One of the biggest benefits veterans have is the home loan guaranty program. The Department of Veterans Affairs website (www.benefits.va.gov) has full details, but here are a few things you need to know if you’re considering using it.
Benefits: You usually won’t need a down payment; the closing costs are limited and can be paid by the seller; you can pay off the loan early without penalty; and you won’t be stuck paying private mortgage insurance. The VA doesn’t loan you the money, but it stands behind a loan you get from another source. The loan guaranty is insurance to the lender, which can be helpful if you’ve been turned down by traditional sources.
Eligibility: You must have decent credit, sufficient income and a Certificate of Eligibility (COE). The home must be for you to live in. To obtain a COE, you need to have been discharged under other than dishonorable conditions. To apply for the COE, you’ll need VA Form 26-1880. See the VA website for a chart showing the qualifying wartime and peacetime periods, the qualifying active dates, and the minimum number of service days required.
What you can do: Buy a home, build a home, buy and improve a home, install energy-related improvements, buy a manufactured home and/or lot to put it on.
Other types of loans: Cash-out refinance, which allows you to take the equity from your home for paying off debts, financing school or making improvements to your home; and Interest Rate Reduction Refinance Loan (IRRRL), which is a refinance program for your existing VA loan. Additionally, there are housing grants to help disabled veterans buy or modify a home.
If you don’t have a computer, call the VA for more information about the home loan guaranty program at 1- 800-827-1000.
Freddy Groves regrets that he cannot personally answer reader questions, but will incorporate them into his column whenever possible. Send email to [email protected]. © 2013 King Features Synd. Inc.