Veterans

There are some real advantages to being a U.S. military veteran. Depending on length of service, and where and when somebody served, a veteran may be entitled to health benefits, education benefits and advantages in seeking employment. Almost every veteran who served just one full term is entitled to veteran's financing benefits on the purchase of a home. Veterans who served during certain specific wartime periods need even less time in active duty service.

The main type of financing for veterans is backed by the Department of Veterans' Affairs, a cabinet level department in the federal government. The loans are referred to as VA loans from the Department's prior name as a government agency, the Veterans' Administration (On rare occasion they may be referred to as DVA loans for the current name of the Department). The money to originate these loans comes from lenders (banks, savings & loans, mortgage companies, etc.). The money is not loaned or funded by the Department of Veterans' Affairs. Instead, part of each loan is GUARANTEED by the Department of Veterans' Affairs. VA financing allows a veteran to get into a home with less cash needed at settlement or closing, and at a lower monthly payment.

Before you can be approved for VA financing, you will need to provide proof of service and get a Certificate of Eligibility. A veteran can apply for their certificate online (click here), by mail or through their lender (click here for the documents you will need to provide). The main document needed in most cases is the DD214 (a copy, not the original). Current active-duty service members may also be eligible, but will need to provide additional documentation.

The benefit may be used more than once, so if you had a VA loan previously, you may still be eligible for a VA loan now. All previous VA loans must be paid off. You may own one additional home that was purchased with a VA loan, as long as that loan has been paid off (This can only be done once). If you had a VA loan on a previous home, and that loan was assumed by anyone other than another qualified veteran, that may prevent you from reusing your benefit until the original loan is paid off, because that loan is still tied to your Eligibility Certificate. If the previous property was foreclosed on or a portion of the debt was forgiven (either to you, or a buyer that assumed the loan), that may also prevent you from reusing your benefit, because the original loan was not paid off. A veteran may be eligible for a partial benefit in some circumstances, if they did not use their entire eligibilty amount on their previous purchase, even if the original loan has not been paid off yet. To determine if they are in this category, they should speak with a qualified loan officer.

©2012 Douglas R. Barry