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VA Home Loans in Scottsdale, AZ

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VA Purchase Home Loans: Are You Eligible?

Mortgage for Rental Property

In 2020, there was more than $375 billion in funding secured through VA loans.

Buying a house is a stressful process any consumer can go through. Luckily for current and former US military veterans, there is the VA loan.

With the US Department of Veterans Affairs’ (VA) help, there are other low-cost mortgage options for qualifying active military or veteran families. VA purchase loans are available across the country to qualified buyers.

First introduced as part of the GI Bill, VA loans have grown exponentially in popularity as of late. They are especially popular with younger generations who tend to look for non-traditional financing to purchase homes.

There are also non-monetary benefits to using this route for securing a home loan. For example, the VA will sometimes vet new communities before the buyer moves in. This way, they can determine if the community is suitable for veterans with disabilities.

Whether it be a VA purchase loan or a refinance, there are various benefits to the VA mortgage. Keep reading to learn more about these loans and who can qualify.

VA Interest Rate Reduction Refinance Loan

What Are VA Loans?

VA loans are mortgages provided to veterans and active-duty service members who meet specific qualifications. It can sometimes apply to widowed military spouses.

The loans are originated by private lenders and are government-backed through the VA. The veteran pays an upfront “funding fee” as part of the loan, which reduces risk, and lenders can offer more favorable terms than many other traditional mortgages.

There are various types of VA loans:

VA Purchase Mortgage

The VA purchase loan is a VA loan to buy a home that is new to the buyer.

It does not require a down payment and has no cap on the loan amount of the home. Though, individual lenders may still place a limit on how much they will approve buyers for.

Native American Direct Loan (NADL)

These loans are less common, as they only apply to a small percentage of the population—Native American veterans. NADL funds help those who qualify to purchase, build, renovate, or refinance a home that sits on federal trust land.

Rehab/Renovation Loans

Veterans and current service members can also seek VA loans for rehab or renovations. These loans cover the costs of home improvements on an existing home.

Interest Rate Reduction Refinance Loan (IRRRL)

This option is also known as “VA Streamline Refinance.”

Using an IRRRL is a great way for qualifying service members to refinance their existing mortgage. It allows veterans to take advantage of lower interest rates—thus reducing the monthly mortgage payment.

This option may not even require an appraisal or credit underwriting. However, it’s important to note this loan strictly reduces interest rates and therefore does not allow for withdrawing cash held in home equity.

VA Cash-Out Refinance Loan

A VA cash-out refinance loan is another option to refinance an existing mortgage. It allows for extracting equity out of the home, unlike the IRRRL option. It also provides for the flexibility to turn a conventional loan into a VA loan.

What Are the Qualifications for VA Loans?

With such generous benefits to VA purchase loans, there are also specific guidelines. They include the length of service requirements for each type of service and an “Honorable Discharge.”

They are to benefit those that have risked their lives in support of the United States. As such, it’s only available to those that can prove their service.

Generally speaking, VA loans are available to those who can obtain a VA Certificate of Eligibility (COE). These can be obtained through the VA website, by mail, or directly through your mortgage lender.

From there, eligible buyers will also receive their “Entitlement.” The “Entitlement” is the value for which the VA guarantees a loan. However, lenders can sometimes loan up to four times this amount.

Eligibility is narrowed down to service members who were honorably discharged and have their Form DD214. In place of this, active-duty military members can provide a signed statement of service.

This statement includes:

  • Legal name
  • Date of birth
  • Social security number
  • Start of service (date)
  • Any lost time
  • Name of command

Furthermore, service members must meet one of the following classifications: 

  • 24 continuous months * OR * the full period (at least 181 days) for which you were called to active duty
  • Six creditable years in the Selected Reserve or National Guard * AND * at least one of the following must be true:
    • You were discharged honorably * OR *
    • You were placed on the retired list * OR *
    • You were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable * OR *
    • You continue to serve in the Selected Reserve
  • The surviving spouse of servicemen killed/missing in action or due to a service-connected disability

As for the applicant’s financial situation, VA loans can offer more flexible terms than a traditional mortgage. Even those with bankruptcy or foreclosure on their credit report can still be eligible for these opportunities (as long as two years have passed).

Plus, there is technically no minimum credit score requirement for this option. However, lenders still tend to look for a minimum score of 620 in most cases.

How to Request a VA Home Loan Certificate of Eligibility (COE)

A Certificate of Eligibility (COE) is the first step in your VA home loan application journey. The COE will verify that you meet all eligibility requirements for this type of financing program backed by the U.S. Department of Veterans Affairs (VA). You can request it from the VA online or through an approved lender like a bank or credit union as part of your mortgage process.

