1. Apply for a Certificate of Eligibility.
   A veteran who doesn't have a certificate can obtain one easily by completing VA Form 26-1880, Request for a Certificate of Eligibility for VA Home Loan Benefits and submitting it to one of the Eligibility Centers with copies of your most recent discharge or separation papers covering active military duty since September 16, 1940, which show active duty dates and type of discharge.
2. Decide on a home the buyer wants to buy and sign a purchase agreement
3. Order an appraisal from VA. (Usually this is done by the lender.)
   Most VA regional offices offer a "speed-up" telephone appraisal system. Call the local VA office for details.
4. Apply to a mortgage lender for the loan.
   While the appraisal is being done, the lender (mortgage company, savings and loan, bank, etc.) can be gathering credit and income information. If the lender is authorized by VA to do automatic processing, upon receipt of the VA or LAPP appraised value determination, the loan can be approved and closed without waiting for VA's review of the credit application. For loans that must first be approved by VA, the lender will send the application to the local VA office, which will notify the lender of its decision.
5. Close the loan and the buyer moves in.

Persian Gulf Conflict. Basically, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged honorably are eligible. VA regional office personnel may assist with eligibility questions.

Members of the Selected Reserve, including National Guard, who are not otherwise eligible and who have completed 6 years of service and have been honorably discharged or have completed 6 years of service and are still serving may be eligible. The expanded eligibility for Reserves and National Guard individuals will expire September 30, 2003. Contact the local VA office to find out what is needed to establish eligibility. Reservists will pay a slightly higher funding fee than regular veterans.

Question: How do I apply for a VA guaranteed loan?

Answer: You can apply for a VA loan at any mortgage company that participates in the VA home loan program. At some point, you will need to get a Certificate of Eligibility from VA to prove to the mortgage company that you are eligible for a VA loan.

Question: How do I get a Certificate of Eligibility?

Answer: To get a Certificate of Eligibility, you need to submit form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement. A copy of the form can be obtained by calling 800-827-1000. Send it to any VA Regional Office. You must include a copy of your DD214 with the form 26-1880. If you are on active duty, you must submit a statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters showing date of entry on your current active duty period and the duration of any time lost.

Question: I have already received one VA loan. Can I get another one?

Answer: Yes, depending on the circumstances. If you have paid off your prior VA loan and disposed of the property, you can have your entitlement restored for additional use. To obtain restoration of entitlement, you must send VA a completed VA Form 26-1880, along with evidence that the property has been disposed of and the loan repaid in full. This evidence can be in the form of a pay-off statement from the former mortgage company, or a copy of the HUD-1 settlement statement completed in connection with the sale of the property. The application can be presented to any VA Regional Office. A veteran can also obtain restoration of entitlement, on a one-time basis, if the prior VA loan has been paid in full but the property has not been sold.

Question: I have sold the property I obtained with my prior VA loan on an assumption. Why can't I get my entitlement restored to purchase a new home?

Answer: In this case the your entitlement can be restored only if the assumer is also an eligible veteran who is willing to substitute his or her entitlement for that of your original entitlement. Otherwise, you cannot have entitlement restored until the assumer has paid off the VA loan.

Question: My prior VA loan was assumed, the assumer defaulted on the loan, and VA paid a claim to the mortgage company. VA said it wasn't my fault and waived the debt. Now I need a new VA loan but am told that I am not eligible. Why not? or My prior loan was foreclosed on, or I gave a Deed in Lieu of Foreclosure, or VA paid a compromise claim. I was released from liability on the loan and/or the debt was waived. Can I get another VA loan?

Answer: Although the your debt was waived by VA, the Government has still suffered a loss on the loan. The law does not permit the your entitlement to be restored until the loss has been repaid in full.

More than 29 million veterans and service personnel are eligible for VA financing. Even though many veterans have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.

