veteran mom holding son

A VA loan is one of the most widely used benefits available to veterans and service members. However, just because it’s popular doesn’t mean many service members understand how this exclusive benefit works. I’ve assembled some of the most frequently asked questions about VA loans to help you understand your benefits.

What is the advantage of a VA loan?

The biggest advantage is most likely the ability for veterans and service members to purchase a home with no money down. Additionally, there is never any monthly private mortgage insurance (PMI). VA loans are easier to qualify for than conventional loans and interest rates are generally lower as well. If you ever want to convert your home equity into cash, you can borrow up to the full appraised value of your home. This could make it easier for you to accomplish your financial, homeownership and personal goals. A VA loan is a great benefit to have.

Do disability benefits affect my eligibility to receive a VA loan?

If you are a disabled veteran, there is no reason why you should not be eligible for a VA loan. In fact, if you are disabled, you are entitled to even more benefits. Veterans receiving benefits for service-connected disabilities, spouses of veterans who died in service or from service-related disabilities, and veterans entitled to receive service-connected disability compensation are not required to pay the VA funding fee.

Can I have a co-borrower who is not a veteran on my loan?

Yes. Sometimes it helps to use both your’s and your co-borrower’s credit and income to help you qualify for the maximum required loan amount. But keep in mind, if your co-borrower isn’t a spouse or another veteran, the guaranty only applies to the veteran’s stake – roughly half – of the loan. Which means the VA guaranty will only be around 12.5% of the loan instead of the usual 25%.

What happens to my benefit if I’ve already had a VA loan before?

This is a question of entitlement. Entitlement can seem like a tricky situation at first glance, but it’s really not that complicated. You can have your entitlement restored one time only in order to purchase another home with your VA loan. In this case, you must have paid off the loan yet still own the property and want to use your entitlement to purchase a second home.

However, if you’ve paid off the loan and the property is no longer owned, you can have your entitlement restored as many times as you want. You can reuse your VA loan eligibility for every home purchase.

I’ve written more about understanding bonus entitlement in another article, where, I break it out into much greater detail.

What documents do I need to qualify for a VA loan?

Veterans and service members are required to obtain a Certificate of Eligibility (COE). If you don’t have it, you’ll need to apply for one using the VA Form 26-1880 (which will require a copy of your DD-214). Along with the COE, you will need all of the typical items required to document your credit, savings and employment information.

Does my entitlement expire?

Your entitlement does not expire. If you are on active duty, your entitlement is good to use immediately. If you’re discharged or released from active duty, a new determination of eligibility must be made based on your length of service and your type of discharge.

Who is eligible to receive VA loan benefits?

You may be eligible for a VA loan if you meet one or more of the following conditions:

  • You have served 90 consecutive days of active service during wartime
  • You have served 181 days of active service during peacetime
  • You have more than six years of service in the National Guard or Reserves
  • You are the spouse of a service member who has died in the line of duty or as a result of a service-connected disability

Can I use my VA loan for a second home?

You can most certainly use your VA loan benefits to buy a second home. But that home must be considered your primary residence in order to qualify for your loan. It gets a bit sticky here, between eligibility, entitlement and occupancy requirements, but ultimately if you are living in your second home or vacation house for more than six months of the year, you’re in the clear.

Can I use a VA loan to buy a rental property?

No. But you can use a VA loan to refinance an existing rental home you once occupied as a primary home. The VA’s Interest Rate Reduction Refinance Loan (IRRRL), also known as the VA Streamline Refinance, can be used to refinance an existing VA loan for a home where you currently live or where you used to live, but no longer do.

How do you get your eligibility back after a divorce if your spouse was awarded the home?

When the property is awarded to the spouse as a result of the divorce, entitlement cannot be restored unless the spouse refinances the property and/or pays off the VA loan in full, or if the spouse is a veteran, they substitute their entitlement for yours.

Can I use my Basic Allowance for Housing (BAH) to qualify for a VA loan?

Yes! Your BAH acts as verifiable and reliable income that helps reduce your debt-to-income ratio. Keeping a low debt-to-income ratio is a key factor that’s used when underwriters determine your qualifications for a mortgage.

What is a funding fee and why do I have to pay it?

