VA Loan FAQ’s

Questions that frequently arise regarding eligibility for a VA loan.

  • 1. Are there income or credit requirements for a VA loan?

    Yes, you must meet VA and lender income and credit requirements to qualify for a VA loan.
  • 2. Do I need to meet other requirements, other than income and credit requirements, to be eligible for a VA loan?

    Yes. You must meet specific service requirements to be eligible for a VA loan.
  • 3. Are the eligibility requirements for a VA loan the same whether you served during a wartime period or a peacetime period?

    No. There are a different set of criteria for service during wartime periods and service during peacetime periods.
  • 4. What are the eligibility requirements for service during wartime periods?

    If you served during wartime period prior to September 7, 1980 (enlisted) or October 16, 1981 (officer), you must have at least 90 days of active duty and you must not have been discharged under dishonorable circumstances.
  • 5. What are the eligibility requirements for service during peacetime periods?

    If you served during a peacetime period prior to September 7, 1980 (enlisted) or October 16, 1981 (officer), you must have served at least 181 days of continuous active duty service and you must not have been discharged under dishonorable circumstances.
  • 6. What if I served less than 90 days during a wartime period or less than 181 days during peacetime period prior to September 7, 1980 (enlisted) or October 16, 1981 (officer)?

    If you served less than 90 days during a wartime period or less than 181 days during peacetime period and it was due to a service-related injury or disability, you may still qualify for a VA loan.
  • 7. What are the wartime service periods prior to September 7, 1980 (enlisted) or October 16, 1981 (officer)?

    The wartime service periods are as follows:

      * WWII: September 16, 1940 to July 25, 1947

      * Korean: June 27, 1950 to January 31, 1955

      * Vietnam: August 5, 1964 to May 7, 1975
  • 8. What are the peacetime service periods prior to September 7, 1980 (enlisted) or October 16, 1981 (officer)?

    The peacetime service periods are as follows:

      *July 26, 1947 to June 26, 1950

      * February 1, 1955 to August 4, 1964

      * May 8, 1975 to September 7, 1980 (enlisted)

      * May 8, 1975 to October 16, 1981 (officer)
  • 9. What are the service requirements if I served after September 7, 1980 (enlisted) or October 16, 1981 (officer)?

    If you served after September 7, 1980 (enlisted) or October 16, 1981 (officer), you will need to meet one of the following conditions to be eligible for a VA loan:

      * You must have completed at least 24 months of continuous active duty and you must have been discharged under honorable conditions.

      * You must have completed at least 181 days of active duty and have been discharged due to hardship, early out or have been diagnosed with a compensable service-related disability.

      * If you were discharged with less than 181 days of continuous service, it must have been due to a service-related disability.

      * You may be eligible for a VA loan if you were discharged due to an involuntary reduction in force, qualifying medical conditions or at the request of the government at its convenience.
  • 10. Are eligibility requirements different for Gulf War vets?

    Yes. If you served in the Gulf War, you must meet one of the following requirements to qualify for a VA loan:

       * You must have completed 24 months of continuous active duty or, if less than 24 months, must have served for the full period (a minimum of 90 days) for which you were called or ordered to active duty and you must have been discharged under honorable circumstances.

       * You must have completed at least 90 days of active duty and discharge must have been due to hardship, early out or a service-related disability.

       * If you were discharged with less than 90 days of service, your discharge must have been due to a service-related disability.

       * You may be eligible if you were discharged due to an involuntary reduction in force, if you meet certain medical requirements or if the government requested your discharge at its convenience.
  • 11. What if I am currently on active duty?

    If you are currently on regular active duty (active duty for training purposes does not qualify) you are eligible for a VA loan after you have served for 181 days (or 90 days during the Gulf War), unless you were previously discharged from a qualifying period of active service.
  • 12. What if I’m a Selected Reserve or National Guard?

    If you are not eligible under other VA guidelines, your participation in the Selected Reserve or National Guard will provide you with eligibility for a VA loan after a total of 6 years of service assuming that you are a member of an active unit and you attended all required weekend drills as well as the required 2-week active duty training. You must also meet one of the following requirements:

       * You were discharged under honorable circumstances.

       * You were placed on the retired list.

       * You were transferred to the Standby Reserve or the Ready Reserve after honorable service.

       * You continue to serve.

    If you completed less than 6 years of service, you may still be eligible for a VA loan if you were discharged for a service-related disability.
  • 13. Does anyone else other than a military veteran qualify for a VA loan?

