For veterans and active-duty service members, the VA home loan is an incredible benefit, offering zero down payment, competitive interest rates, and no private mortgage insurance (PMI). Understanding the steps in the process can help make homeownership smooth and stress-free.
Step 1: Check Your Eligibility
Before applying for a VA loan, confirm your eligibility. Most veterans, active-duty service members, and some surviving spouses qualify. You’ll need a Certificate of Eligibility (COE) to prove your service history. You can obtain this through:
- The VA eBenefits portal
- Your VA-approved lender (they can often pull it for you)
- Mailing in VA Form 26-1880 to the VA
Step 2: Assess Your Finances
While VA loans don’t require a down payment, it’s important to:
- Review your credit score (though the VA has no requirements regarding a credit score, your lender will)
- Determine your budget based on income, debts, and expenses
- Prepare for closing costs, which may still apply (though they are often lower than conventional loans)
Step 3: Get Pre-qualified at a minimum
A VA-qualification lender will review your income, credit, and financial status to issue a pre-qualification letter. This letter:
- Shows sellers you’re a serious buyer
- Helps you understand your purchasing power
- Speeds up the loan process once you find a home
Step 4: Find Your Home & Sign a Purchase Agreement
Work with a real estate agent who understands and is well-versed in VA loans to find a home that meets both your needs and VA property requirements. Once you make an offer and it’s accepted, you’ll sign a purchase agreement that includes a VA escape clause, protecting your earnest money if the home doesn’t meet the VA’s appraisal value.
Step 5: VA Appraisal & Underwriting
- The VA requires a home appraisal to determine fair market value and ensure the property meets Minimum Property Requirements (MPRs)
- Your lender will conduct underwriting, verify your finances, and review the appraisal before issuing a clear-to-close
Step 6: Close on Your Home
Once approved, you’ll sign closing documents, pay any required fees, and receive the keys to your new home! VA loans have no prepayment penalty, so you can pay off the loan early if desired.
Final Thoughts
The VA home loan is a powerful tool for veterans and service members to achieve homeownership. By understanding these steps and working with a knowledgeable lender and real estate agent, you can navigate the process with confidence.
If you have questions or need expert guidance, contact our President of Military and Veteran Lending, Jeff Wilson, former VA Loan Guaranty Officer, at 615.293.2775. Jeff and our team are here to help you make the most of your VA benefits and achieve your dream of homeownership.