Visit https://www.va.gov/housing-assistance/home-loans to learn about VA loans and the steps for applying for one. Read what documents are required to prove qualification, and check your eligibility at: news.va.gov/116290/request-va-home-loan-certificate-eligibility before officially applying.

Gather Necessary Documentation

Requesting a Certificate of Eligibility (COE) is the first step to getting help from the VA with your home loan. However, if you’re using one of three main types of loans: purchase, cash-out refinance, “Interest Rate Reduction Refinancing Loan” (IRRRL,) or Native American Direct Loan (NADL), you’ll need some additional documents before starting this process.

A COE verifies that you meet the minimum service requirements for a VA loan and lets lenders know how much entitlement remains available on your behalf.

Gather all relevant military discharge paperwork, such as your DD214, to get started. Additionally, have handy financial information, including income sources and two months’ worth of recent bank statements with payments/deposits. This way, everything will be in order when submitting all the required forms.

Finally, review any credit reports before applying, as timely payment history usually makes up 35% of the scores most mortgage lenders use during approval processes.

Receive Electronic COE in Mailbox

If you have an online account, requesting a Certificate of Eligibility is as easy as signing into your profile. Once logged in, select the “Certificate of Eligibility” option from the menu and answer a few questions regarding where to send it.

If you’d like to receive it electronically by mail or email, indicate that preference when prompted. The VA requires applicants to submit proof of eligibility. But those documents are usually already uploaded during the signup process, so there should be no need for additional paperwork if that was done upon registration. First-time users will input their military service information on each page they visit in the future.

On average, most people who use this method receive their COE within 72 hours after submitting their request, though sometimes processing can take longer depending on certain factors. In addition, particular circumstances surrounding different cases may also affect delivery time.

Establish Online Access for Future Reference

It’s a good idea to keep track of your COE when you receive it, as well as electronic print copies or establish online access for future reference. Setting online access means you will have 24/7 real-time access to view and store your documents in one secure location. This can be done by enrolling in the VA eBenefit portal, which offers comprehensive benefits management services, or using the Document Repository Upload System.

Next Steps for Getting a VA Home Loan

It’s essential that once the Department of Veterans Affairs issues your Certificate of Eligibility, you take it to any lender offering VA loans, as they will review the certificate and begin their standard underwriting process before giving a “Conditional Approval” for your loan.

What If I Have Questions?

As a veteran, there are several ways to get help with questions from the VA (Department of Veterans Affairs):

  1. Contact the VA Customer Service Center: You can call the VA toll-free number at 1-800-827-1000 to speak with a representative who can answer your questions and provide assistance. The VA also offers a live chat feature on its website.
  2. Visit a VA regional office: You can find your nearest VA regional office using the VA’s facility locator tool on their website. At the regional office, you can speak with a representative in person, receive assistance filing a claim, and get information about available VA benefits.
  3. Use the VA’s online resources: The VA offers a wealth of information and resources on its website, including frequently asked questions, benefits calculators, and educational resources. You can also use the VA’s eBenefits portal to manage your benefits, file claims, and access other VA services online.
  4. Speak with a Veterans Service Organization (VSO): Veterans Service Organizations, such as the American Legion or Disabled American Veterans, can provide assistance and advocacy for veterans. VSO representatives are often located at VA regional offices and can help veterans navigate the VA system and answer questions about benefits.

The VA offers several ways for veterans to get help with questions and concerns. Whether you prefer to speak with someone over the phone or in person or access information online, resources are available to help you.

Here are the URLs for the sources mentioned above:

  1. VA Customer Service Center: https://www.va.gov/customer-service/
  2. VA facility locator tool: https://www.va.gov/find-locations/
  3. VA’s online resources: https://www.va.gov/
  4. Veterans Service Organizations:

What If I Have Questions About the Loan Process?

We’re here to help close your VA Loan. Please feel free to call us at (480) 699-1055 or schedule an appointment here and we’ll be happy to answer your questions about VA home loans.

Turn to the Experts for Your VA Purchase

As with any mortgage, the process of applying for a VA loan can be tricky to navigate. It’s important to consult with a trusted mortgage expert with years of experience in the industry to find the best possible loan for your situation.

In the Phoenix, AZ metropolitan area, Blake Mortgage is here to cover all of your VA loan needs.

Blake Mortgage is dedicated to helping military and veteran families obtain a VA purchase loan. With over two decades of experience, they are ready to serve you.

To inquire about VA loans or to request a mortgage quote, contact Blake Mortgage today!