    Yes, in certain circumstances United States citizens who served in the armed forces of a United States ally in WW II may be eligible for a VA loan. Also, certain individuals serving as officers in the Public Health Service and cadets and midshipmen at military academies may also qualify as well as officers of the National Oceanic & Atmosphere Administration and merchant seamen with WW II service. If you think you may qualify for a VA loan but are not a military veteran, call us at 808.792.4251 and we will be happy to assist you.
  • 14. Are spouses eligible for VA loans?

    The unmarried spouse of a veteran who died in service or from a service-related injury or disability or the spouse of a service person who is missing in action or a prisoner of war may be eligible for a VA loan. If you feel you may qualify for a VA loan under these circumstances, please call us at 808.792.4251.

* Please note that applications involving anything other than an honorable discharge will require further processing by the VA to determine whether or not the service was under honorable conditions.

Questions that frequently arise regarding Pre Loan for a VA loan.

  • 1. What is a VA loan?

    When people talk about VA loans, they are usually referring to guaranteed home loans given to eligible veterans by private lenders. These loans are guaranteed by the Department of Veteran Affairs.
  • 2. Why should I pursue a VA loan?

    There are many reasons why you should pursue a VA loan. First and foremost, VA loans allow home buyers to purchase a home with little or no money down. Other benefits to consider include:

      * A buyer can assume your loan if you decide to sell your home.

      * The elimination of mortgage insurance premiums.

      * Potentially lower closing costs.

      * No pre-payment penalties.

      * The potential to negotiate the interest rate.

      * Possible home warranties for a home inspected by VA during construction.

      * Possible VA assistance due to temporary financial hardships.
  • 3. What does “guaranty” mean?

    All VA home loans are guaranteed by the Department of Veteran Affairs. If a borrower of a VA loan should default, the Department of Veteran Affairs compensates the lender for any loss due to the non-payment of the loan. This reduces the lenders risk and allows borrowers who are eligible for VA loans to get a home with little or no money down.
  • 4. Does the VA guarantee the house too?

    It is important to understand that a VA guaranty has nothing to do with a home warranty or the condition of the home you are buying. The VA guaranty is simply protecting the lender in the event that you default on the loan. The VA can not guarantee that the home is in good condition or free from defects and it can not guarantee that you will be satisfied with the home. It is your responsibility to pay for a home inspection to ensure that the home is in good repair.
  • 5. What is an “entitlement”?

    The “entitlement” is the maximum dollar amount the VA will pay the lender if you default on your loan. The standard VA entitlement is $36,000. However, there are some circumstances in which a borrower can qualify for an entitlement of up to $60,000. Lenders will usually offer a loan amount of up to four times the amount of the borrower’s entitlement without requiring a down payment.
  • 6. Is my entitlement a gift?

    No, you have to pay your mortgage just as you would if the entitlement didn’t exist. The entitlement is there to protect the lender, not to act as a grant or a gift. If you do not make your monthly mortgage payments, the lender will foreclose on the property and you will lose your home.
  • 7. If I am eligible for a VA loan, am I guaranteed to get one?

    No, you are not. Just because the VA will guarantee your loan does not mean the lender is required to extend the loan to you. All lenders follow specific underwriting guidelines and you must fall within those guidelines to qualify for a loan. You must also meet VA income and credit rating standards to receive a VA loan. If you meet VA requirements, but do not meet lender requirements, you can always try to find a lender more lenient in their underwriting policies.
  • 8. Is my bankruptcy going to prevent me from getting a VA loan?

    Bankruptcy itself will not stop you from qualifying for a VA loan. However, there are some guidelines that your bankruptcy must meet one of the following requirements:

      * Your bankruptcy must have been discharged more than 2 years ago; or

      * Your bankruptcy must have been caused by circumstances beyond your control, must have been discharged between 1 and 2 years ago and you (and your spouse, if applicable) must have re-established satisfactory credit since then.
  • 9. Will there be a price limit set on the home I can buy with a VA loan?

    When buying a home with a VA loan, there is no price limit set on the home you can buy. However, it is important to remember that if you want to get into a home without a down payment, lenders will usually only give you up to four times the amount of your VA entitlement. If, on the other hand, you have money that you are able to use for a down payment on your home, the dollar amount of the loan you qualify for will increase appropriately. The VA loan limit in Hawaii is $625,500.
  • 10. Am I restricted to what type of home I can buy with a VA loan?

    Yes, you must be purchasing the home as your own primary residence. VA loans can not be used to purchase investment properties or commercial properties. When you obtain a VA loan, you will be required to certify that you intend to occupy the home you are buying. Also, not all condominiums are eligible for VA financing. To check if a certain condominium is eligible, please visit our Condo Eligibility Check page.
  • 11. Am I restricted in regards to where I can purchase property?

