According to data from the US Department of Defense and the Census Bureau, there were a little more than 17 million military veterans and just under 2 million active-duty and reservists, As of 2021. But only a fraction of those men and women take advantage of Veterans Affairs benefits to buy or refinance a home. The truth of the matter is that many more could make use of a VA Loan, but they don't for a variety of reasons. 

The biggest reason that more VA home loans aren't applied for is that many Veterans and active Military personnel may not know all the benefits available to them. And that's too bad because non-military homebuyers could only wish they had access to these advantages. 

Another reason is that some Vets and active-duty members may think that getting a VA Loan is too complicated and that there are too many hoops to jump through in order to apply and/or qualify. Nothing could be further from the truth, especially if you're working with a lender who has taken the time to really understand the VA programs and build programs to get the word out, like our Movement Military approach.

What you don't know about VA Loans could be holding you back

It would be a shame if a qualified US Veteran or member of the military bought or refinanced a home without first looking at the advantages of a VA Loan. So, dive into these five things about the program that you might not be aware of, and then let us know if we can answer any additional questions about VA home financing. 

1 – VA Loans are government loans but are available from local lenders

Many Vets and service people don't take advantage of the VA Loans because they think there will be a lot of red tape and government hoops to jump through. That's a big mistake.

The VA home loan is available from private banks, credit unions and mortgage companies like Movement Mortgage, not from the US government itself. The Department of Veterans Affairs does not handle applications, approve mortgages or refinancing, or issue funds. So, from our perspective, customers taking out a VA Loan find it no more complex than taking out any regular mortgage — in fact, we make it easy!

With a VA guaranty, the US Department of Veterans Affairs provides insurance to the lender, assuring that the loan will be repaid if the Veteran can no longer make payments. In exchange for that guarantee, the lender issues loans at terms that make it easier for the military family to qualify. It's a win-win situation because our Vets and active-duty personnel get into the homes of their dreams while still enjoying the speed and convenience of working with a local lender of their choosing.

2 – VA Loans have lower rates & less risk

While a conventional mortgage, commonly referred to as a 30-year fixed mortgage, is available to everyone who qualifies, mortgages taken out with a VA Loan are only available to US Veterans, active-duty military and members of the reserves or National Guard. 

That's because the US Veterans Association backs mortgages taken out with a VA Loan, promising they'll repay between 25% and 50% (depending on the loan balance) if the loan defaults. This makes VA Loans a much lower risk for lenders, who then pass on the savings to military homebuyers. 

Lowering the risk even further is the fact that Veterans and members of the armed forces take homeownership seriously. This means that VA Loans have among the lowest foreclosure rates of any loan type — something lenders love. 

The savings come in the form of lower interest rates — about 0.25% lower than the current rate on a conventional loan — making the overall cost of borrowing the money to buy a home more affordable over the long run. 

3 – VA Loans are more lenient on prior credit issues

Every lender has its own threshold on what qualifies you for a home loan. Some want a clean credit history or have a credit score target they want their qualified buyers to hit. Having a lower credit score, bankruptcy or foreclosure can sometimes close a door in your face. 

Not so with a VA home loan. Guidelines from Veterans Affairs do not state a minimum credit score to qualify. This lets lenders approve loans for applicants with lower scores. Plus, if military borrowers have at least two years of clean credit following a foreclosure or bankruptcy, the VA considers their credit re-established. This is excellent news for Vets who have suffered an economic setback due to a loss of income, medical emergency or other unforeseen events. 

The exception, though, is if a home purchased with a VA Loan goes into foreclosure. If this is the case, the military borrower may need to pay back the total amount owed on the foreclosed VA Loan in order to use their VA home loan benefits again.

4 – VA Loan benefits never expire 

VA Loan eligibility is based on the length of time and the period in which the mortgage applicant served in the military. Those on active duty will generally qualify for a VA Loan after 90 days of service. Members of the US National Guard and reservists must wait for at least six years to be eligible unless called into active duty beforehand.

Once a service member is eligible for the VA home loan, they're eligible for life. Even if you served 30 or 40 years ago, if eligibility can be established, it never goes away.

To check eligibility, you must first get from the government a document verifying proof of military service called a DD Form 214. With the form in hand, any VA-approved lender can request the VA Certificate of Eligibility (COE) on your behalf. Or, you can request the COE directly from the US Department of Veterans Affairs here. 

5 – Surviving spouses may be eligible to apply for VA Loans

Surviving spouses of fallen military personnel, prisoners of war or service members who went missing in action may also be eligible, with the stipulation that they have not remarried. Like a service person who was — or would have been — eligible, surviving spouses can also buy a home with no downpayment or mortgage insurance required. 

Additionally, the VA funding fee is waived for eligible surviving spouses. For more on what to know about VA Loans if you're a spouse in a military family, see this recent blog post.

Is a VA Loan right for you?

If you're a US Veteran, active-duty service member, a reservist or a member of the National Guard and you're looking to buy a home, refinance a VA Loan or want to learn more about VA homeownership benefits, reach out to us today. 

Movement Mortgage can answer your questions about eligibility and help you make the right decision regarding a VA Loan. Find a loan officer in your area to get started or apply online.