Here’s a guest blog post for our Military friends at www.MilitarybyOwner.com:
by Monica on March 23, 2011
In 1930, the Veterans Administration was created by Executive Order S. 398, signed by President Herbert Hoover. Originally put in place to coordinate and consolidate activities affecting war veterans, the “VA” has continued to evolve through the years. Now called the United States Department of Veterans Affairs, they operate with a multi-billion dollar budget and hundreds of thousands of employees. There are many ways that the VA supports veterans and their families, to include medical, education and compensation benefits.
For military members that are looking to buy a home, the VA has a fantastic program that allows qualified veterans to obtain loans requiring no down payment, the ability to finance the fees necessary for the closing of the loan and low up-front costs. This program can make it possible for veterans to buy a home without requiring the thousands of dollars often necessary to purchase a home using a conventional loan.
“The main purpose of the VA home loan program is to help veterans finance the purchase of homes with favorable loan terms and at a rate of interest which is competitive with the rate charged on other type of mortgage loans. For VA housing loan purposes, the term “veteran” includes certain members of the Selected Reserve, active duty service personnel and certain categories of spouses.” (VA Pamphlet 26-4, Revised January 1996 – http://www.homeloans.va.gov/VAP26-4.htm)
Just as is necessary with any loan, the VA loan benefit is something that requires an application and approval process. It is always a good idea before shopping for a home to pre-qualify. If you are considering a VA loan, you must obtain a “Certificate of Eligibility” This can be done by filing out a form titled “VA Form 26-188” and then submitting it to a VA Eligibility Center. Some lenders may also be able to help you obtain these forms and a Certificate of Eligibility, if they have access to the “Automated Certificate of Eligibility” system and there is ample information regarding your service in their database.
The United States Department of Veterans Affairs has a great website that can provide you with a wealth of information about the eligibility requirements, application process, the benefits of a VA loan and some fantastic pamphlets of their own and some from from Ginnie Mae that are a great guide to help in the home buying process.