1. Before arranging for a new mortgage to finance a home purchase, veterans should consider some of the advantages of VA home loans
2. Most important consideration, no downpayment is required in most cases.
3. Loan maximum may be up to 100 percent of the VA-established reasonable value of the property. Due to secondary market requirements, however, loans generally may not exceed $203,000.
4. Flexibility of negotiating interest rates with the lender.
5. No monthly mortgage insurance premium to pay.
6. Limitation on buyer's closing costs.
7. An appraisal which informs the buyer of property value.
8. Thirty year loans with a choice of repayment plans:
   a. Traditional fixed payment (constant principal and interest; increases or decreases may be expected in property taxes and homeowner's insurance coverage);
   b. Graduated Payment Mortgage--GPM (low initial payments which gradually rise to a level payment starting in the sixth year); and
   c. In some areas, Growing Equity Mortgages-GEMs (gradually increasing payments with all of the increase applied to principal, resulting in an early payoff of the loan).
9. For most loans for new houses, construction is inspected at appropriate stages to ensure compliance with the approved plans, and a 1-year warranty is required from the builder that the house is built in conformity with the approved plans and specifications. In those cases where the builder provides an acceptable 10-year warranty plan, only a final inspection may be required.
10. An assumable mortgage, subject to VA approval of the assumer's credit.
11. Right to prepay loan without penalty.
12. VA performs personal loan servicing and offers financial counseling to help veterans avoid losing their homes during temporary financial difficulties

1. To buy a home, including townhouse or condominium unit in a VA-approved project.
2. To build a home.
3. To simultaneously purchase and improve a home.
4. To improve a home by installing energy-related features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA. These features may be added with the purchase of an existing dwelling or by refinancing a home owned and occupied by the veteran. A loan can be increased up to $3,000 based on documented costs or up to $6,000 if the increase in the mortgage payment is offset by the expected reduction in utility costs. A refinancing loan may not exceed 90 percent of the appraised value plus the costs of the improvements. Check with a lender or VA for details.
5. To refinance an existing home loan up to 90 percent of the VA-established reasonable value or to refinance an existing VA loan to reduce the interest rate.
6. To buy a manufactured home and/or lot.

VA Appraisal- Certificate of Reasonable Value

The CRV (certificate of reasonable value) is based on an appraiser's estimate of the value of the property to be purchased. Because the loan amount may not exceed the CRV, the first step in getting a VA loan is usually to request an appraisal. Anyone (buyer, seller, real estate personnel or lender) can request a VA appraisal by completing VA Form 26-1805, Request for Determination of Reasonable Value. After completing the form, it can either be mailed to the Loan Guaranty Division at the nearest VA office for processing or an appraisal can be requested by telephoning the Loan Guaranty Division for assignment of an appraiser. The local VA office may be contacted for information concerning its assignment procedures. The appraiser will send a bill for his or her services to the requester according to a fee schedule approved by VA. To simplify things, VA and HUD/FHA (Department of Housing and Urban Development/Federal Housing Administration) use the same appraisal forms. Also, if the property was recently appraised under the HUD procedure, under certain limited circumstances, the HUD conditional commitment can be converted to a VA CRV. The local VA office can explain how this is done.

It is important to recognize that while the VA appraisal estimates the value of the property, it is not an inspection and does not guarantee that the house is free of defects. Homebuyers should be encouraged to carefully inspect the property themselves, or to hire a reputable inspection firm to help in this area. VA guarantees the loan, not the condition of the property.

Application

The application process for VA financing is no different from any other type of loan. In fact, the VA application form is the same as that used for HUD/FHA and conventional loans. The mortgage lender verifies the applicant's income and assets, and obtains a credit report to see that other obligations are being paid on time. If all is well and the appraised value of the property is enough to cover the loan needed, the lender, in most instances, can then close the loan under VA's automatic procedure. Only about 10 percent of VA loan applications have to be submitted to a VA office for approval before closing.

A basic funding fee of 2.0 percent must be paid to VA by all but certain exempt veterans. A down payment of 5 percent or more will reduce the fee to 1.5 percent and a 10 percent down payment will reduce it to 1.25 percent.

A funding fee of 2.75 percent must be paid by all eligible Reserve/National Guard individuals. A down payment of 5 percent or more will reduce the fee to 2.25 percent and a 10 percent down payment will reduce it to 2.0 percent.

The funding fee for loans to refinance an existing VA home loan with a new VA home loan to lower the existing interest rate is 0.5 percent.

Veterans who are using entitlement for a second or subsequent time who do not make a down payment of at least 5 percent are charged a funding fee of 3 percent.

