When buying a home, one of the biggest challenges is coming up with enough money for the down payment without depleting your life savings, as you’ll need left over cash for other expenses.
Although the standard down payment is 20 percent, you have options other than a conventional home mortgage. The VA loan is a no-money-down mortgage that can help you purchase a home.
VA loans are guaranteed by the Department of Veteran Affairs. You won’t have to add private mortgage insurance (PMI). However, you must pay a funding fee, which is about 2.15 percent for veterans and members of the military, and 2.4 percent for those who qualify through their involvement with the Reserves and National Guard.
Service personnel on active duty and those who have been honorably discharged are eligible, as are home buyers who’ve spent a minimum of six years in the Reserves and National Guard.
Spouses of service members who died of duty-related causes or disabilities, as well as those who’ve gone missing-in-action (MIA) or have become prisoners of war (POW) may also apply for a VA loan. They may use their deceased spouse’s entitlement provided that they are presently unmarried.
In order to secure a VA loan, you’ll need to obtain a certificate of eligibility (COE). This document verifies the duration and character of the service you’ve rendered. It attests to your right to avail of the loan.
You can obtain it by accessing the eBenefits portal , visiting the nearest Regional Loan Center, or by mailing or faxing the necessary documents to the VA Loan Eligibility Center.
You may download the request form here.
Proof of service can be any of the following:
- DD Form 214 (Certificate of Release or Discharge From Active Duty)
- Current statement of service (for those on active duty)
- Most recent annual retirement points summary and evidence of honorable service (for Reservists and National Guard members)
- Signed statement of service with key personal information (for Reservists and National Guard members on active duty)
- NGB Form 22 (Report of Separation and Record of Service)
Surviving spouses may download request form 26-1817 here.
Ask your lender to obtain the COE for you
An approved VA lender can obtain a COE for you via the Automated Certificate of Eligibility (ACE) portal in a matter of minutes. All you have to do is give them your proof of service.
However, the lender won’t be able to secure a COE via ACE for the following:
- Reservists and National Guard members
- Unmarried surviving spouses
- Veterans with a previous VA loan that went into foreclosure
- Veterans discharged due to conditions other than honorable
- Veterans who wish to restore previously-used entitlement
- Those who don’t meet the minimum length of service and weren’t discharged for authorized exception
Keep in mind that you can’t transfer an ACE-generated COE from one lender to another, which means you’ll need a new one when you approach a different lender.
Otherwise, eligible veterans only need to update their COE if they get discharged or released during the loan application process.
A VA loan brings you one step closer to your dream of home ownership. Once you’ve secured financing, you can start looking at properties. Feel free to call 760 622 5087 or click here.