To benefit those who serve in our armed forces, the Department of Veterans Affairs (VA) provides a loan guaranty program that facilitates the process for active military, qualified veterans and surviving spouses of qualified veterans to purchase homes. A VA-backed mortgage allows the borrower to purchase a home with no down payment. Additionally, lenders do not require private mortgage insurance (PMI) with a VA loan, which is normally required for conventional loans in which the down payment is less than 20%. Appraisals are free as well.

Mortgage rates for VA-backed loans are very competitive compared to conventional mortgage rates. Borrower qualifications are considerably more relaxed than with conventional borrowers.


Everyone on active duty is automatically eligible for a VA-backed mortgage. Veterans must re-qualify each time they wish to exercise the privilege. For eligibility, the candidate must have served at least twenty-four months of active duty and have separated from the military with any discharge other than dishonorable.

The process is expedited significantly if the veteran has been pre-approved by the VA before contacting the lender.

Steps to Securing a VA Loan

1. Apply to the Veterans Administration for a Certificate of Eligibility (COE). To obtain this, you need to file an application by completing a VA Form 26-1880. The key to proving your eligibility is the DD214, proof of your service and discharge. Apply for a new DD214 if you have lost the original. Other required information includes proof of current residence, banking information and employment confirmation.

2. Talk to a VA-approved lender to discuss borrowing potential for pre-approval. The borrowing limit will determine the price range to focus the home search on. The maximum VA loan currently is set at $417,000.

3. Search for a home. Any real estate agent you choose to help for this is acceptable.

4. Finalize the mortgage with the lender.

Not all lenders are authorized to offer VA Loans. It is best to identify the lenders in your area that are approved, and then determine the best for the situation. It is a good idea to shop around a bit to determine who has the best rates.

A VA mortgage is intended to be used only for a primary home. A veteran may use the benefit again, but only after the first mortgage has been completely paid off. And the veteran must remember that they must apply for approval with the VA each time they intend to use the benefit.

For more information and help with next steps, talk to Capstone Direct today.