NOTE: For all VA home loans, the funding fee may be paid in cash or it may be included in the loan.

In addition, reasonable closing costs may be charged by the mortage company. These costs may not be included in the loan. The following items may be paid by the veteran purchaser, the seller, or shared. Closing costs may vary among companies and also throughout the nation because of differing local laws and customs.

VA loan costs may include VA appraisal, credit report, loan origination fee (usually 1 percent of the loan), discount points, title search and title insurance, recording fees, state and/or local transfer taxes, if applicable, survey

No commissions, brokerage fees or "buyer broker" fees may be charged to the veteran buyer.

Veterans who had a VA loan before may still have "remaining entitlement" to use for another VA loan. The current amount of entitlement available to each eligible veteran is $36,000. This was much lower in years past and has been increased over time by changes in the law. For example, a veteran who obtained a $25,000 loan in 1974 would have used $12,500 guaranty entitlement, the maximum then available. Even if that loan is not paid off, the veteran could use the $23,500 difference between the $12,500 entitlement originally used and the current maximum of $36,000 to buy another home with VA financing. An additional $14,750, up to a maximum entitlement of $50,750 is available for loans above $144,000 to purchase or construct a home.

Most mortage companies require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less. Thus, in the example, the veteran's $23,500 remaining entitlement would probably meet a mortgage company's minimum guaranty requirement for a no down payment loan to buy a property valued at and selling for $94,000. The veteran could also combine a down payment with the remaining entitlement for a larger loan amount.

Veterans can have previously-used entitlement "restored" to purchase another home with a VA loan if: The property purchased with the prior VA loan has been sold and the loan paid in full, or a qualified veteran-transferee (buyer) agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller.

Remaining entitlement and restoration of entitlement can be requested through the nearest VA office by completing VA Form 26-1880. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full but has not disposed of the property purchased with the prior VA loan.

Question:  Can I get a VA loan if I have had a bankruptcy in the last few years?

Answer:  VA credit standards state that a veteran with a bankruptcy less than 3 years ago would generally not be considered a satisfactory credit risk unless: the veteran or spouse has obtained items on credit since the bankruptcy and has paid the obligations in a satisfactory manner for a continued period; and the bankruptcy was caused by circumstances beyond the control of the borrower, which would have to be verified. A bankruptcy discharged 3 to 5 years ago must be given some consideration in the underwriting of the loan. A bankruptcy discharged more than 5 years ago may be disregarded. These are the minimum standards that mortgage companies must follow when making a VA loan. In 95% of the cases, companies make the decision to approve a loan without VA's prior approval. Keep in mind that mortgage companies also have money at risk in giving you a VA loan, so they may have stricter credit standards than those mandated by VA.

Question:  How big of a loan can I get? If my guaranty entitlement is $36,000, does this mean I am limited to a $36,000 loan?

Answer:  There is no limit on the size of a VA guaranteed home loan, provided that the veteran is qualified for the loan from a credit and income standpoint. However, as a practical matter, companies will generally limit the maximum loan amount to 4 times the amount of the veteran's available entitlement plus any downpayment. Currently, the maximum entitlement on loans above $144,000 is $50,750, which will support a no downpayment loan of up to $203,000.

Question:  Why do I have to pay a fee for a VA home loan? Since I paid a fee for my first loan, why is there a larger fee for my second loan?

Answer:  The VA funding fee is required by law. The fee, currently 2 percent on no downpayment loans, is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduce the cost to taxpayers. The funding fee for second time users who do not make a downpayment is 3 percent. The idea of a higher fee for second time use is based on the fact that these veterans have already had a chance to use the benefit once, and also that prior users have had time to accumulate equity or save money towards a downpayment. Second time users who make a downpayment of at least 5 percent pay a reduced funding fee of 1.5 percent, the same as first time users making the same downpayment. For a 10 percent downpayment, the fee drops to 1.25 percent. The effect of the funding fee on a veteran's financial situation is minimized since the fee may be financed in the loan.

Question:  May a veteran join with a non veteran who is not his or her spouse in obtaining a VA loan?

