General Rules for Eligibility

Military Service Requirements for VA Loan Eligibility:

Note: Applications involving other than honorable discharges will usually require further development by VA. This is necessary to determine if the service was under other than dishonorable conditions.

Wartime – Service During:

WWII: 9/16/1940 to 7/25/1947

Korean: 6/27/1950 to 1/31/1955

Vietnam: 8/5/1964 to 5/7/1975

You must have at least 90 days on active duty and been discharged under other than dishonorable conditions. If you served less than 90 days, you may be eligible if discharged for a service connected disability.

Peacetime – Service during periods:

7/26/1947 to 6/26/1950

2/1/1955 to 8/4/1964

5/8/1975 to 9/7/1980(Enlisted)

5/8/1975 to 10/16/1981 (Officer)

You must have served at least 181 days of continuous active duty and been discharged under other than dishonorable conditions. If you served less than 181 days, you may be eligible if discharged for a service connected disability.

Service after 9/7/1980 (enlisted) or 10/16/1981 (officer)

If you were separated from service which began after these dates, you must have:

Completed 24 months of continuous active duty or the full period (at least 181 days) for which you were ordered or called to active duty and been discharged under conditions other than dishonorable, or Completed at least 181 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1171 (Early Out), or have been determined to have a compensable service-connected disability; Been discharged with less than 181 days of service for a service-connected disability. Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions, or, in some instances for the convenience of the Government.

Gulf War – Service during period 8/2/1990 to date yet to be determined

If you served on active duty during the Gulf War, you must have:

Completed 24 months of continuous active duty or the full period (at least 90 days) for which you were called or ordered to active duty, and been discharged under conditions other than dishonorable, or

Completed at least 90 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1173 (Early Out), or have been determined to have a compensable service-connected disability, or

Been discharged with less than 90 days of service for a service-connected disability. Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions, or, in some instances, for the convenience of the Government.

Active Duty Service Personnel

If you are now on regular duty (not active duty for training), you are eligible after having served 181 days (90 days during the Gulf War) unless discharged or separated from a previous qualifying period of active duty service.

Selected Reserves or National Guard

If you are not otherwise eligible and you have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and

Were discharged with an honorable discharge, or

Were placed on the retired list, or

Were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service, or

Continue to serve in the Selected Reserves

Individuals who completed less than 6 years may be eligible if discharged for a service-connected disability.

You May also be determined eligible if you:

Are an unremarried spouse of a veteran who died while in service or from a service connected disability, or

Are a spouse of a serviceperson missing in action or a prisoner of war

Note: Also, a surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003, may be eligible for the home loan benefit. However, a surviving spouse who remarried before December 16, 2003, and on or after attaining age 57, must apply no later than December 15, 2004, to establish home loan eligibility. VA must deny applications from surviving spouses who remarried before December 6, 2003 that are received after December 15, 2004.

Eligibility may also be established for:

Certain United States citizens who served in the armed forces of a government allied with the United States in WW II.

Individuals with service as members in certain organizations, such as Public Health Service officers, cadets at the United States Military, Air Force, or Coast Guard Academy, midshipmen at the United States Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with WW II service, and others.

Related posts:

1. Eligibility Frequently Asked Question
2. NO B.S. Certificate of Eligibility Testimonial
3. NO B.S. Certificate of Eligibility Testimonial
4. VA Loans – An Overview
5. Understanding YOUR VA entitlement numbers

Did you know that aside from buying or building a new home, veterans can actually use VA loans for home improvements?  Everybody knows that updating a home can cost a lot of money but if you’re a veteran who is eligible for a VA loan can borrow as much as 90% of your home equity and use it for home improvements.  This is something a veteran should take advantage of because of the VA loan’s advantages.  But just like a typical VA loan application, one has to submit the necessary requirements and prove eligibility.

So why should you consider a home improvement?

For one, it increases your home equity.  Of course it also adds comfort and value to your home.  Now what types of home improvement projects can you work on?  Here’s a quick checklist of what you can do.

