What Is a VA Loan?
The Department of Veterans Affairs offers a loan for active-duty service members, veterans and their families. To be eligible, the active-duty service member must have served 90 days during wartime or 181 days during peacetime. The National Guard or Reserve requirement is more than six years of service.
Whether it’s due to misconceptions about the loan or lack of awareness, about 25% of both active-duty service members and veterans didn’t use a VA loan for their mortgage. Among the benefits of a VA loan are:
- Lower mortgage rates
- No down payments
- Higher debt-to-income ratios considered for the loan
- More flexibility if bankruptcy or foreclosure becomes an issue
These are great benefits for more than just first-time homeowners. VA loans can be used multiple times. If this surprises you, you’re not alone. According to a Navy Federal survey, about half of service members and a third of veterans didn’t know this, either.
How Do You Use the VA Home Loan a Second Time?
If you meet the eligibility requirements, there are no limitations on how many times you can use your VA loan. You’ll submit a Request for a Certificate of Eligibility (VA Form 26-1880) and send it to the regional VA loan center closest to you. In short, you must meet one of these qualifications to use the benefit again:
- You’ve sold the home you used your VA loan to buy and paid off that loan.
- Another qualified veteran assumes your loan and uses their entitlement for the same amount you used for your loan.
- You’ve repaid your loan but haven’t sold the house. (You can only do this one time.)
Is a VA Loan Only to Buy a House?
You have a few options on how you want to use your VA home loan. With this entitlement, you can buy a home, build a house or renovate your current home. This opens many opportunities to use your VA home loan and allows you to plan for the future.
Renovating your home can make it wheelchair accessible by lowering sinks or counters, adding ramps and widening doorways. You can also look at making your house more energy efficient, with options such as solar panels and replacing old appliances with more efficient ones. Adding a sunroom, second garage or mother-in-law suite are things to consider when planning future renovations.
With a VA loan, you can refinance your current mortgage through an interest rate reduction refinance loan, or IRRRL. This is a quicker and easier way to lower monthly payments or switch from an adjustable or variable rate loan to a fixed rate.
If you do not have a VA home loan, you can use the cash-out refinance option to secure one. To be eligible for this option, you must qualify for a VA loan; meet the VA and lender's credit, income and other requirements; and plan to live in the home you’re refinancing with the loan.
Find a VA Loan
If you're ready to move forward, or just want more information, the first step is to get no-obligation rate quotes.