    Yes. VA loans can only be used to purchase properties located in the United States or within United States’ territories and/or possessions.
  • 12. Where can I get a Certificate of Eligibility to prove to lenders that I qualify for a VA loan?

    To obtain your Certificate of Eligibility, you need to fill out a VA Form 26-1880 and submit it to the Department of Veteran Affairs Eligibility Center at PO. Box 20729, Winston-Salem, NC 27120 or contact us to submit it on your behalf using the automated ACE system.
  • 13. How do I buy a home using a VA loan?

    There are a number of steps involved when buying a home with a VA loan. First, you must confirm that you are eligible for a VA loan by obtaining your Certificate of Eligibility. Then, the following steps are completed accordingly:

      * Get Qualified:
    Fill out the online application form on the top left hand corner of this page or call a VA Loan Specialist at 808.792.4251. A VA Loan Specialist will determine how much you qualify for as well as your estimated monthly payments.

      * Find a Real Estate Agent:
    If you don’t already have a real estate agent, go to our Find An Agent section to review our list of qualified agents that can help you find the home of your dreams.

      * Narrow Down List of Properties:
    Based on the amount you’re prequalified for, your Realtor will send you a list of properties that fit your specific criteria. From that list, you’ll need to narrow it down to a select few so that your Realtor can schedule a showing with the seller’s agent. Keep in mind that not all condominiums are eligible for VA financing, so if you are thinking of purchasing a condo, first check our Condo Eligibility Check page to see if your particular condo is approved for VA financing.

      * View Properties:
    Once you narrowed down the list, it’s time to see the properties for yourself. This is where you can really decide which home will be the best fit for you and your family.

      * Submit an Offer:
    Once you decide which house you would like to purchase, your realtor will draft up an offer which will be accompanied by a prequalification letter from your VA Loan Specialist.

      * We’ll do the Rest:
    Once the offer is accepted, sit back and relax as your VA Loan Specialist, Realtor & Escrow Officer handle the nuances of your purchase transaction. The process typically takes 30-45 days. After which, you will come in and sign the final loan documents. When this is all done, you will get your keys and officially be a new homeowner. It’s that simple!
  • 14. Why is there a fee associated with getting a VA loan?

    The law stipulates that you must pay a VA funding fee when obtaining a VA loan. This fee helps offset the government’s and taxpayer’s expenses in providing this benefit.
  • 15. This is the second time I’m buying a home with a VA loan. Why is the fee higher?

    If you’re taking out a second VA loan without making a down payment on the home you are purchasing, the fee will be higher this time around. This is because you already received the benefit of the VA entitlement and you are now taking advantage of the benefit a second time. If you want to reduce the amount of this fee you can do so by paying a down payment of at least 5 percent. If you pay a down payment of no less than 5 percent, you will be entitled to a reduced funding fee of 1.5 percent. If you pay a down payment of no less than 10 percent, the funding fee you pay will only be 1.25 percent. (Please note that National Guard and Reservist veterans will be required to pay a higher funding fee percentage as seen in this funding fee table.)
  • 16. I am a single veteran currently stationed outside of the US and would like to use a VA loan to purchase a home. The VA is telling me that I can’t do this even if I have a friend or family member occupying the home while I am out of the country. However, if I had a spouse, he or she could occupy the home and I could purchase it while I was out of the country. Isn’t this discrimination against veterans who aren’t married?

    No, it isn’t discrimination. The law stipulates that a veteran’s spouse can satisfy the occupancy requirements of a VA loan. The law states nothing about friends or relatives and therefore does not provide for this situation. Because of this, only a spouse can satisfy a veteran’s occupancy permit.
  • 17. Can I buy a home with someone who isn’t a veteran and isn’t my spouse?

    Yes, you can purchase a home with someone who is neither a spouse nor a veteran, but the VA guaranty will only apply to the veteran’s portion of the loan. You will need to talk to your lender to see if this type of loan arrangement would be acceptable to them and what restrictions they may place on your loan.
  • 18. If I die before the loan is paid in full, will the VA pay off the balance of my loan?

    No, VA loans do not include a death benefit. If you die, your spouse or co-borrower will need to continue the payments of the loan or the home will go into foreclosure. You can, however, purchase a mortgage life insurance policy. A mortgage life insurance policy, available from private insurance companies, would pay off your mortgage in the case of your demise.

* Please note that applications involving anything other than an honorable discharge will require further processing by the VA to determine whether or not the service was under honorable conditions.

