Buying a home can seem daunting, especially the first time, but owning property remains the greatest driver of generational wealth and eligible veterans are afforded certain benefits to make owning a home easier through the VA Home Loan Program.
Veterans, reservists and National Guard members can purchase a home or refinance an existing loan — whether it’s a VA loan or not — with no down payment.
“The no-down-payment piece is certainly the signature benefit,” said Chris Birk — vice president of mortgage insight at Veterans United, a Columbia, Missouri-based mortgage lender that specializes in VA loans. “It has been since the benefit’s inception.”
Related: Find a VA home loan
VA home loans are also exempt from private mortgage insurance (PMI), which lenders tack on as a monthly fee for conventional loans with a down payment of less than 20%. On average, that saves veterans $30 to $70 per month for every $100,000 of home value.
“That’s a huge savings,” said Terry Rouch — a Navy and Coast Guard Auxiliary veteran with three decades of experience in the home-loan business, who currently serves as the assistant director of loan policy and valuation for the Loan Guaranty Service of the Veteran Benefits Administration. “That’s what drives the whole program is literally the ability to buy a home without putting a down payment on that property. That’s why, since World War II, millions have used that.”
National Guard and Reserve members may qualify for a VA home loan if they:
- Served at least six years and were honorably discharged or retired;
- Served for 90 days or more on active duty, including at least 30 consecutive days;
- Were discharged or released from duty for a service-connected disability.
Changes to Title 32 signed into law in January 2021 made the VA loan program available to some Guard members or reservists who were previously ineligible, so it doesn’t hurt to check even if you’ve been denied eligibility in the past.
“It (changes to the law) opened up the aperture for thousands of new veterans that can purchase homes or refinance,” Rouch said.
There is no minimum credit score required for a VA loan, though most lenders require a score of 620 or higher, and there is no limit on the amount a veteran can borrow, though the average home purchase with a VA loan is roughly $310,000, according to Rouch.
Here are some other tips, if you’re considering using the VA Home Loan Program:
Do work with people you trust
Especially for first-time homebuyers, working with a lender and real estate agent can make the process much smoother. Finding a lender — credit unions, banks …….