The VA Home Loan is not different from other mortgage loans in the matter of processing. In this loan, processing, which is very simple, is completed within an hour! You can apply for an eligibility certificate if you do not have one. For this, you have just to complete VA Form 26-1880 and give it to any of the VA Eligibility centers. Along with this form, you must give your latest discharge/separation papers, pointing out your active military service since 1940. After choosing the house and entering into an agreement with the seller, you may ask for, and get, an appraisal from the VA, and choose the lender and apply for the loan.
Whoever may be the lenders, they will try to get the required details relating to your credit history and monthly income. This they will do when the appraisal is being done. If the lender is authorized by VA to do automatic processing, he will approve the loan immediately on receipt of the VA or LAPP approval. He will not even wait for the views of the VA on the credit application. Your application will, however, be sent to the local VA’s office, if it has to approve the loan first. After some time, the VA’s office will convey its decision in the matter.
Ideal for Service Members as well as Veterans
The VA loan program has a lot of benefits for service members and veterans. How does this program work? You cannot get a VA Home loan simply because you have served in military; you should have served with merit and honor. If you have not been discharged honorably, you will not be eligible for the loan. There is another criterion, i.e. ‘Time in Service’ to decide on the eligibility. You should have been in service for a minimum period of ninety days, during war time; and during peace time, a minimum period of service for 181 days is required.
For such of those belonging to Reservist or General Company, they should have put in six years of service. In case they have been in ‘active duty’ for more than three months, this ‘six year’ condition will not apply. All these references regarding the service requirements relate to the period beginning August 1990 and up to now. (For full particulars, you may go to VA’s web site.) The VA’s office will issue the eligibility certificate, which will certify the eligibility for a loan.
Normally, either a bank or a financial institution will be the lender in a VA loan. The VA just guarantees the loan. The member-lender will not lose anything, in the event of default by the borrower. The lender has the right to refuse to give the loan even if you have an eligibility certificate. Also, just because you are a veteran, you cannot take it for granted that the loan will be given. There may be more clarifications needed, about which let us see later.