Understanding the VA Loan

Did you know that when you serve in the Military, that you have been accruing a bunch of amazing entitlements? One of the best perks (in my opinion) is the VA loan. The VA loan or better known as the Veterans Association loan is reserved for Military, Veterans, and select other labels. Currently the VA entitlement is sitting at $766,500. With a VA-backed home loan, the VA guarantees (or stands behind) a portion of the loan you get from a private lender. If your VA-backed home loan goes into foreclosure, the guaranty allows the lender to recover some or all of their losses. Since there’s less risk for the lender, they’re more likely to give you the loan under better terms. In fact, nearly 90% of all VA-backed home loans are made without a down payment. Did you also know that you only have to live in the property for 1 year, and you can rent that property out? Also, you can utilize a VA loan to house hack. If you are looking into doing house-hacking by purchasing a multi-family property, you will be entitled to utilize your VA loan.

To be entitled to use a VA loan, a few of these things must be true.

1. You served on AD for at least 90 days.
2. For Veterans, it is all dependent on the dates that you served. I will post a link in the description for you to review.
3. National Guard: 90 days of non-training active-duty service, 90 days of AD with at least 30 days consecutive
4. 6 creditable years in the NG with honorable discharge or placed on retired list
5. The same is true for reserves

There are multiple ways to request your COE or Certificate of Eligibility if you were discharged for hardship, inconvenience of government, early out, reduction, medical conditions. Also, for surviving spouses or the spouse of a veteran of a POW may be able to get a COE as well. Now, like I previously stated, you can utilize your VA loan multiple times, in fact, I have used it 3 times. Now once you hit that threshold, you will have a down payment.

Now let’s talk about the VA funding fee waiver, and who is eligible for it.

• You’re receiving VA compensation for a service-connected disability, or
• You’re eligible to receive VA compensation for a service-connected disability, but you’re receiving retirement or active-duty pay instead, or
• You’re receiving Dependency and Indemnity Compensation (DIC) as the surviving spouse of a Veteran, or
• You’re a service member who has received a proposed or memorandum rating before the loan closing date that says you’re eligible to get compensation because of a pre-discharge claim, or
• You’re a service member on active duty who, before or on the loan closing date, provides evidence of having received the Purple Heart

Getting a refund for your VA funding fee:

You may be eligible for a refund of the VA funding fee if you’re later awarded VA compensation for a service-connected disability. The effective date of your VA compensation must be retroactive to before the date of your loan closing. 

If you get a proposed or memorandum rating after your loan closing date, you’ll still need to pay the funding fee. You won’t be eligible for a refund based on this rating.

If you think you’re eligible for a refund, please call your VA regional loan center at 877-827-3702 (TTY: 711). We’re here Monday through Friday, 8:00 a.m. to 6:00 p.m. ET.