• Roof Repairs – This is probably one of the best ways to use your VA loan since large improvements like roof repairs cost a lot of money.  Installation of shingles or replacement of old ones cost somewhere from $2-$4 per square foot while flashing around the chimney costs about $300-$500.
• Flooring repairs – Another great way to spend your VA home improvement loan is by installing or repairing your home’s flooring.  With your loan you can have your floors sanded and finished or you can install a ceramic or vinyl floor or install a wall-to-wall carpet.  The costs usually range from $1.50 to as much as $22 per square foot for the services mentioned above.
• Heating and Air Conditioning installations – Replacing the heating and air conditioning system costs somewhere from $1,500 to $4000 but if you are only going to install a humidifier or an air cleaner, it’s priced at $300-$700.
• Bathroom remodeling - Statistics show that bathroom remodeling adds more value to a home.  A typical bathroom remodeling ranges from $7,000 to as much as $16,000.  Why is it so expensive?  Though the bathroom is not the biggest room in the house, when it comes to renovation you have to call different people to remodel it – plumbers, electricians, tile contractors, sheet rock contractors, etc.
• Kitchen remodeling – Based on annual realtor group polls, it was found that kitchen remodeling adds the most value to your home.  (Yes, it beats the bathroom remodeling numbers.)  This type of remodeling starts from $8,000.  You can update your countertops, the sink, cabinets, range, oven, the dishwasher, fridge, and microwave.

It is still more cost-efficient to repair and update your home than move into a new one.  Better get started and apply for a VA home loan so you can enjoy the benefits of a newly improved home.

Related posts:

1. VA Construction Loans
2. Build Your Dream Home Using Your VA Loan.

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Thinking of building a home and wondering if you can use a va home loan for financing? If you are a veteran then you may have this option available and getting a new home built may be easier than you think.

Basic VA home loan requirements:

• Serve or have served in the US Military, Reserves or National Guard
• Have an honorable discharge status
• Have qualified Service Time Requirements:
• 90 or more days active duty service during active wartime
• 181 days or more of active duty service during peacetime
• Currently active duty service and meet the 90 or 181 days requirement
• Non-remarried surviving spouse of veteran who died during service or because of service related injuries
• Are approved for your credit score and can verify employment

Additional guidelines for getting a va home loan in order to build a new construction home are:

• There must be a warranty on the home
• The builder being used must be a “va-approved” builder-consult with a va home loan specialist to find a va approved builder
• Builder must posses Valid Va Builder identification number
• If your builder does not have a valid Va Builder ID # and you want the benefits of a va home loan, your mortgage professional can help get your builder approved.
• New construction must meet additional inspection requirements
• New home must meet accepted standards of good construction
• New construction must fit specifications and plans, which the va home loan appraisal is based on.

(The following 3 items must be filled out and submitted to VA prior to va home loan notice of value being issued)

1. Builder information and certification form
2. Va form 26-421 Equal Employment Opportunity Certification
3. Va form 26-8791 Va Affirmative Marketing Certification

Related posts:

1. VA Home Improvement Loans
2. Build Your Dream Home Using Your VA Loan.

In Rome, New York, 50 volunteers turned up to remodel Robert and Cathy Ross’s home. Bob Ross, a US Army veteran was chosen to have a remodel courtesy of Sears. Bob has served 22 years in the army. And now, he has two sons who also decided to follow his army footsteps. “One of my sons served 13 years and the other did seven,” Ross adds. One of his sons was recently awarded a Bronze Star for his bravery in Iraq.

In 1988, Sears started the Sears Heroes at Home Program to help fix veteran’s homes. After remodeling 100,000 homes, it is now Bob Ross’s turn. The 50 volunteers came to help the organizers from Rebuilding Together Mohawk Valley who helped secure the funding for the one day remodel. The happy couple was both very excited especially that their bathtub was replaced with a walk-in shower. “When you’re on oxygen, you get really, really tired and they’re putting in instead of a bathtub, it’s a shower and when you have to look about stepping over a bathtub, most people don’t realize how heard that is when you can’t breathe,” says Cathy Ross.

Now if you are using your VA loan to remodel or update your home, here’s a couple of useful tips before you buy, build or fix anything.

1. Get a warranty. One of the most crucial parts of constructing a home is the warranty. A ten-year warranty is required if (1) the home is proposed or under-construction or (2) the local authority did not conduct construction inspections. If this isn’t your case, then your builder must provide you a completed VA Form 26-1859 (Warranty of Completion of Construction). This form should say that your builder is giving you a one-year VA builder’s warranty. At the same time, the purchaser must also acknowledge that he/she is aware that the VA did not perform any inspections of the property during the construction by submitting a written statement.

2. Make sure that your builder has a valid VA Builder ID. The builder must provide a valid VA Builder Identification Number for properties appraised as “new construction” or “under construction” before a VA notice of value is issued. The VA Builder ID is a requirement based on the Construction and Valuation Section (C&V) of the VA Loan Guaranty Program.

3. To be eligible for appraisal as real estate, a manufactured home needs to be installed on a permanent foundation in compliance to VA requirements.

No related posts.

