Veterans Assistance (VA) was established to administer a benefit program to facilitate the adjustment of returning veterans to civilian life. The VA loan guaranty program encourages lenders to offer long-term, low-down-payment mortgages by protecting lenders against loss.
A veteran is a person who has served on active duty in the Army, Navy, Air Force, Marines or Coast Guard, and who (except for a service member on active duty) was discharged or released from active duty under conditions other than dishonorable. Eligibility is the veteran’s entitlement to VA home loan benefits under the law, based on military service.
VA Entitlement: What Is It?
All veterans start out with the same amount of entitlement. This amount may be reduced due to prior usage. Veterans must have sufficient VA entitlement to guarantee 25% of the loan, or a combination of VA guaranty, equity, or down payment to cover 25% of the loan in order to sell the loan on the secondary market.
A basic requirement of the law governing the VA home loan program is that the veteran has a bona fide intention of occupying his or her property as a principal residence.
Home loan entitlement is not being used properly if the veteran arranges to sell or convey the property to a third party prior to closing the loan.
An eligible veteran must still meet credit and income standards in order to qualify for a VA-guaranteed loan.
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