6 Ways To Know If You Qualify For A VA Loan

va-loan-qualification-tipsVA loans are attractive because they come with a government guarantee and flexible terms, such as lower credit score requirements and no down payment. Although VA loans are typically easy to secure, they’re not guaranteed to everyone who has served in the military; like all loans, you must meet certain criteria to qualify. In order to help you determine your eligibility before you risk running a credit check, here are some lesser-known conditions you must meet in order to qualify for a VA loan. If you meet these conditions, you can take advantage of one of the best government-backed loan programs in America.

1. You Must Meet Minimum Service Requirements

In order to obtain a VA loan, you must have served in the military for at least 181 days of active service during peacetime or more than 6 years of service in the National Guard or Reserves. What some people don’t know is that these restrictions are lax for wartime service members: if you’ve serve at least 90 consecutive days of active service during wartime, you meet the minimum service requirement.

Here’s a few more eligible beneficiaries you may not be aware of:

  • If you’re a current US citizen and served in the armed forces of a government that was allied with the United States during WWII, you can apply for a VA loan.
  • If you are a member of the following organizations, you can apply for a VA loan: Public Health Service, Cadets in the US Military, Air Force, Coast Guard Academy, midshipmen in the US Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with WWII service, and some others.

2. Spouses of Service Members May Qualify

Spouses of deceased or disabled service members may qualify for a VA loan if they meet the following conditions:

  • If the deceased service member died in the line of duty, the spouse qualifies.
  • If the disabled service member was injured in the line of duty, the spouse qualifies.
  • If the service member is MIA (missing in action) or a POW (prisoner of war), the spouse qualifies.

Keep in mind, if the spouse of a deceased, disabled, or missing service member remarries before applying for a VA loan, he or she won’t qualify for the loan; however, the VA terms won’t change once the loan is secured even if the spouse remarries.

3. You May Qualify Even If You’ve Suffered a Bankruptcy or Foreclosure

A previous bankruptcy or foreclosure doesn’t exclude you from receiving a VA loan. As long as you can prove you are credit worthy, you will likely still qualify. Make sure to pay your bills on time every month and keep a close eye on your credit score. Once two years has passed and you’ve maintained steady repayment of your debts, you can apply and you might be granted the loan.

4. You Don’t Need a Super High Credit Score

VA lenders are laxer when it comes to credit scores. As of May 2016, the average credit score for a traditional FHA home loan was 686. This score is provided to first-time homebuyers only, but rest assured you can qualify for a VA loan with a score lower than that and it doesn’t have to be your first home purchase. As long as any prior VA loans are paid off, you can qualify for a new one and the score requirements don’t change.

5. You Need a Job

As with most loans, you have to prove you can pay the money back. VA loan lenders typically want to see you have, at a minimum, two years of full-time employment; however, if you can prove a solid work history, you may be able to secure a loan with as little as six months of full-time employment. Ask your employer to write you a recommendation, and this may sway the lender.

Keep in mind, you don’t have to be employed by the military to qualify; you can work anywhere as long as you meet those above-mentioned service requirements.

6. You Can’t Use Your VA for Just Any Property

Unfortunately, VA loans are for primary residences only. This doesn’t include working farms, businesses, or rehabs (fixer-uppers). In most cases, the home must be move-in ready. Examples of acceptable properties include single family homes, condos, modular housing, and some multi-unit properties.

That being said, because VA loans are reusable, you can purchase a property, live in it, improve upon it, pay it off, and then use another VA loan to secure a new residence. You could move into the new residence, and sell or rent the previous property. One of the best things about a VA loan is that they have no prepayment penalty, so if you pay your home off early, you have a lot of opportunity for investment.