Veteran Home Loans-100% Financing-IRRL

Department of Veterans Affairs VA-Guaranteed Home Loans


What is a VA-Guaranteed Home Loan?
  • VA-Guaranteed Home Loans are made by private lenders, such as banks, saving and loans or mortgage companies.
  • These loans are made to eligible Veterans for the purchase of a home for their personal occupancy.
  • VA guarantees the loan to protect the lender against loss if the payments are not made.
  • VA-Guaranteed Home Loans are intended to encourage lenders to offer Veterans loans with more favorable terms.
What can Veteran Home Loans be used for?
  • To buy a home, condominium or townhouse.
  • To build a home.
  • To repair, alter, renovate and improve a home.
  • To simultaneously buy and improve a home.
  • To improve a home by installing energy-efficient features (solar heating/cooling systems, water heater insulation, weather-stripping/caulking, storm windows/doors or other energy-efficient improvements approved by both the lender and VA).
  • To refinance an existing home loan to reduce the interest rate.
  • To buy a manufactured (mobile) home and lot.
  • To buy and improve a lot on which you plan to place a manufactured home you already own and live in.
  • To refinance a manufactured home loan so that you can buy a lot.
What are some advantages of a VA-Guaranteed Home Loan?
  • Equal opportunity for all qualified Veterans to obtain a loan.
  • 100% financing (unless it is required by the lender or the purchase price is more than the reasonable value of the property).
  • 100% financing up to the Freddie Mac loan limit for the county where the property is located.
  • Buyers informed of reasonable value.
  • Negotiable interest rates.
  • Limitations on closing costs.
  • Mortgages are assumable.
  • Long amortization (repayment) terms.
  • No mortgage insurance premiums.
  • Right to prepay without penalty.
  • For new constructions, a warranty from the builder and assistance from VA to obtain builder’s cooperation.
  • VA assistance to Veteran borrowers in default due to temporary financial difficulty.
  • VA cannot guarantee that a home is free of defects. It is the Veteran’s responsibility to ensure that he or she is satisfied with the property being purchased.
  • The VA appraisal is not intended to be an “inspection” of the property. A Veteran should get expert advice from a qualified residential inspection service before legally committing to a purchase agreement. Veterans are also encouraged to have radon testing performed.
  • If you have a home built, VA cannot compel the builder to correct construction defects, although VA does have the authority to suspend a builder from further participation in the Home Loan Program.
  • VA cannot guarantee that a Veteran is making a good investment.
  • VA cannot provide a Veteran with legal services.
Requirements for VA-Guaranteed Home Loan Approval
  • You must be an eligible Veteran who has available home loan entitlement (except in the case of an interest rate reduction refinancing loan).
  • The loan must be for an eligible purpose.
  • You must occupy or intend to occupy the property as your home within a reasonable period of time after closing the loan.
  • You must have enough income to meet the new mortgage payments on the loan, cover the costs of owning a home, take care of other obligations and expenses, and still have enough income left over for family support (a spouse’s income is considered in the same manner as the Veteran’s).
  • You must have a good credit record.
The Guaranty
  • If the loan is approved, VA guarantees the loan when it is closed. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan.

7 Easy Steps to a VA-Guaranteed Home Loan

  1. Apply for a Certificate of Eligibility (COE) via eBenefits ( or have your lender apply online via WebLGY.
  2. Select a lender, present them with your COE and complete a loan application.
  3. Decide on a home you want to buy and sign a purchase agreement conditioned on approval of your VA home loan.
  4. Order an appraisal from VA (this is usually done by the lender). The lender will request VA assign a licensed appraiser to determine the reasonable value for the property. A Notice of Value will be issued.
  5. The lender will let you know the decision on the loan. You should be approved if the established value and your credit and income are acceptable.
  6. Attend the loan closing. The lender or closing attorney will explain the loan terms and requirements as well as where and how to make the monthly payments. All relevant papers are signed and a move-in date is determined.
  7. The lender applies to VA for evidence of guaranty.


