I blogged on my Wall!

VA  is still around folks!  My parents both served as Veterans and somehow never had a chance to take advantage of the home buying privilege offered through the VA.  I think what has happened, with all the hullabaloo of  foreclosures and distressed sales, somehow this loan is not sought out anymore as it quite was.  I used to have more clients come to me for VA loans. I haven't had as many clients applying for this type of loan nor inquiries. We have more veterans now and I think we need a shot in the arm reminder that the VA loan is still a viable option in a home purchase. VA is the only loan unaffected in the 100% zero 0 down financing rule.  So, there you have it Veterans, why not consider it, you deserve it!!

 VA Loan Entitlement and Eligibility

If you’re a military member or veteran in the market for a VA home loan, there are two basic things you need in order to get the process moving. One is your basic eligibility for the VA mortgage itself, the other is how much of that entitlement you have coming. First time home buyers with enough time in the service to qualify for a VA mortgage don’t have any worries when it comes to the entitlement issue; if you have never used your VA loan benefits and you qualify, you have 100% of your VA loan entitlement available to you.

To start the process, you must apply for a Certificate of Eligibility from the Department of Veterans Affairs. When the VA responds to your application, they issue qualified applicants a Certificate of Eligibility telling your lender (and you) two things:

* The borrower has served in the military long enough to earn and use VA home loan benefits.
* The amount of the borrower’s entitlement to use for the VA loan.

It’s easy to assume that because you’ve served in the armed forces you’re automatically eligible for ALL the benefits offered by the Department of Veterans Affairs; the truth is that vets and active service members are eligible for VA guaranteed home loans only when they meet certain general rules:

* The applicant must have served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard after September 15, 1940.
* The applicant must not have a dishonorable discharge.
* The applicant must have served at least 90 days or more during wartime or 181 continuous days or more during peacetime.

For most veterans on active duty today and for many who have retired or separated, the following rules also apply:

There is a two-year duty requirement for those who served

* As an enlisted member after September 7, 1980.
* As an officer after October 16, 1981.

For all who joined after these dates, VA regulations require;

* 24 continuous months of active duty military service.
* The full period for which called or ordered to active duty, but not less than 90 days (any part during wartime) or 181 continuous days during peacetime operations.

These rules mean brand-new recruits, basic trainees and recent graduates of military technical school programs are not eligible for a VA loan…yet.

New recruits and basic training graduates who want a VA home loan should begin working on their credit history between the time they join the service and the time they become eligible for a VA loan so that when the time comes the military member is completely ready to apply for a VA guaranteed mortgage.

Today's VA Loan Requirements

Service Requirements

Generally, for a service member or veteran to be eligible for a VA Loan, they will need to have completed any of the following:

• 181 Days of Peacetime Active Duty Service
• 91 Days of Wartime Active Duty Service
• 6 Years of Reserves or National Guard Service

If any of those are true or you are the spouse of a servicemember who was killed in action, you are likely eligible for a VA Loan.  You will need to make contact with a VA Loan Specialist to help you obtain your certicate of eligibility and let you know exactly how much you qualify for.

Income Requirements

VA Loans use two methods to qualify a veteran's income. The primary method of evaluating a veteran's income is residual income. This method determines if a veteran has sufficient income to cover daily living expenses after paying housing expenses, taxes, and other debts such as car payments and credit card payments. The second method is a debt-to-income ratio method like other mortgage types. VA Loans only use one ratio which is the ratio of total debt to income including your new house payment.  Using this method, the veteran's total debts should not exceed 41% of the veterans total income.

Credit Requirements

The VA does not set a minimum credit score requirement to insure VA Loans.  Most lending institutions require a 620 FICO score or better, however, to approve a VA Loan Application.  The VA Loan underwriter will be generally be looking for at least one year of good credit history.  Past Bankruptcy may be OK, but all payments must have been on time for at least one year.  If the Bankruptcy was a Chapter 7, the veteran must wait at least two years from the discharge date to apply for a VA Loan.

VA Loan Certificate of Eligibility

Before you can get a VA Home Loan, you must first obtain your VA Loan Certificate of Eligibility (COE).  To obtain your Certificate of Eligibility, you must complete the VA Form 26-880 Certificate of Eligibility request.  You may be able to obtain your COE by submitting your completed VA Form 26-880 and your Form DD-214 Discharge Papers to your lender. If your lender is approved to use the VA's Automated Certificate of Eligibility system (ACE), you may be able to get your COE in less than 24-48 hours.  If your lender is not approved to use the ACE system, it could take significantly longer.

If you have any additional questions about the current VA Loan Requirements, please contact the Veterans Administration or visit http://www.valoanrequirements.net/