Answer:  Yes, but the guaranty is based only on the veteran's portion of the loan. The guaranty cannot cover the non-veteran's part of the loan. Consult mortgage companies to determine whether they would be willing to accept applications for joint loans of this type. Mortgage companies that are willing to make these types of loans will likely require a downpayment to cover risk on the unguaranteed, non-veteran's portion of the loan. Unlike other loans, the mortgage company must submit joint loans to VA for approval before they are made. Both incomes can be used to qualify for the loan. However, the veteran's income must be sufficient to repay at least that portion of the loan related to the veteran's interest in (portion of) the property and the non-veteran's income adequate to cover the rest.

VA has provided the following toll-free numbers for the convenience of veterans and dependents:

VA Benefits 1-800-827-1000
Life Insurance 1-800-669-8477
Debt Management Center 1-800-827-0648
Education Loans 1-800-326-8276
TDD Line 1-800-829-4833
CHAMPVA 1-800-733-8387
Headstones and Markers 1-800-697-6947
Persian Gulf Helpline 1-800-PGW-VETS
VA ONLINE 1-800-US1-VETS (871-8387)

ALABAMA
Regional Office:
Montgomery 36109 (345 Perry Hill Rd., 800-827-1000)

ALASKA
Regional Office:
Anchorage 99508-2989 (2925 DeBarr Rd., 257-4700; 800-827-1000)

ARIZONA
Regional Office:
Phoenix 85012 (3225 N. Central Ave., 263-5411; 800-827-1000)

ARKANSAS
Regional Office:
North Little Rock 72115 (Bldg. 65, Ft. Roots, P.O. Box 1280, 370-3800; 800-827-1000)

CALIFORNIA
Regional Office:
Los Angeles 90024 (Fed. Bldg., 11000 Wilshire Blvd. 479-4011; 800-827-1000)
San Diego 92108 (2022 Camino Del Rio North,297-8220; 800-827-1000)
Oakland 94612 (1301 Clay St., Rm. 1300 North, 637-1365; 800-827-1000) (Recorded benefits, 24-hour availability, 637-1325)

COLORADO
Regional Office:
Denver 80225 (155 Van Gordon St.,980-1300; 800-827-1000)

CONNECTICUT
Regional Office:
Hartford 06103 (450 Main St., 860-278-3230; 800-827-1000)

DELAWARE
Regional Office:
Wilmington 19805 (1601 Kirkwood Hwy., 998-0191; 800-827-1000)

DISTRICT OF COLUMBIA:
Regional Office:
Washington, D.C. 20421 (1120 Vermont Ave., N.W., 418-4343)

FLORIDA
Regional Office:
St. Petersburg 33701 (144 1st Ave. S., 898-2121; 800-827-1000)

GEORGIA
Regional Office:
Atlanta 30365 (730 Peachtree St., N.E.; 800-827-1000)

HAWAII
Regional Office:
Honolulu 96850-001 (P.O. Box 50188, 300 Ala Moana Blvd., Rm. 1004; Medical Office, 808-566-1000;

IDAHO
Regional Office:
Boise 83702 (805 W. Franklin St., 334-1010; 800-827-1000)

ILLINOIS
Regional Office:
Chicago 60680 (536 S. Clark St., P.O. Box 8136; 800-827-1000)

INDIANA
Regional Office:
Indianapolis 46204 (575 N. Pennsylvania St.; 800-327-1000)

IOWA
Regional Office:
Des Moines 50309 (210 Walnut St., 284-0219; 800-827-1000)

KANSAS
Regional Office:
Wichita 67218 (5500 E. Kellogg; 800-827-1000)

KENTUCKY
Regional Office:
Louisville 40202 (545 S. Third St.; 800-827-1000)

LOUISIANA
Regional Office:
New Orleans 70113 (701 Loyola Ave., 800-827-1000)

MAINE
Regional Office:
Togus 04330 (1 VA Center, 623-8000; 800-827-1000)

MARYLAND
Regional Office:
Baltimore 21201 (31 Hopkins Plaza Fed. Bldg., 800-827-1000; 800-827-1000)

MASSACHUSETTS
Regional Office:
Boston 02203 (JFK Federal Bldg., Government Center, 227-4600; 800-827-1000)

MICHIGAN
Regional Office:
Detroit 48226 (Patrick V. McNamara Federal Bldg., 477 Michigan Ave.; 800-827-1000)

