VA Home Loan

A VA loan is an exclusive, low-cost loan that helps enlisted service members and veterans of the United States military achieve their dream of home ownership. The VA loan was established in 1944 to help military service members buy a home after returning from World War II.  VA loans are backed by the Department of Veterans Affairs and can typically be used to finance up to 100% of a primary residence.

VA loans help military members, veterans, and other eligible borrowers purchase homes and refinance existing loans. VA loans usually offer low interest rates, no mortgage insurance, and no down payment. The loans are issued by private lenders but are guaranteed by the Department of Veterans Affairs (VA). This backing allows lenders to offer advantageous rates and terms and not require a down payment. 

To apply for a VA loan, you first need to establish if you are eligible by falling into one of these four categories:

1. An active duty service member
2. A veteran of the military who’s been honorably discharged
3. Member of the National Guard or Reserves
4. An unmarried spouse of a military member who either died while on active duty or due to a disability that resulted from their service

Then you will need to apply for a VA loan Certificate of Eligibility, which can be found on the VA’s website. While most VA loans don’t require a down payment or minimum income requirements, you will still need to have an acceptable debt-to-income ratio. During the VA loan process, you must have the house you wish to purchase appraised by a VA-approved appraiser. Your application will be submitted to underwriting to ensure you’ve met all the VA and private lender requirements. Once the underwriter has completed the review, they will either give you the approval to proceed to close, give conditional approval or deny your application.

There is no limit to the number of times a borrow can take advantage of VA loans as long as they still have money available in their entitlement or have paid off any previous VA loans and have restored their entitlement. Another scenario is your VA loan has been assumed by another veteran, which will restore your entitlement.

Yes, a VA loan can be assumable, even by someone who wouldn’t have originally been eligible to take out the loan themselves. The new borrower will still need to provide adequate financial qualifications to the lender. Ask your lender what requirements will be needed. 

A minimum loan amount of $175,000 is required to apply. Exceptions include mortgage products for properties located within the Greater Kansas City metro and surrounding areas. Contact a NASB Loan Officer for details on the excluded areas and/or zip codes.

There is no minimum income requirement for a VA loan. However, you must have an acceptable debt-to-income ratio (“DTI”). This DTI divides your monthly debts by your gross monthly income.

Another income-related requirement relates to residual income. This is the monthly income after all other expenses have been paid. This remaining amount should cover food, transportation, and other basic living costs. The residual income the VA requires to qualify for their program will vary by location and family size.

Remember that although the VA doesn’t set minimum credit score limits, lenders may have specific credit score requirements. Here's a  blog that tell more.

Documentation you may need for a VA loan includes but is not limited to the following:

• Copy of driver’s license
• Two years full tax returns - all pages and all schedules
• Two most recent pay stubs with year-to-date pay
• Two most recent asset statements - all pages with full transaction history
• Copy of your mortgage statement if you currently own
• Bankruptcy and discharge papers (if applicable)
• Certificate of Eligibility (COE).
• Form 28-1880 (Request for COE)
• Form DD-214

Click here for a calculator to determine VA loan payments based on purchased price, down payment, term, interest rate, military experience and prior VA loan use.

Yes - Unless a Power of Attorney ('POA') is approved .

For VA loans, typically no down payment is required.  However, a down payment may be required if the borrower does not have sufficient entitlement, for Graduated Loan Payment loans or one where the loan amount exceeds the property value.  Typically Lenders, however, will also require a down payment of 25% (or more) for the amount in which the loan exceeds the conforming loan limit (‘Jumbo loans’).

Every active duty member is issued a DD Form 214 when they are separated from the military, and most reservists are issued a DD Form 256. You can also get a military records request from the National Archives that maintains most records.

Yes, you can, although conventional loans typically have high interest rates and can charge monthly private mortgage insurance premiums. One reason to refinance a VA loan to a conventional loan is so that the borrower can use their VA credit to buy a rental home for extra income. Veterans only get one credit to purchase a home and this frees up their VA Entitlement so that they can purchase a second one. Here's a blog that tells more about how to refinance a VA loan to a conforming loan.