VA Loan Eligibility and Financing

This is the third in a series of posts about VA loans. Military homebuyers across the country continue to flock to VA loans. These flexible, low-cost loans have helped almost 20 million veterans become homeowners since World War II.

The government guarantees about a quarter of a borrower’s mortgage, giving approved lenders a greater degree of security. In turn, that security often leads to excellent loan terms for qualified veterans.

On the whole, VA loans are typically easier to qualify for than conventional loans. They also come with some significant financial benefits. Despite that, only a fraction of the nation’s 24 million veterans have taken advantage of their VA loan benefits.

What’s worse is that a whopping 20 percent of veterans don’t even know the program exists, according to a 2004 study by the Department of Veterans Affairs. The reality is that millions of Americans already qualify for these high-impact loans.

Qualifying for a VA loan

The VA has some initial criteria that prospective borrowers must meet in order to continue with the process. At this time, those considering a VA loan must be:

  • Military members who’ve served 181 days on active duty or three months during war time may be eligible.
  • People who have spent at least a half-dozen years in the National Guard or Reserves.
  • Spouses of those killed in the line of duty.

Those who fall into one of those categories must then fill out a Certificate of Eligibility, or COE. This is an official VA document that basically certifies your ability to participate in the program. Applicants can obtain these through the VA directly or through a VA broker.

VA officials look over the Certificate of Eligibility and ultimately determine whether a prospective borrower can participate.

The VA Loan Guaranty Program doesn’t have explicit income or credit standards to qualify. But the VA does not issue loans — it guarantees them. VA-approved lenders will require a credit score of at least 620.

VA Loan Limits

The VA uses a loan limit system that limits how much a participant can borrow with a VA guarantee. Throughout most of the country, qualified borrowers can get up to $417,000 without putting down a single dollar.

That limit is higher in some of the nation’s more expensive housing markets.

Except in those high-cost areas, VA borrowers looking for a house that costs more than $417,000 must cover the difference out of pocket.

For more information about VA Loans eligibility and financing, visit

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Date published: February 11, 2010.

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Ryan Guina is the founder and editor of this site. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is currently serving in the IL Air National Guard. He also writes about money management, small business, and career topics at Cash Money Life. You can also see his profile on Google.


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