MINNESOTA
Regional Office and Insurance Center: St. Paul 55111 (Bishop Henry Whipple Federal Bldg., 1 Federal Dr., Fort Snelling; 800-827-1000; insurance, 800-669-8477)

MISSISSIPPI
Regional Office:
Jackson 39269 (100 W. Capitol St., 800-827-1000)

MISSOURI
Regional Office:
St. Louis 63103 (400 South 18th St.; 800-827-1000)

MONTANA
Regional Office:
Fort Harrison 59636 ( 447-7975; 800-827-1000)

NEBRASKA
Regional Office:
Lincoln 68516 (5631 S. 48th St., 402-420-4001; 800-827-1000)

NEVADA
Regional Office:
Reno 89520 (1201 Terminal Way, 329-9244; 800-827-1000)

NEW HAMPSHIRE
Regional Office:
Manchester 03101 (Norris Cotton Federal Bldg., 275 Chestnut St., 666-7785; 800-827-1000)

NEW JERSEY
Regional Office:
Newark 07102 (20 Washington Pl., 800-827-1000)

NEW MEXICO
Regional Office:
Albuquerque 87102 (Dennis Chavez Federal Bldg., 500 Gold Ave., S.W., 766-3361; 800-827-1000)

NEW YORK
Regional Offices:
Buffalo 14202 (Federal Bldg., 111 W. Huron St., 551-5191; 800-827-1000)
New York City 10014 (245 W. Houston St., 212-807-7229; 800-827-1000 )

NORTH CAROLINA
Regional Office:
Winston-Salem 27155 (Federal Bldg., 251 N. Main St., 800-827-1000)

NORTH DAKOTA
Regional Office:
Fargo 58102 (2101 Elm St.; 800-827-1000)

OHIO
Regional Office:
Cleveland 44199 (Anthony J. Celebrezze Federal Bldg., 1240 E. 9th St.; 800-827-1000)

OKLAHOMA
Regional Office:
Muskogee 74401 (Federal Bldg., 125 S. Main St., local 687-2500; 800-827-1000)

OREGON
Regional Office:
Portland 97204 (Federal Bldg., 1220 S.W. 3rd Ave., 221-2431; 800-827-1000)

PENNSYLVANIA
Regional Offices:
Philadelphia 19101 (RO and Insurance Center, P.O. Box 8079, 5000 Wissahickon Ave., 438-5225; 800-827-1000; insurance, 800-669-8477)
Pittsburgh 15222 (1000 Liberty Ave., 281-4233; 800-827-1000)

RHODE ISLAND
Regional Office:
Providence 02903 (380 Westminster Mall, 800-827-1000)

SOUTH CAROLINA
Regional Office:
Columbia 29201 (1801 Assembly St., 765-5861; 800-827-1000)

SOUTH DAKOTA
Regional Office:
Sioux Falls 57117 (P.O. Box 5046, 2501 W. 22nd St., 336-3496; 800-827-1000)

TENNESSEE
Regional Office:
Nashville 37203 (110 9th Ave. South, 736-5251; 800-827-1000)

TEXAS
Regional Offices:
Houston 77030(6900 Almeda Rd, 800-827-1000)
Waco 76799 (1400 N. Valley Mills Dr., 817-772-3060; 800-827-1000)
In Bowie County, the City of Texarkana is served by Little Rock, AR, Regional Office, 800-827-1000.

UTAH
Regional Office:
Salt Lake City 84147 (P.O. Box 11500, Federal Bldg., 125 S. State St., 524-5960; 800-827-1000)

VERMONT
Regional Office:
White River Junction 05009 (N. Hartland Rd., 296-5177; 800-827-1000)

VIRGINIA
Regional Office:
Roanoke 24011 (210 Franklin Rd., S.W.; 800-827-1000)

WASHINGTON
Regional Office:
Seattle 98174 (Federal Bldg., 915 2nd Ave.; 800-827-1000)

WEST VIRGINIA Regional Office:
Huntington 25701 (640 Fourth Ave., 800-827-1000)

WISCONSIN
Regional Office:
Milwaukee 53295 (5000 W. National Ave., Bldg. 6; 800-827-1000)

WYOMING
Regional Office:
Cheyenne 82001 (2360 E. Pershing Blvd., 778-7396; 800-827-1000)

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