We just commemorated our service men and women on Veterans Day. Unless you are a Vet, it’s hard to understand the commitment that military service requires. There are over 25 million Vets in this country. Thanks to President Franklin Roosevelt (in 1944), Vet’s can get assistance in buying homes as a reward for their service to all of us. Known as the GI Bill of Rights, the VA Loan became law in 1944 and gives Vets who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous during peacetime. There is a two year requirement if the Vet enlisted and began service after Sept. 7th, 1980 or was an officer and began service after Oct. 16th, 1981. There is also a six year requirement for National guards and reservists.
The G.I. Bill offers education and housing benefits to Vets. The big deal for potential buyers is that Vet’s don’t have to put a single dime down as a down payment in order to purchase a property, whereas the minimum down these days for a non-Vet buyer for an FHA loan is 3.5%. A VA loan pretty much has the same requirements of all loans: 1) you still have to have a job and good job history; 2) you have to have decent credit; and 3) you have to live in the property. VA loans are made by any licensed bank, credit union or loan/mortgage company.
It’s really important for any Vet to work with a good lender when applying for a VA loan, as there is another layer of paperwork to the mortgage process-proving your military service and getting the right forms out of the Veterans Administration. A savvy lender will help you track down your discharge paperwork (DD-214 form) if it’s been lost through the Veterans Administration. I have always found the Veterans Administration willing to go overboard to help get a Vet into a home and expedite any paperwork needed.
A VA loan can be used to buy a house, a townhome, or a condo, or a farm if there is a residence on the land. You can use the loan to build a home from scratch, buy an existing home and improve it simultaneously, or buy a manufactured home and/or lot (the manufactured home must come with the lot, which is rare in some parts of Utah). The Vet can buy property with a married spouse or with another person they aren’t married to, however there are rules about that: 1) the Vet can buy/co-sign with another Vet; 2) the Vet can buy/co-sign with a non-Vet, but there’s a formula used to figure out how much of the Vet’s benefits can be used in the total transaction.
My lender friends tell me that most of the VA loans granted in Utah are used in the Ogden/Tooele areas-close to military operations. I’m always surprised at how many Vet’s don’t understand their benefits in how to buy a home, who think they don’t qualify to use benefits or think they have used their benefits up in a previous purchase. Again, get to a good lender and see how you can buy with no money down. And, thank you from all of us for your service to this country.