Questions that frequently arise regarding eligibility for a post loan.

  • 1. I’m having trouble making my payments. What should I do?

    When it comes to payment problems, communication is very important. You need to contact your lender as soon as possible to let them know that a payment will be late, why it will be late and how you plan on rectifying the situation. You can also contact the VA, who may be able to help you arrange a repayment plan.
  • 2. I’ve heard of VA refunding. What is it?

    “Refunding” is a term used when the VA purchases a loan from a private lender. It is a very rare occurrence. If, for reasons beyond your control, you missed some loan payments but were able to make them now or in the near future and your current lender wasn’t willing to work with you, the VA could purchase your loan from the lender and you would pay the VA directly.
  • 3. There are serious problems with the condition of the home I purchased. Didn’t the VA inspect the property when performing the appraisal?

    It is true that an appraiser inspected your property prior to the funding of your VA loan; however, that appraisal was not meant to serve as a property inspection. The VA can not help you with problems related to the condition of your home. That is why all home buyers are advised to hire an independent property inspector prior to the purchase of a home.
  • 4. I used my VA loan to purchase a brand new home and it was inspected by the VA during the construction process. However, there are serious issues with the home that the builder is not taking care of. Can you help?

    If the VA inspected your home during the construction process there is a complaint procedure that you can follow. This process is in place in an attempt to get the builder to address and correct any construction defects. If the VA finds that the complaints are legitimate, the VA can then request that the builder take actions to correct the issues. The VA can not force a builder to correct the problems if he or she chooses not to. The VA will, however, take administrative sanctions against builders that do not cooperate and can refuse to do business with those builders in the future. It is important to remember that any such complaints must be filed within 12 months of ownership of the home. If the builder does not comply with VA requests, you may opt to pursue civil litigation against the builder.
  • 5. I don’t agree with the escrow payments my lender is charging. Can you do anything about them?

    The VA does not regulate escrow payments. The only thing the VA mandates is that all lenders make sure that property taxes are paid and that there is insurance coverage on the property. While many lenders will use escrow accounts to see that these requirements are met, the VA does not control how these escrow accounts are managed. If you feel that you are being charged unfair amounts for escrow, you may want to consider contacting the US Department of Housing and Urban Development (HUD).
  • 6. Is my VA loan eligible for refinance?

    It is possible to refinance a VA loan should the need arise. You will, however, have to meet the lender’s requirements for refinance. For more information of refinancing your VA loan, contact a VA Loan Specialist at 808.792.4251.
  • 7. How much does it cost to refinance a VA loan?

    Fees range between one-half of a percent to three percent depending on the specific circumstances of your VA loan.
  • 8. Am I going to have a problem selling my property because I have a VA loan?

    The fact that you have a VA loan should have no impact on your ability to sell your home at any point in the future. The only time the VA would have any say in the sale of your home is if your buyer was assuming your VA loan and your original purchase of the home closed after March 1, 1988. In this case the VA would review the qualifications of the buyer to see if they met the lending requirements.
  • 9. Am I automatically released from the responsibility of my VA loan if I sell my home to someone who assumes the existing loan?

    No you are not. If your loan was closed after March 1 of 1998 you must notify the lender or the VA so that they can approve your buyer. If your loan was closed before March 1 of 1998, you can have the buyer assume your loan without VA or lender approval. However, it is generally advised that you contact the VA for approval regardless of the date of your loan closing so you can receive a release of liability should the buyer default on his or her loan agreement.
  • 10. If I obtain a release of liability, will the restoration of my entitlement be automatically granted to me?

    No, it won’t. Your buyer will need to meet credit and income requirements and will also need to be a veteran with entitlement that can substitute the entitlement used by you when you obtained the original loan.

  • 11. What is a VA compromise claim and how does it work?

    If you need to sell your home and are unable to get enough money from the sale to pay off the existing loan on the home and you have no other way to pay off the loan, the VA can issue a payment for the difference. This is called a VA compromise claim. When a VA compromise claim is issued, you will still be liable for the amount of money the VA paid on the claim, however, the compromise claim payment is usually much less than what you would have lost if the sale of your home had fallen through or if your property had been foreclosed on.
  • 12. If I die before my loan is paid in full, will the VA pay off my mortgage?

    No, a VA guaranty is not a mortgage life insurance policy. If you want your mortgage to be paid off in the event of your death, you will need to purchase a mortgage life insurance policy. They are available from private insurance companies.

* Please note that applications involving anything other than an honorable discharge will require further processing by the VA to determine whether or not the service was under honorable conditions.