Service During Wartime
  • World War II: September 16, 1940 – July 25, 1947
  • Korean War: June 27, 1950 – January 31, 1955
  • Vietnam War: August 5, 1964 – May 7, 1975
Service Requirements
  • At least 90 days active duty – with other than dishonorable discharge
  • Less than 90 days active duty – if discharged for a service-connected disability
Gulf War: August 2, 1990 – TBD
Service Requirements:
  • 24 months continuous active duty – with other than dishonorable discharge
  • At least 90 days if called or ordered to active duty – with other than dishonorable discharge
  • At least 90 days active duty – and discharged for Hardship or Early Out, or if discharged for a compensable service-connected disability
  • Less than 90 days active duty – if discharged for a service-connected disability, involuntary reduction in force, certain medical conditions, for the convenience of the Government
Service During Peacetime
  • All
    • July 26, 1947 – June 26, 1950
    • February 1, 1955 – August 4, 1964
  • Enlisted
    • May 8, 1975 – September 7, 1980
  • Officers
    • May 8, 1975 – October 16, 1981
Service Requirements
  • At least 181 days continuous active duty – with other than dishonorable discharge
  • Less than 181 days active duty – if discharged for a service-connected disability
If You Were Separated From Service
  • Enlisted
    • After September 7, 1980
  • Officers
    • After October 16, 1981
Service Requirements
  • 24 months continuous active duty – with other than dishonorable discharge
  • At least 181 days if called or ordered to active duty – with other than dishonorable discharge
  • At least 181 days active duty – and discharged for Hardship or Early Out, or if discharged for a compensable service-connected disability
  • Less than 181 days active duty – if discharged for a service-connected disability, involuntary reduction in force, certain medical condition, for the convenience of the Government
Active-Duty Service Personnel
  • If you are now on active duty, eligibility can be established after 90 days of continuous active duty. Upon discharge or release from active duty, eligibility must be reestablished.
Selected Reserve or National Guard
  • If you are not otherwise eligible and you have completed a total of 6 years in the Selected Reserve or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and:
    • Were discharged with an honorable discharge; or
    • Were placed on the retired list; or
    • Were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service; or
    • Continue to serve in the Selected Reserve.
      • Note: Individuals who completed less than 6 years may be eligible if discharged for a service-connected disability.
  • You may also be determined eligible if:
    1. You are an un-remarried spouse of a Veteran who died while in service or from a service-connected disability; or
    2. You are a spouse of a servicemember missing in action or a prisoner of war.
    3. You are a surviving spouse in receipt of Dependency and Indemnity Compensation (DIC) benefits in cases where the Veteran’s death was not service-connected.
      • Note: Also, a surviving spouse who remarries on or after turning age 57 and on or after December 16, 2003, may be eligible for the home loan benefit. However, a surviving spouse who remarried before December 16, 2003, and on or after turning age 57, must have applied no later than December 15, 2004, to establish home loan eligibility. After December 15, 2004, VA must deny applications from spouses who remarried before December 16, 2004.
  • Eligibility can also be established for:
    1. Certain U.S. Citizens who served in the armed forces of a government allied with the U.S. In World War II.
    2. Individuals with service as members in certain organizations, such as:
      • Public Health Service Officers
      • Cadets at the U.S. Military, Air Force or Coast Guard Academy
      • Midshipmen at the U.S. Naval Academy
      • Officers of National Oceanic and Atmospheric Administration

Obtaining a Certificate of Eligibility (COE)

  • VA determines your eligibility and, if qualified, a COE will be issued. Eligibility applications can involve:
    1. An original determination of eligibility for the home loan benefit.
    2. A request to replace a lost COE.
    3. A request for restoration of the benefit after payment in full of a previous VA home loan.
    4. Issuance of a certificate reflecting a current outstanding loan for refinance purposes.
  • To request a COE online:
    1. In most cases, your lender will be able to obtain a COE for you.
    2. You may be able to obtain a COE online through eBenefits at
  • If unable to request a COE online:
    1. Not all cases can be processed electronically. If there is insufficient data in VA records, the certificate will have to be requested from VA.
    2. Obtain VA Form 26 – 1880, Request for a COE. Download the form at
    3. Complete the form
    4. Include photocopies of your most recent discharge or separation papers covering active military duty, which show active duty dates and type of discharge. For specific instructions, refer to the tables below.
    5. Send the completed VA Form 26 – 1880 and any supporting evidence to the Eligibility Center. The address is provided in the “Eligibility and Loan Centers” tab. Under normal circumstances, you will get a response in about 10 days. This time frame will vary during periods of heavy activity.
  • With Your Request, Be Sure to Include:
    1. If you served on regular active duty
      1. If you served on regular active duty (not a Reservist) and were discharged after 1975 or if you have previously had a VA loan: It may not be necessary for you to provide documentation of your military service. However, it is best to provide this evidence if it is readily available to avoid possible processing delays.
      2. If you were discharged from regular active duty:
        1. If you were separated after January 1, 1950: The appropriate documentation of your military service would be DD Form 214, Certificate of Release or Discharge from Active Duty.
        2. If you were discharged after October 1, 1979: DD Form 214, copy 4 would be appropriate.