A funding fee is the cost associated with obtaining a VA loan. It helps to ensure that the loan continues to require no down payment and have no monthly mortgage insurance. There are some cases in which the VA considers a veteran to be exempt from the funding fee: If you receive or are eligible to receive disability benefits, or if you’re a surviving spouse of a veteran who died in service or from a service-connected disability.

If you’ve had an experience using the VA loan program, please leave your comments below. We would love to see your feedback.

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This Post Has 34 Comments

  1. I have a question, my husband keeps getting paperwork about his va loan. Supposedly our ability to access our equity reserves has expired. What is this and does it really exist? This document looks suspicious in it’s generic appearance and repetitiveness of “notice number” .

    1. Shannon:

      This sounds like a scam. Equity does affect the loan amount you can get, but you don’t lose equity based on time and VA entitlements definitely don’t expire. Hope this helps!

  2. As a veteran and a contractor working overseas can my wife and daughter satisfy the occupancy requirements for a VA loan? Also what is Quicken Loans policy on this issue? Can a VA loan be obtainable.

    1. Hi Chris:

      Your wife can occupy the home if you’re on active duty. I do recommend you speak to one of our home loan experts by calling (888) 980-6716. We would be happy to work with you.

      Thanks,
      Kevin Graham

  3. I am a Fully disabled Vet(not service connected) and 86 yrs old. My Wife 85 is blind, and a Leukemia patient. We have decided against Assisted Living Arrangements if our Son and his wife can be our caregivers. Can they be co-owners on a V A purchase loan ? Neither of our present homes are suitable for the type of arrangements of Patients and Caregivers we will need. We will leave them the home after we die. Thank you
    Chief Petty Officer (SEAL) Robert F Sullivan USN -Ret

    1. Hi Robert:

      I’m very sorry to hear about you and your wife. I hope she kicks leukemia’s butt.

      In your case, it sounds like the type of loan you’re looking for is a VA joint loan. It is possible to get these, but they require the prior approval of the VA in order for your son and his wife to be on the loan or title. I should note that, unfortunately, we don’t do these particular types of loans. However, it is possible and knowing the loan type should help you find a lender that can work with you. Thank you very much for your service!

      Thanks,
      Kevin Graham

      1. Hello Kevin,

        I am a Veteran with a V.A. loan and I am on S.S.D.I. because I lost my eyesight to a rare hereditary eye disease in 2001 when I was thirty-one years old. My question is this. Do I have to pay the V.A. Funding fee again if I decide to purchase a new home or do another re-fi since I am on Social Security Disability? This makes a big difference as you know and I will not purchase another home if I have to pay the V.A. Funding fee. I do not need to re-fi, but I would concider purchasing another home if I do not need to pay the V.A. Funding Fee because I am disabled and on 100% S.S.D.I.. Thank you for helping me with this question. My e-mail address is **********************

        Steve

        1. Hi Steve:

          I’m removing your email address to protect your privacy. Unfortunately, in order to have the funding fee removed you have to be on VA disability. To receive that, your disability must be service-connected. That being said, we may have other low down payment options that you could consider and there’s also the option of having the funding fee rolled into the loan. We are closed tomorrow for Christmas, but I think it would be worthwhile for you to speak with one of our Home Loan Experts to at least go over your options. You can get in touch with us at (888) 980-6716. Thank you for your service and happy holidays!

          Thank you,
          Kevin Graham

  4. My daughter and her boyfriend who have been living together for the past 5 years. Both are in their early fifties and don’t plan to marry. However they do plan on living together for ever. Question her boyfriend is eligible for a VA loan. I known my daughter can not be on the mortgage; however, can she been on the title of the house.

    Thanks,
    Bob Royer

    1. Hi Bob:

      It looks like your daughter could be on the loan and title of the property with the prior approval of the VA. However, we don’t personally do loans requiring this approval unless it’s an interest rate reduction refinance loan and she was previously on the title or loan. I hope this helps at least give you a little more information.

      Thanks,
      Kevin Graham

    1. Hi Norveta:

      You could potentially do a cash-out refinance and use the equity built up in your current home to build a garage. If you would like to do an online approval, you can check out Rocket Mortgage. Otherwise, one of our Home Loan Experts would be happy to take your call at (888) 980-6716. Hope this helps!

