The VA home loan, provided through the Veterans Benefits Administration under the Department of Veteran Affairs, offers 100% financing for zero-down home buying. Military members, veterans, and eligible family members may qualify for a new home loan with little or no down payment, subject to eligibility criteria and the possession of a Certificate of Eligibility (COE).
Eligibility:
- Active military members, veterans, National Guard members, Reservists, and surviving spouses may be eligible.
- Qualification varies, and individuals should explore their eligibility and obtain a COE.
- Lenders can pull the certificate during the pre-qualification stage.
Credit Requirements:
- While no set minimum credit score exists, a general goal of 600 or higher is recommended.
- VA allows for a “manual underwrite” if an automated system results in a “not approved” status.
Income and Work History:
- A minimum 2-year work history is required; potentially less if there was relevant schooling in previous years.
- Disability and benefits award letters assist in determining income.
Loan Amount:
- VA finances 100% of the home’s purchase price, offering a true zero-down home loan insured by the Federal Government.
VA Appraisal:
- A VA-approved appraiser assesses the property to ensure it meets VA standards, although it is not a home inspection.
Seller Concessions:
- VA loans allow seller concessions of up to 6% of the sales price to cover the buyer’s closing costs.
