UPDATED: January 2016
The VA has made it easier for veterans to own a home through its loan program. If you have been in the military, including the National Guard or Reserves you may meet the VA Loan Eligibility.
If eligibile, you may be able to make a home purchase only requiring very little or no down payments at all. On top of this, you may even be able to obtain a much lower interest rate than you would with a Conventional home loan. Some common questions about VA loan guidelines and eligibility are:
Who Qualifies For A VA Loan?
A VA home loan is packed full of advantages that are only available to millions of service personnel and veterans. The length of your service or service commitment and duty status determines if you qualify for a VA home loan. In general, most active duty or honorably discharged service members are eligible for a VA home loan.
To be eligibility for a VA Loan you must have either:
- Served 6 years in the National Guard or Reserves
- Served 181 days during peacetime (Active Duty)
- Served 90 days during war time (Active Duty)
Note that if you are the spouse of a service member who was killed in the line of duty. A VA Interest Rate Reduction Refinance Loan (IRRRL) can only be used to refinance a property or home which the individual has already used a VA loan. The IRRRL allows you to refinance your existing mortgage without having to re-qualify for your loan. For more information about eligibility please visit http://www.benefits.va.gov/homeloans/
Benefits of a VA IRRRL
By refinancing through the VA interest rate reduction refinance loan (IRRRL) program, borrowers can expect common benefits such as:
- No out-of-pocket cost
- Does not require for borrowers to provide a new Certificate of Eligibility (COE)
- You are not required to stick with the same VA lender as the one on the original loan
- A much lower interest rate and monthly mortgage payment
- The option to refinance a primary residence, as long as you are able to certify that you previously owned the home.
Keep in mind that the VA IRRRL program does not allow for a cash-out refinance, but the anticipated outcome of a reduced interest rate or mortgage payment.
What Does A VA Loan Guarantee?
The guarantee means that the lenders are protected against loss because the VA assumes some of the risk of the loan. VA loans are not provided by the Veterans Affairs, but rather by private lenders, such as mortgage companies and banks. For more information about VA home loan lenders click here. Because VA loans are provided by private lenders, the guidelines, maximum home loan amount, and steps, all may vary slightly from state to state. All veterans must qualify because not all are eligible for the program.
How To Apply For A VA Streamline Refinance?
The VA streamline refinance program is designed to help lower rates of individuals with VA loans. To apply for a VA IRRRL you must speak with a loan officer either in person or over the phone. Loan officers will be able to help you complete the necessary paper work and answer any questions you have to apply. On average, it takes about 10-20 minutes to complete the application process. If you choose to apply over the phone with a loan officer, they will send you the paper work for your signature along with other loan disclosures that are required to apply for a VA IRRRL.
Frequently Asked Questions about VA Streamline Guidelines
Many people have questions about the VA streamline and very specific guidelines. Remember – just because it is a guideline at one lender doesn’t mean that every lender has the same guidelines. For example, just because one lender may require a minimum credit score of 640 doesn’t mean all lenders will require that same minimum credit score. Each lender will have slightly different guidelines for the streamline program which is why it is very, very important to shop around. With that said, here are some common guideline questions:
Does the VA streamline require a minimum credit score?
In 2013, many lenders have set their minimum credit score to 640 for the VA streamline. That said, not every lender has set 640 as the minimum credit score and if you have less than a 640 it is very important that you shop multiple lenders if you want to do a VA streamline. If you shop around enough, you might be surprised to learn that some lenders may not require a credit score at all!
Does the VA streamline require an appraisal?
In 2013, it is common for some lenders to have a VA streamline with appraisal program and a VA streamline without appraisal program. The key about an appraisal is that if you owe more on your mortgage than the house is worth – then you will want to get a VA streamline without an appraisal done. Not every lender will have a VA streamline without appraisal, but if you shop around you should be able to find a VA approved lender who can help you get a streamline done without an appraisal.
What are VA non allowables?
VA non allowables are charges that are associated with your streamline transaction that the VA will not let the borrower pay or they will not insure the loan. The is very good news if you are the borrower.
Do I have to work with the same lender I make my payments to if I want to streamline?
No. You can work with any VA approved lender that you would like to. In fact, if you want to get the best deal – be sure to shop multiple lenders. Rates and fees and guideline overlays are often different between VA approved lenders.
Do I have to work with a VA lender?
Yes. The lender you choose to work with must be “VA approved”.
Are there other places I can learn about the VA streamline program?
Official online sources regarding VA home loan guaranty
- Complete details about VA loans can be found here: www.homeloans.va.gov/ls.htm.
- The various VA loan forms are here: http//www.va.gov/vaforms.
- The Certificate of Eligibility information is here: www.homeloans.va.gov/eligibility.htm
- A directory of VA approved condos, PUDs and builders is here: http://condopudbuilder.vba.va.gov/2.2/frames.html.
- The latest requirements of VA loans can be found in the VA Lenders Handbook here: www.warms.vba.va.gov/pam26_7.html.
- A current list of all VA offices is here: www.homeloans.va.gov/contact.htm
Shop For a Streamline Today
The easiest way to get a quote from a VA approved lender is right here. Get a free, no obligation quote on a VA streamline from a lender who can help you answer any questions about your situation. No appraisal required lenders, no minimum credit score lenders, etc are all available now. Simply submit your information below and we will match you up with a great VA approved lender who can help you.