Just picture it…..every room is exactly as you had envisioned.   The smell of fresh paint, cut wood, and new carpet are everywhere.  Your wife finally got her ultimate wish: the walk in closet complete with storage to accommodate her 326 pairs of shoes.  As the man of the house, you have also decided to treat yourself right and build the ultimate man cave.  Key features include: the largest big screen ever known, surround sound, and a custom mini fridge built into a plush lounge area.  Brew is now within arms reach and Sundays will never be the same.  Without a doubt, your family is the envy of the neighborhood.  The Joneses are scrambling to regain their status quo.  Life is good.

You finally decide to take the next step with your VA loan in order to make this dream a reality.  You apply for construction financing, and realize your local bank is requiring you to put at least 20% down.  What?  How could this be?  “I am a veteran and I have my certificate of eligibility!” you shout. “I have been told that I qualify for 100% financing!”  “Show me the money!”  Unfortunately, nobody is listening.

Building a new custom home these days is much more difficult than it used to be.  With millions of homes IN foreclosure, and banks tightening their lending guidelines, we ponder the question: How can a person take advantage of their VA loan benefits and still get the closet space with the man cave?

In a VA loan transaction, BANKS LOAN THE MONEY, and the VA INSURES the transaction.  Because the banks have the money, and are essentially taking the risk, they decide the terms and amount of risk they are willing to accept.  In most cases, banks will error to the side of caution, and tend to be MORE conservative than VA loan guidelines.  So when the bank says they need 20% down to build a new home, this is why.

In the following paragraphs, I will show you another tactic:  How to win over the builder and use THEIR money and resources to build YOUR dream home!  You will learn how to leverage your VA loan eligibility to secure the transaction and cash out the builder upon completion.   It IS possible to get a new custom home with 100% financing.  You just need to know how.  Keep reading for the answer.

Understanding builder mentality- (The key to your success)

Builders are constantly on the hunt for new projects.  And in many cases, builders start projects BEFORE locating a buyer.  This very well known, and common practice, is called “spec. building” or “speculation.”  It’s a risky proposition, and requires the builder to invest large amounts of time and money banking on the notion the home will eventually sell for a profit.  As we now see from past experience, many builders lost big money, and some even went bankrupt when they got stuck with homes that wouldn’t sell.   It’s a huge gamble for any builder.  As a savvy buyer, your job is to align yourself with the builder and eliminate many of these risks associated with a new build.  In doing so, your offer will be very attractive and the builder WILL WANT to do business with you.

Making an offer a builder can’t refuse.

1. Approach the builder with your bank pre-approval in hand. This is a powerful first step and lets the builder know you mean business and qualify to buy the home. You may also want to give the builder the business card of your VA loan officer and even invite the builder to call the bank should they seek more information.   After all, you have nothing to hide, and doing so sets you apart from other shoppers that waste time.
2. Your next step is putting up a reasonable deposit for the new home. This will be something that both you and the builder agree is fair.  Use your head and be smart.  Your objective is putting up some cash to make your agreement binding but don’t stretch yourself too thin.  Use the fact that your already qualified for financing as a reason to keep the down payment on the small side.  Contact a realtor or real estate attorney to help you with these agreements.
3. If you own the land free and clear, or have plenty of equity, you can use this as a bargaining chip to “sweeten the deal” and add security to the builder considering your proposition. Just remember, if you tie up the land, make sure you have expert legal advice on your side and understand the ramifications of your actions.  If you fail to plan then plan to fail.
4. Another topic for negotiation is paying the interest that accrues during the construction of the home. Traditionally, the buyer is responsible to cover the interest payments during the construction period.  I recommend offering to cover the accrued interest upfront in your negotiations.  In doing so, you eliminate the only other objective many builders have by covering the loan payments while the home is under construction.  If you enter an agreement to pay interest, double check the cost breakdown on the home and make sure your not being double billed.  You may be able to LOWER the price of your home.

But I don’t have any land!

If you don’t have land, your quest for a custom built VA home just got easier!  Bringing a builder to YOUR job site is always going to be more difficult than GOING TO the job site.   So without the land issue standing in your way, just target the community you like, and then find the builder with projects already underway! Your approach with the builder will be identical to the process I described above.  Create value and eliminate risk.

Target a home that is in the very early construction stages. Just after ground breaking is ideal.  The sooner you locate a new home the better your chances for making custom changes.  The builder may ask you to cover the costs for any design changes you make.  Those costs may be architectural and engineering; but overall, paying for these changes will be much less than putting 20% down.

Once your home is about 60 days from completion, contact your VA lender to start the closing process.

PS.  I think the man cave is ready.

Related posts:

1. VA Construction Loans
2. VA Home Improvement Loans