          A photocopy of DD Form 214 will suffice. Do not submit an original document.
      3. If Your Service was in Selected Reserve:
        1. You must provide documentation sufficient to establish that you served a minimum of 6 years with points earned for weekend drills or active duty for training and received an honorable discharge. There is no uniform document similar to the DD Form 214 for proof of service in the Selected Reserve, so:
          • For those who served in the Army or Air National Guard and were discharged after at least 6 years of service: NGB Form 22 – A copy of your latest retirement points summary will also be helpful in determining eligibility.
          • For those who served in the Army, Navy, Air Force, Marine Corps or Coast Guard Reserve: It may be necessary to submit a combination of documents, such as an Honorable Discharge certificate together with a Retirement Points Statement.
      4. If You are Now on Regular Active Duty:
        1. If you are now on regular active duty and have not been previously discharged from active duty service: You must submit a statement of service that includes the name of the issuing authority (base or command) and is signed by or at the direction of an appropriate official. This statement must identify you (Social Security number) and provide your date of entry on active duty and the duration of any time lost.
      5. If You are Seeking Restoration of Your Previously Used Benefit:
        1. You should include any evidence of payment in for of your prior loan that you have in your possession.
        2. Normally, VA receives notification that a loan has been paid, but this does not always happen.
        3. VA determines your eligibility and, if you are qualified, VA will issue you a COE to be used in applying for a VA loan.

Applying for the Loan

  • VA-Guaranteed Home Loans are obtained by making an application to a private lending institution, such as a bank, or a savings and loan or mortgage company.
  • Most mortgage lenders will have the forms and other necessary papers to apply for a Certificate of Eligibility (COE) and for the loan, and can help you fill them out.
  • If you have a COE, present it to your lender when making your loan application to ensure the lender that you are eligible before accepting your application. However, a lender will undoubtedly discuss the possibility of making a VA-Guaranteed Home Loan to you without seeing the certificate. In fact, many lenders will assist you in applying for a COE. So, even if you have not obtained a COE, do not delay applying for a loan for this reason alone.
  • To reduce delays in the processing of your loan, you should be prepared to give the lender the following:
    1. Your complete name and address.
    2. Your employment history covering a 2-year period.
    3. Your employee identification numbers for present and past employers covering a 2-year period.
    4. The location and account numbers for your savings and checking accounts.
    5. Details about all open and recently closed debts and obligations.
How are VA-Guaranteed Home Loans Processed?
  • On a prior approval basis
    1. The lender takes your application, requests VA to appraise the property, and verifies your income and credit record.
    2. All this information is put together in a loan package and sent to the VA for review.
    3. If VA approves the loan, a commitment by VA to guarantee the loan is sent to the lender.
    4. The lender then closes the loan and sends a report of the closing to the VA.
    5. If the loan complies with VA requirements, VA issues the lender a certificate of guaranty.
  • On an automatic basis
    1. The lender still orders an appraisal from VA, but has the authority to make the credit decision on the loan with VA’s approval.
    2. The biggest difference between the prior approval and automatic processing is the time saved by avoiding the need to await VA’s approval before loan closing.
    3. Not all lenders have the authority to process loans on the automatic basis. Banks, savings and loan association and certain other lenders, such as mortgage companies that are approved by the VA, have the privilege of processing VA-guaranteed loans using the automatic procedure.
    4. Lenders approved to participate in VA’s Lender Appraisal Processing Program (LAPP) are generally able to quicken the processing of VA appraisals.