      Thanks,
      Kevin Graham

    1. Hi Helene:

      A relative can put down money toward the down payment. Depending on the size of the down payment, it may lower your interest rate which would make your payment lower. I hope this answers your question.

      Thanks,
      Kevin Graham

  5. Hello! I am a retired Navy but also receive disability. Our current home is titled under my name and also my daughter’s name, who is a civilian. Would we qualify for a VA loan or would the title have to be only under my name to do so? Thank you for your time.

    1. The mortgage and title can both be in both your names as long as one of you qualifies. You do have to have a certain amount of service time in in most cases unless your disability is service related in order to qualify for the VA loan. I’m going to recommend you talk to one of our Home Loan Experts to go over your options. You can reach them by filling out this form or calling (888) 980-6716. Thank you very much for your service!

      Sincerely,
      Kevin Graham

  6. I’m kinda sitting on the fence on whether to pull the trigger or not. I’ve rented since I got out in 1999. We are considering purchasing but I don’t know everything that a loan can cover. Since we rent, we don’t have our own appliances and stuff that could be useful with a home purchase.

    What all is covered when purchasing a home with a VA loan besides the stuff I’ve seen in the FAQs?

    1. Hi Dennis:

      A VA loan just covers the home itself. However, you don’t have to put down a down payment since it’s VA and you could use that money for appliances and other things you’ll need. I hope this helps answer your question.

      1. Thanks Kevin. That does help me out. Still a lot of questions, but it’s probably the jitters.

        Maybe if I gave a little more info, you could answer better than you have already?

        I would also be a first time home buyer too. I am trying to figure out what all I would pay out of pocket if I wanted to pull the trigger and try to purchase our first home. I am not familiar with all the terms used when buying.

        Any and all help is appreciated again.

        Thanks

        1. Hi Dennis,

          The amount you have to bring to the table is unique to every loan and we would be able to look into this more if you talk to one of our licensed mortgage bankers. That’s what I’m going to recommend today. You can get the process started by either filling out this form or calling 888-728-4702.

          Thanks,
          Kevin

  7. I wish all veterans served this country in the name of freedom they can get their veterans benefit.
    Not a victim of corruption & scams.

    1. Hi Victor:

      We agree! I see that you’ve been working with us. Is there anything we can help you with? Have a great day!

      Thanks,
      Kevin Graham

  8. I purchased a home with my VA loan, in Anchorage Alaska, a little over a year ago, and I recently received a job offer I can’t refuse to return to Texas. I would like to sell the house, but I need to get it paid down a little further, so I plan on renting it out for a year or possibly two. Would I be able to use my VA loan again in Fort Worth Texas before I sold the house in Anchorage?

    1. Hi Kevin:

      Unfortunately, your VA entitlement is not restored until you sell the original property. However, we can certainly help you look at other options. If you email Michelle@Quickenloans.com, including your full name, preferred phone number and the fact that you’re looking to buy in Texas, I can put you in touch with one of our Home Loan Experts. Alternatively, if you would like to get started over the phone, you can call 800-251-9080.

      Thanks,
      Kevin Graham

    1. Hi Mary:

      You can use it for certain things, but there are restrictions and it depends on your particular situation. I’m going to have someone reach out to go over this in further detail and look into your circumstances.

      Thanks,
      Kevin Graham

  9. Times have changed for the better. When my husband cam home from Vietnam There were no parades, no thank you. He did get spit on and called a baby killer !!!

  10. LifeAnt, We do. I am a combat injured vet and I get free medical for life, compensation for injuries and there are tons of PTSD and substance abuse resources available for free. Many either choose not to use or are not aware how to use.

  11. I fully believe that veterans deserve much more than just a thank you for teir service. I also believe that veterans should get free medical care if injured in the battlefield, free post-combat stress and drug and alcoholism relief. It’s stressful and dangerous in the battlefield, but going back home for some veterans can also be a struggle. They are left without jobs and have to fend for themselves and their families. Veterans should receive free job training also so they can continue their life hopefully with prosperity and well-being.

    1. I fully agree with you that we should support veterans in whatever way we can on a continuing basis. Have a great day!

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