VA Loans FAQ
Get answers to your VA home loan questions.
Our VA Loans FAQ page is designed to answer your most basic and even difficult VA mortgage loan questions.
If you currently pay alimony to a former spouse, a copy of the divorce decree with the amount due each month is required. This obligation will be factored into calculating your monthly residual income.
An appraisal inspection is required on all VA home loan purchases and cash out refinances. All appraisals are ordered through the VA and are assigned to a VA-approved appraiser in which the home is located. During the appraisal inspection, the appraiser will evaluate the home’s condition to make sure it meets VA standards. Any home repairs that need to be completed will be noted in the appraisal report. Once the repairs are completed, a re-inspection of the home must be done by the appraiser at an additional cost.
For a detailed explanation of how bankruptcy may affect your VA home loan, please visit our VA Loans FAQ Bankruptcy page.
The Credit Alert Interactive Voice Response System (CAIVRS) is a Department of Housing and Urban Development (HUD) computer information system that maintains information on defaults for federally-assisted loans. You must have a clear CAIVRS report in order to be considered a satisfactory credit risk. Any federally-assisted loans must be brought current or paid in full.
Cash Out Refinance
For a detailed explanation of a VA cash out refinance loan, please visit our VA Cash Out Refinance Loan page.
Certificate of Eligibility
A Certificate of Eligibility (COE) is required for a VA home loan and is available through the VA Eligibility Center. All military service-members and veterans must meet service requirements to be eligible for a VA home loan. To request a copy of your Certificate of Eligibility, please complete VA Form 26-1880.
Additional documentation may need to be submitted with your request form. Having any available copies of your NGB22 discharge certificate and/or any copies of your DD214 will help to expedite the request.
If you currently pay child support, you will be required to provide a copy of the court order detailing the monthly amount owed. Child support obligations will be calculated into your monthly residual income.
Charge Off Accounts
For a detailed explanation of how charge off accounts may affect your ability to get a VA home loan, please visit our VA Loans FAQ Credit page.
Closing costs on a VA loan are typically less expensive than other loan types because the Veterans’ Administration has set strict guidelines on what fees can be charged. The VA has restricted all origination charges (origination fees, underwriting fees, processing fees, etc) to 1%.
If you are purchasing a home using a VA home loan, the seller can contribute up to 4% of the sales price towards your closing costs. All closings costs to be paid by the seller must be negotiated as part of the initial sales price. Buyers cannot request an increase in the sales price to cover closing costs once a sales price has been agreed upon by both the buyer and the seller of a home.
For a detailed explanation of how collection accounts may affect your ability to get a VA home loan, please visit our VA Loans FAQ Credit page.
Community Property States
Known community property states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. When buying or refinancing a home in one of these states, the debts of a non-borrowing spouse must be calculated along with the borrower’s debts.
All community property states, except Arizona and Washington require the non-borrowing spouse to sign the mortgage when purchasing or refinancing a home.
For a detailed explanation of how credit may affect your ability to get a VA home loan, please visit our VA Loans FAQ Credit page.
A down payment on a VA home loan is generally not required. For Guard members, Reservists or active duty veterans who wish to purchase a home above their county’s loan limit, a down payment is required.
Veterans of the National Guard, Reserves or active duty with a VA disability rating of 10% or more are not required to pay the VA Funding Fee. The VA funding fee is waived for disabled veterans when purchasing or refinancing their home with a VA home loan.
The VA allows for up to two discount points to be paid for a lower interest rate. On VA purchase loans, discount points can be paid by the buyer or the seller, but cannot be financed into the loan. For VA refinance loans, up to two discounts points can be financed into the loan. VA cash out refinances must have equity or value to cover the discount points.
For a detailed explanation of how disputed accounts may affect your ability to get a VA home loan, please visit our VA Loans FAQ Credit page.
For a detailed explanation of how to determine your VA loan eligibility, please visit our VA Eligibility page.
For a detailed explanation of how a foreclosure may affect your ability to get a VA home loan, please visit our VA Loans FAQ Foreclosure page.
Gift funds from a borrower’s relative are allowed when using a VA home loan to purchase a home. Home buyers must provide documentation showing proof and transfer of funds to the home buyer.
Interest Rate Reduction Refinance Loan (IRRRL)
For a detailed explanation, please visit our VA Streamline IRRRL Refinance page.
IRS Tax Lien
For a detailed explanation of how tax liens may affect your ability to get a VA home loan, please visit our VA Loans FAQ Credit page
For a detailed explanation of how a judgment may affect your ability to get a VA home loan, please visit our VA Loans FAQ Credit page.
VA home loan amounts vary by county. For most counties in the United States, National Guard members and veterans can purchase a home up to $417,000 with no down payment. If you are purchasing a home over your county’s loan limit a down payment will be required.
If you are buying a new construction home, your builder must be VA-approved. To verify that your builder is VA-approved or to find a VA-approved builder, use the Veterans Administration’s Builder Search Tool. If your builder is not VA-approved, they can become approved with the completion of specific paperwork.
VA guidelines require National Guard members, active duty personnel and veterans to occupy a newly purchased property within 60 days of VA home loan closing. For service-members who are currently deployed, serving overseas or TDA; a spouse may fulfill the occupancy requirement.
For VA refinances, occupancy is required on VA cash out loans, but not on VA streamlines.
The VA requires that origination fees on a VA home loan be capped at 1% of the loan amount. Origination fees include actual origination points, underwriting fees and processing fees. These fees, whether combined or individually, cannot exceed 1%.
A pest/termite inspection is required in all states except: Alaska, Colorado, Idaho, Maine, Minnesota, Montana, North Dakota, Oregon, South Dakota, Wisconsin, Wyoming and the US Virgin Islands.
VA loan pest inspection requirements for new construction properties will require VA Form NPMA-99-A and VA Form NPMA-99-B to be completed in all states except those listed above.
For a detailed explanation of available property types and restrictions when using a VA home loan, please visit our VA Loans FAQ VA Loan Property Type page.
Residual income is used to determine VA home loan qualification of a National Guard service-member or veteran’s ability to support themselves and their dependents (if applicable). Residual income is calculated by taking the gross monthly income and subtracting the borrower(s) tax liability, monthly credit obligations and a specified amount for the home’s maintenance and utilities. The money left over each month that can be used for food, gas, etc. is the residual income. The VA has established residual income thresholds based on the region of the country and family size.
Restoration of Entitlement
If you previously used your VA entitlement and would like to purchase a new home, you must have sold your home and paid off the lender in full. If you sold your home to another veteran under the VA’s assumption clause and the buyer’s entitlement was substituted for yours, you can also request a restoration of your entitlement.
Your entitlement can be restored by completing VA Form 26-1880.
If your home is not currently connected to a municipal septic system, a septic inspection will be required. Septic systems that utilize a tank, drainage/leaching system or other method to remove waste water, must be inspected by a qualified inspector. This inspection is an additional cost to you, but is generally inexpensive.
For a detailed explanation of how a short sale may affect your ability to get a VA home loan, please visit our VA Loans FAQ Short Sale page.
VA Funding Fee
For a detailed explanation of the VA funding fee, please visit our VA Loans FAQ VA Funding Fee page.
If your home is not connected to a municipal water source and utilizes a well to provide water to your home, a well inspection will be required. A well inspection must be completed by a qualified inspector. This inspection is an additional cost to you, but is generally inexpensive.
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