  • Funding Fee
    1. Veterans using the VA Home Loan Program must pay a funding fee. Veterans receiving disability compensation are exempt.
    2. The funding fee can range from 0.5% for Interest Rate Reduction Refinancing Loans (IRRRLs) to 3.3% for Veterans who are subsequent users of the VA Home Loan Program.
  • Other Closing Costs
    1. Reasonable closing costs may be charged by the lender. These costs may not be included in the loan. The following items may be paid by the Veteran purchaser, the seller or shared: VA appraisal; credit report; loan origination fee (usually 1% of the loan); discount points; title search and title insurance; recording fee; state and/or local transfer tax (if applicable); survey.
    2. Closing costs may vary among lenders and also throughout the nation because of differing local laws and customs.
    3. No commissions, brokerage fees or “buyer broker” fees may be charged to the Veteran buyer.
  • Interest Rates
    1. The interest rate on VA loans can be negotiated based on prevailing rates in the mortgage market.
    2. Once a loan is made, the interest rate set in the note will stay the same for the life of the loan (except in the case of adjustable-rate mortgages, which can change periodically).


Remaining Entitlement
  • Veterans who had a VA-Guaranteed Home Loan before may still have remaining entitlement to use for another VA-Guaranteed Home Loan.
Restoration of Entitlement
  • Veterans can have previously used entitlement restored to purchase another home with a VA-Guaranteed Home Loan if:
    1. The property purchased with the prior VA-Guaranteed Home Loan has been sold and the loan has been paid in full; or
    2. A qualified Veteran-transferee (buyer) agrees to assume the VA-Guaranteed Home Loan and substitute his or her entitlement originally used by the Veteran seller.
  • Entitlement may also be restored one time only if the Veteran has repaid the prior VA-Guaranteed Home Loan in full but has not disposed of property purchased with the prior VA-Guaranteed Home Loan.
  • Remaining entitlement may still be available even if one-time restoration has been used.
Specially Adapted Housing (SAH)
  • Veterans who have specific service-connected disabilities may be entitles to a grant from VA for the purpose of constructing an adapted dwelling or modifying an existing one to meet their needs.
  • An eligible Veteran may receive a VA grant of not more than 50% of the cost of a specially adapted home up to a maximum amount determined by Congress.
  • Eligible Veterans may receive up to 3 grants, as long as the total amount does not exceed the maximum allowable.
  • There is no time limitation or deadline to use the SAH grant.
An eligible Veteran has the option to use the grant under any of the following plans:
  • The Veteran may elect to construct a home on land to be acquired for that purpose.
  • The Veteran may build a home on land already owned if it is suitable for SAH.
  • When the Veteran has already acquired a specially adapted home (without the assistance of a VA grant), the grant may be applied against any unpaid balance of the cost of the home.
Special Home Adaptation (SHA)
  • Provides financial assistance in obtaining adapted housing to Veterans who have a service-connected disability that entitles them to compensation for permanent and total disability.
  • The Veterans may use the SHA for the actual cost of adaptations up to the maximum amount of the SHA grant.
  • For the current maximum SHA grant amount, eligible Veterans should refer to the website:
How may Grants be used?
  • The Veteran may elect to adapt a home that he/she plans to purchase.
  • The Veteran may adapt a home that a family member may purchase.
  • The Veteran may adapt a home that he/she already owns.
  • The Veteran may adapt a home already owned by a family member.
  • The Veteran may use the grant to purchase or reduce the principle mortgage amount of a home that has already been adapted with special features that VA has determined are reasonably necessary.
Are there any requirements for SAH/SHA eligibility?
  • It must be medically feasible for the Veteran to reside in the home. The home must be so adapted as to be suitable to the Veteran’s needs for living purposes, both now and in the future.
  • It must be financially feasible for the Veteran to acquire the home with the assistance provided by the grant, and the Veteran may have to satisfy ownership requirements.
Temporary Residence Adaption (TRA)
  • A TRA grant may be used by Veterans who are/will be temporarily residing in a home owned by a family member. This assistance is to be used to adapt the family member’s home to meet the Veteran’s special needs at that time.
Where does a Veteran find out if he/she is eligible?
  • The Veteran can go to any VA office, but preferably the VA office where the Veteran’s claim records are located. A determination will be made as to the Veteran’s basic eligibility and whether it is medically feasible for the Veteran to reside in a specially adapted home.
How will the Veteran be advised if he/she is eligible?
  • A notice will be sent from the Compensation Service notifying the Veteran of benefits.
  • A notice of eligibility for SAH/SHA will be sent to the Veteran.
  • An SAH Agent will contact the Veteran to explain the program benefits, requirements for grant approval, and collateral VA benefit program.

