Home Loan Guarantee

VA Guaranteed loans are available to eligible veterans who wish to purchase, build, repair, refinance or improve a home which is for their own personal occupancy. VA guaranteed loans are made by private lenders such as banks, savings and loan associations, or mortgage companies. VA does not actually make the loan, it guarantees a portion of it to the lender.

There are numerous options and financing plans available though private lenders for purchasing a home and veterans should always ‘shop around’ for the one that is most advantageous for them before making a final decision. Some important features of a VA Guaranteed loan are:

• No down-payment (unless required by the lender)
• No mortgage insurance premiums
• Right to prepay without penalty

Wartime service: Veterans must have served at least 90 days on active duty, any part of which was during the following periods, and have been discharged or released under other than dishonorable conditions. Veterans who served less than 90 days may qualify if they were discharged for a service connected disability.

WW11 - September 6, 1940 to July 25, 1947

Korea - June 27, 1950 to January 31, 1955

Vietnam - August 5, 1964 to May 7, 1975

Persian Gulf - August 2, 1990 to present (requires service for 2 years or the full period for which ordered to active duty)

Veterans must have served at least 181 days on active duty and have been discharged or released under other than dishonorable conditions. Veterans who served less than 181 days may qualify if they were discharged for a service connected disability. Peacetime service includes the periods:

July 26, 1947 to June 26, 1950

February 1, 1955 to August 4, 1964

May 8, 1975 to September 7, 1980

NOTE: Veterans whose entire period of active duty was between September 7, 1980 (enlisted) or October 16, 1981 (officers) and August 1, 1990 must have completed 24 months of active duty or the full period (at least 181 days) for which called or ordered to active duty, OR if the time served on active duty was for a shorter period, they must have been discharged for reasons of “hardship” or “reduction in force”, or for a service connected disability.

For active duty service beginning Aug. 2, 1990 (through a date yet to be determined), the veteran must have completed 24 months of continuous active duty or the full period (at least 90 days) for which ordered to active duty. If active duty was for less than 90 days the veteran may qualify if discharged for a service connected disability or for hardship or involuntary reduction in force.

Servicepersons on active duty are eligible after having served on continuous active status for at least 90 days during wartime or 181 days during peacetime. They remain eligible as long as they remain on active duty under honorable conditions. Once discharged, they must reapply and qualify as veterans.

Selected Reserve members who have been ordered to active duty may qualify as veterans, based on their active duty service, e.g., Reserve and National Guard members who have been ordered to active duty during the Gulf War.

Individuals who are not otherwise eligible and who have completed at least 6 years in the Selected Reserves or National Guard will be eligible if they meet at least ONE of the following criteria:

• Were discharged from the service with an honorable discharge; OR
• Were placed on the retired list; OR
• Were transferred to an element of the Ready Reserve other than the Selected Reserve; OR
• Continue to serve in the Selected Reserve

The surviving spouse of a veteran who died while on active duty or, from a service connected disability may also qualify for the home loan guaranty.

A veterans’ basic entitlement under the loan guaranty program is $36,000, however, this amount may be increased for certain loans when the loan amount exceeds $144,000. Generally, the loan guaranty cannot exceed 50% of the loan and the amount of the guaranty depends on several factors such as: the amount of the loan, the type of property and whether the claimant has used entitlement previously.