During the month of November, the country pauses to recognize the men and women who have served. Veterans Day highlights the incredible dedication our military members make, but it also highlights the challenges they face when they’re home; challenges like affording a home. Now, Rich Allensworth with Rock Mortgage joins Good Day NWA with a look at how VA loans work and what most borrowers don’t know about the program.

What is a VA Loan?

The VA loan is a $0 down mortgage option available to veterans, service members and select military spouses. It was created in 1944 to help returning service members purchase homes without needing a down payment or excellent credit. These mortgages have helped more than 24 million service members.

What are the benefits of VA loans?

A few of the benefits and features of this type of loan include: ● No down payment ● No mortgage insurance ● A one-time VA funding fee that can be included in the loan. This is a set fee applied to every loan. This fee goes directly to the VA to ensure the program keeps running for future generations of military homebuyers by removing any additional burdens off taxpayers and veterans. This fee varies depending on the borrower’s circumstances. The VA waives the Funding Fee if the veteran meets VA disability requirements. ● Another benefit is that other parties (including the lender or seller) can offer to pay the closing costs as well as the funding fee on behalf of the veteran

How Does a VA Loan work?

VA loans work a bit differently than conventional mortgages. The VA doesn’t make the loans, but instead backs a portion of each loan against default. This guarantee is what gives private lenders the confidence to extend $0 down financing. However, from a process perspective, VA loans work fairly similar to most other mortgage options, but with a few caveats.

What are the requirements for being eligible for a VA Loan?

To be eligible for a VA loan, you or your spouse must meet the basic service requirements set by the Department of Veterans Affairs. To qualify for VA loans, veterans must not have been dishonorably discharged from service and meet minimum active-duty requirements of between 90 days and 24 months, depending on when the veteran served. Members of the National Guard or Reserves need six years of service to qualify. Certain surviving spouses of deceased veterans may also be eligible. These include spouses of prisoners of war or those missing in action and surviving spouses of deceased veterans if the veteran’s death was service related. In other words, many may qualify. If your client or their spouse served in the military, it may be worth checking their status.

You must also have a valid Certificate of Eligibility and satisfy the lender’s credit and income requirements.

You mentioned the applicants will need to have a Certificate of Eligibility – what is that?

While you DO NOT need your Certificate of Eligibility (COE) in hand to apply for a VA loan, it is an important part of VA loan eligibility. Your COE provides the lender with confirmation that you qualify for VA loan benefits. This is a formal document used by the VA in order to make a final determination regarding eligibility. There are three basic ways you can obtain your COE for a VA loan, which include: 1. Applying through a VA approved lender 2. Applying online through the VA’s eBenefits portal 3. Applying by mail with VA Form 26-1880

If a veteran is getting serious about purchasing a home, where should they start?

The first step is to talk to a lender to see about getting approved and starting the process. VA guaranteed private lenders, like Rock Mortgage, make VA loans. I encourage people to visit our website at www.rockmortgagelending.com and contact us.

We have a page on our website just for veterans and military service members. Veterans can use this great loan as one of their well-deserved benefits for service. These loans make it easier for our servicemen and women to enjoy the many benefits of owning a home. And, to all the veterans out there watching, thank you for your service.

For more information, visit ​www.rockmortgagelending.com​ or call 479.321.3355.



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