Note: This blog was originally published in March 2013 and has been updated.
There are many types of mortgages out there, but if you are Veteran looking to buy a home, you should consider a VA loan. The features of this loan make it a great option for many Veterans and their families. Before we discuss those features and benefits, let us first answer: what is a VA Loan?
Through the original Servicemen’s Readjustment Act, also known as the GI Bill of Rights, the Veterans Affairs loan began in 1944. VA loans are guaranteed by the United States Department of Veterans Affairs (VA). The loan was specifically designed to provide eligible American Veterans and their families with a federally guaranteed home so they could take part in the American dream.
VA loans offer no down payment requirement (for qualifying consumers) and often do not require Private Mortgage Insurance (PMI). Additionally, if refinancing an existing VA loan, the qualified borrower can take cash out of their home up to take out up to 95% of the appraised value as determined by VA. Some states also offer additional resources to Veteran homeowners, such as property tax reductions.
A Veteran, active duty, or honorably discharged may be eligible for a VA loan if he/she meets the following requirements:
Served 90 days of active service during wartime
Serviced 181 days of active service during peacetime
Has more than 6 years of service in the National Guard or Reserves
The borrower is the spouse of a service member who has died in the line of duty, or as a result of a service-related disability
More information about eligibility for VA loans can be found on the VA website.