How to Get a VA Direct Home Loan?

Are you Native American veterans looking for low-cost financing ways to finance a new home or improve the existing home? Here comes your opportunity!

VA direct home loans, guaranteed by US Department of Veterans Affairs, are designed for eligible Native American veterans who plan to purchase, construct or improve a home on Native American trust lands. You can also use the loans to refinance another VA direct loan under this program for a lower interest rate.

The maximum loan amount of a VA direct home loan can not exceed the reasonable value of the property estimated by Veterans Affairs. Upon your application, a qualified appraiser will be assigned by VA to perform the appraisal. The application fee, which is collected upon your loan application, will cover the cost of appraisal and other expenses involved in the processing of the loan.

After gaining a brief overview on VA direct home loans, you might be interested in how to apply for a VA direct loan. Well, the applying process is not that complicated as you think. Keep my five steps below in mind and your way towards a VA direct home loan would be out of hassles.

1. Check Eligibility

Whatever loan you are planning to apply for, the first thing you should make sure is that you are eligible. It is the same case for VA direct home loans.

Before submitting your application, you must make it clear that if your tribal organization or other Native American group is participating in the VA direct home loan program. To participate in the program, the tribal organization must sign a Memorandum of Understanding with the Secretary of Veterans Affairs, which contains the conditions that regulate the participation in the program.

Besides, you, the applicant, must meet the eligibility requirements as well. To qualify for a VA direct home loan, you must be a veteran who has had at least 90 days service and been honorably discharged from active duty service during:

? World War II (September 16, 1940 to July 25, 1947)

? Korean Conflict (June 27. 1950 to January 31, 1955)

? Vietnam-era (August 5, 1964 to May, 1975)

? Persian Gulf Conflict (on or after August 2, 1990)

If you are veterans who have served during peacetime periods or active duty military personnel, you must have had more than 180 days active service. If you are enlisted veterans after September 7, 1980, or officers with service after October 16, 1981, you must have had at least 2 years service in most cases.

If you are the Selected Reserve members, including the National Guard, who have completed 6 years of service and been honorably released, or have completed 6 years of service and are still serving, then you will be eligible for VA direct home loans. (However, as a reservist, you should be prepared for the possibly higher funding fee than regular veterans.)

Plus, you must use the VA direct home loan to purchase or construct the property of your own. Properties for rental or investment are not qualified for the loan.

Your credit score must be in a satisfactory level, otherwise, you will be refused by VA. The income of you and your spouse must be stable and sufficient for the monthly payments, associated fees, as well as the expenses for other obligations.

(To make sure of your eligibility, I advise you to contact your local housing authority or Veterans Affairs office to gain the exact information.)

2. Apply for the Certificate of Eligibility

You can get the Certificate of Eligibility easily by completing and submitting VA Form 26-1880. After finishing the form, mail it to:

The VA Eligibility Center

Attn: COE (262)

P.O. Box 100034

Decatur, GA 30031

3. Shop for the Property or the Builder

During this step, you should make the decision on the property to be purchased or the builder who will construct or improve your house. The builder of your home must be licensed to avoid possible dispute or troubles. When signing the purchase agreement or improvement contract, make sure to add the provision that the contract will be void if you are denied for a VA direct home loan.

4. Apply for the VA Direct Home Loan

To apply for a VA direct home loan, you can either contact your local housing authority or VA office. They will verify your eligibility, income, assets, as well as credit report to see if all your debts and payments are being paid on time. If your credit history is far from being excellent, you would be considered a risk and unable to obtain the loan.

After confirming that everything is well and the appraised value of the property is enough to cover the loan amount in the event that you default, your application will be approved and a date defined for the loan closing.

5. Close the Loan

During the processing of the loan, a diversity of fees will be charged, such as funding fee, appraisal fee, recording fee, etc. The types of fees connected to VA direct home loans may vary based on your local laws and regulations, your credit score, property value and more.

Listed below are the typical fees, which may be paid by you, property seller, or shared, for a VA direct home loan:

? VA appraisal fee

? Credit report

? Loan processing fee (up to $300)

? Title search and title insurance

? Recording fees

? Transfer taxes

? Survey fees

? Hazard insurance premium

Besides, you have to pay a 1.25% funding fee to Veteran Affairs unless you are a veteran who receives compensation due to a service-related disability. If you are qualified reservist or National Guard who are not on active duty, the funding fee will be 2% of your loan amount.

After closing the loan and getting the fund for your home purchase, construction or improvement, the next thing you need to do is waiting to move into the new home.

If you have any question or seek more detailed information about VA direct home loans, you can contact your local VA. The friendly Loan Guaranty personnel will be glad to answer all of your questions.

Thanks for your visiting! We're always trying our best to complete the mortgage information presented here to help you get the most of your mortgage. Bookmark our site and revisit now and then for the latest info.

Source: http://www.mortgage-guides.com/articles/how-to-get-a-va-direct-home-loan.html

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