Owning a home is an indelible part of the American Dream—a long-term goal attained through hard work and tenacity. Unfortunately, the steps to owning a home whether it is a condo in the city or a ranch style home in the suburbs can make it difficult for prospective homeowners to achieve this goal.  For some would-be homeowners, the challenges of making a down payment on the mortgage or having a satisfactory credit score might be rather daunting.  Certain loan amounts might require down payments upwards of $7,000 in addition to a minimum credit score of 620. Thankfully, there is an avenue that potential homeowners can take to secure their dream home without a down payment—The VA Home Loan.

A Brief History of the VA Home Loan

The VA Home Loan was established in 1944 by the United States government in order to help service members purchase homes.  According to the Veterans United website, the VA Home Loan made possible for over 20 million service men and women, veterans, and surviving spouses buy or build their homes since it was created. Compared to other mortgage options, the VA Home Loan offers a number of advantages starting with no down payments.   In addition, the VA Home Loan does not require a hopeful homeowner to purchase Private Mortgage Insurance (PMI) and it is also usually easier for people to qualify for these loans. These perks likely alleviate the stress from America’s fighting men and women during the process to owning a home. Individuals who are thinking of buying a home, though, must keep in mind that the VA Home Loan does not come without some requirements.

Requirements to Obtain the VA Loan

Possible homeowners should be aware that, first, the Department of Veterans Affairs do not provide the loans. The loans come from Veterans Affairs (VA) approved lenders such as USAA, Navy Federal, or Wells Fargo to name a few. Second, these lenders often require the homeowner to have a credit score of at least 620. Third, the VA Home Loan is limited to people who are currently in the military or who served in the military for a certain period time. Borrowers must have actively served in the military for 90 consecutive days during wartime or 180 consecutive days during peacetime; or, have more than 6 years in either the National Guard or the Reserves; or, is a surviving spouse of a service member who died in the line of duty or due to a disability related to the service.  Moreover, borrowers must have a steady income that can pay for the mortgage in addition to life’s necessities.   Another issue that a homeowner might encounter is the rejection of an application due to a spouse’s bad credit or poor debt to income ratio even if the spouse is a non-purchasing spouse.  The family’s entire debt to income ratio will ultimately be reviewed prior to the approval of a loan. However, if borrowers can fulfill these minimum requirements, though, they can potentially receive the loan the need for the home of their desires.

For service members, veterans, and surviving spouses the VA Home Loan can make the dream of owning a home a reality.  Qualified borrowers do not have to make a down payment; purchase a PMI; or necessarily have an excellent credit score (although high credit scores undoubtedly help).  A borrower must simply meet the minimum requirements such as a credit score of 620; have served in military for a certain period of time; and must have a stable income along with a solid debt to income ratio.  Once these requirements are met a nervous borrower will be a homeowner and living the American Dream.

I am ready to help our veterans, service members, and surviving families gain the American Dream. Email me at eric.frazier@thepowerisnow.com for my real estate services to get you and your family into your dream home that you can afford. These families have served our country; I am ready to serve them. The Power Is Now!

 

Eric Lawrence Frazier, MBA

President and CEO

 

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