Veterans Administration Home Loans

Veterans of the United States armed forces may be eligible for a broad range of programs and services provided by the federal Department of Veterans Affairs (VA). One program that is available to veterans who wish to purchase a home is the G.I. loan or V.A. loan that provides assistance on home loans with lowered interest rates and a guarantee on the loan. Typically veterans can also get these loans with no down payment, so long as the property is appraised as selling at or near market value.

Guaranteed Loans for Veterans

The Veterans Administration (VA) guarantees, or insures loans for those who have served in the United States Armed Forces, just as HUD guarantees loans for eligible borrowers. That is, the VA does not loan the money directly. A lending institution such as a bank, savings and loan association or mortgage company makes the loan. The VA enters into an agreement with the lender to guarantee or insure a loan up to a certain amount, so the lender will probably not suffer any loss in the event the veteran or subsequent owner fails to repay the loan. The veteran may use a VA loan to

- Buy a home
- Buy a residential unit in a condominium project
- Build a home
- Repair, alter, or improve a home
- Refinance an existing home loan
- Buy a mobile home and/or lot.
- Improve a home through installation of a solar heating and/or cooling system or other weatherization improvements.

A veteran may use his or her loan guarantee eligibility to refinance existing mortgage loans on dwellings or farm residences the veteran occupies, and veterans using loan guarantee for such refinancing may pay points required by the lender. However, a VA loan may not be used to buy a farm, except for a farm on which there is a residence which will be personally occupied by the veteran applicant.

Title 38 of the U.S. Code specifically requires that, in order for a veteran to obtain a GI loan for the purchase or construction of a home, the veteran must certify that he or she intends to occupy the property personally as his or her home. If the GI loan is for the purpose of refinancing, altering, improving, or repairing a home, the veteran must certify that he or she is the owner and occupant of the home. For making a false certification, the veteran may be subject to possible criminal prosecution.

A veteran can get a GI loan to buy or construct a residential property that contains more than one family unit. However, the total number of separate units cannot be more than four if one veteran is buying. If more than one veteran is buying, then one additional family unit may be added to the basic four for each veteran participating. All veterans involved must live in the property.

The property must be located in the United States, its territories, or possessions. This includes Puerto Rico, Guan, the US Virgin Islands, American Samoa, and the Northern Mariana Islands. A VA loan may not be used to buy property in a foreign country.

General Eligibility

Eligibility for most VA benefits is based upon discharge from active military service under other than dishonorable conditions. Active service means full-time service, other than active duty for training, as a member of the Army, Navy, Air Force, Marine Corps, Coast Guard, or as a commissioned officer of the Public Health Service, Environmental Science Services Administration or National Oceanic and Atmospheric Administration, or its predecessor, the Coast and Geodetic Survey. Generally, men and women veterans with similar service may be entitled to the same VA benefits.

Dishonorable and bad conduct discharges issued by general courts-martial may bar VA benefits. Veterans in prison and parolees must contact a VA regional office to determine eligibility. VA benefits will not be provided to any veteran or dependent wanted for an outstanding felony warrant.

These benefits are legislated in Title 38 of the United States Code. The booklet contains a summary of these benefits effective Jan. 1, 2008. For additional information, visit the VA Web page at www.va.gov.

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