The VA loan is designed to allow military servicemembers to purchase a home without having to save up a sizable downpayment. It originated following World War II, when so many servicemembers were returning from war without the equivalent opportunities that those who did not go to war had. Millions who had been drafted, as well as those who had volunteered, were able to receive money for college in addition to home loans.
The VA loan continues to be available to servicemembers. There are some time requirements that they must meet in most cases. Those who are eligible for the VA loan include:
- Active duty servicemembers after 90 days of service
- Veterans with at least 24 months of service (may be less in some cases)
- National Guard members with at least 90 days of active service
- Military reservists with at least 90 days of active service
- Surviving spouses of those KIA
- Spouses of Veterans currently MIA/POW
There are some special cases where the time requirement is different or waived. These include discharges based on reduction in force, hardship, or service-connected disability. You may need to provide additional paperwork as you go through the VA home loan process.
Most of the time, Veterans with an Other Than Honorable (OTH), Bad Conduct, or Dishonorable discharge are not able to use the VA loan. Honorable, General, and Medical discharges work with the VA loan.
In order to get a VA loan, you will need to provide proof of one of the items above. This can be done by providing your discharge papers (DD-214) or a memo from your command regarding your current time in service. The VA uses this to generate a Certificate of Eligibility (COE). This document shows your lender that you are eligible to use the VA loan and becomes part of your loan application.