VA Direct Home Loans for Native Americans Living on Trust Lands

  • VA direct home loans are available to eligible Native American Veterans who wish to purchase or construct a home on trust lands.
What can the loan be used for?
  • To purchase, construct or improve a home on Native American trust land.
  • To simultaneously purchase and improve a home, or to refinance another VA direct loan made under this program to lower the interest rate.
5 Easy Steps to a VA Home Loan:
  1. Make sure that your tribal organization or other appropriate Native American group is participating in the VA direct home loan program. The tribal organization must have signed a Memorandum of Understanding with the Secretary of Veterans Affairs, which includes the conditions governing its participation in the program.
  2. Apply for a Certificate of Eligibility.
  3. Decide on a home to buy and sign a purchase agreement or a contract with the builder to build the home. Make sure to include in the contract a provision that makes the contract void if you are unable to obtain a VA direct loan.
  4. Contact either your local housing authority or your VA Regional Loan Center to apply for the loan. An appraisal of the property will be ordered and you will be asked to provide information needed to verify your income and credit history.
  5. Close the loan and move into your new home.
Requirements for Loan Approval:
  • *To obtain a VA direct loan, the law requires that:
    • The applicant must either be or be the spouse of an eligible Native American Veteran who has available entitlement.
    • The tribal organization or other appropriate Native American group must be participating in the VA direct loan program. The tribal organization must have signed a Memorandum of Understanding with the Secretary of Veterans Affairs that spells out the conditions under which the program will operate on its trust lands.
    • The loan must be to purchase, construct or improve a home on Native American trust land. Individually allotted land is considered trust for this purpose.
    • The Veteran must occupy the property as his or her home; a loan for rental or investment purposes is not permitted.
    • The Veteran must be a satisfactory credit risk.
    • The income of the Veteran and spouse, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the other costs of owning a home, take care of other obligations and expenses, and have enough left over for family support.
    • All perspective applicants are encouraged to first contact either their local housing authority or a VA Regional Loan Center to discuss their financial situation and obtain a general idea of whether or not they might qualify for a home loan.

Questions and Answers

May a Veteran pay off a VA-Guaranteed Loan before it comes due?
  • Yes, a VA-Guaranteed Home Loan may be partially or fully paid at any time without penalty. Consult your lender.
May the maturity on a VA-Guaranteed Home Loan be extended to reduce the monthly payments?
  • Yes, provided the Veteran and the lender want to extend it and the extension provides for complete repayment of the loan within the maximum period permitted for loans of its type.
If a Veteran dies before the loan is paid off, will the VA guaranty pay off the balance of the loan?
  • No, the surviving spouse or other co-borrower must continue to make payments. If there is no co-borrower, the loan becomes the obligation of the Veteran’s estate. Protection against this may be obtainable through mortgage life insurance, which must be purchased from private insurance sources.
Does having a VA-Guaranteed Home Loan limit a Veteran’s right or ability to sell the property?
  • No, a Veteran may sell the property to a Veteran or non-Veteran at any time. However, if the loan was closed after March 1, 1988, and it will be assumed, the qualifications of the assumer must be reviewed and approved by the lender or VA.
Where can I learn more about the home buying process?
  • Visit the Department of Housing and Urban Development (HUD) website for useful information on shopping for a home and putting in an offer:
Does the VA offer counseling to Veterans having difficulty paying their mortgages?
  • Yes, even if the mortgage isn’t a VA-Guaranteed Home Loan, they can call 1-877-827-3702 to speak with a VA loan technician.

VA Eligibility Centers

All mailed applications for a Certificate of Eligibility (COE) for VA home loan benefits are processed by the Eligibility Center. Mailing Center:
Atlanta Regional Loan Center
ATT: COE (262)
P.O. Box 100034
Decatur, GA 30031Phone: (888)768-2132
VA Regional Loan Centers:
  • Atlanta:
    • GA, NC, SC, TN
  • Cleveland:
    • CT, DE, IN, MA, ME, MI, NH, NJ, NY, OH, PA, RI, VT
  • Denver:
    • AK, CO, ID, MT, OR, UT, WA, WY
  • Honolulu:
    • AS, MP, HI, GU
  • Houston:
    • AR, LA, OK, TX
  • Phoenix:
    • AZ, CA, NV, NM
  • Roanoke:
    • KY, MD, VA, DC, WV
  • St. Paul:
    • IL, IA, KS, MN, MO, NE, ND, SD, WI
  • St. Petersburg:
    • FL, AL, MS, Puerto Rico, U.S. Virgin Islands