates are usually competitive, and closing costs are limited. The Department of Veterans Affairs limits the origination fee a lender can charge to no more than 1% of the loan amount. The VA also prevents lenders from charging certain other closing costs.

Applying for a VA Loan

To apply for this type of home loan, you must get a certificate of eligibility, which we’ll discuss below. This shows that your military service meets the requirements for the loan. Once you do that, you can find the right lender. You should plan to get preapproved with a few lenders so you can compare their rates.

To buy a primary residence using a VA loan, it needs to meet certain minimum standards to ensure it’s structurally sound, clean, and safe. After you put in an offer, the mortgage lender goes over your finances, orders a VA appraisal, and then after you’re approved, you close on a loan.

Getting Your Certificate of Eligibility

A VA certificate of eligibility is a document telling a lender you meet the requirements for this type of home loan. You don’t need the certificate of eligibility (COE) to start shopping for VA loans, but you’ll need to have it before you can close.

There are a few ways you can get a COE. You can ask a VA-approved lender to get it for you. You can also use the VA’s eBenefits online portal to request your COE or complete a hard copy request for a Certificate of Eligibility and mail it to your regional loan center.

Most of the time, the fastest way to get your COE is through the lender. Many VA lenders have access to an online application, and they might be able to issue a COE on the spot if they have enough information in the system's database.

If you’re a surviving spouse, you’ll probably need to download a request for determination of loan guarantee eligibility form and then take it to a lender to be processed.

Sometimes, discharge or separation papers for the veteran may be needed for verification. In that situation, lenders can send required documents on behalf of a borrower so the VA can process the request.

Finally, the documents you might have to show to get a COE depend on whether you’re a veteran, current service member, or discharged National Guard or Reserve member.

If you’re a veteran, you’ll need your Form DD214, which is your discharge or separation papers. If you’re a service member, you’ll need a statement of service. If you’re a current or former activated National Guard or Reserve member, you’ll need Form 

NGB 22.