VA Loan Requirements

Eligible borrowers can buy a home with no down payment with the VA loan. Service members and veterans need to meet VA loan requirements to qualify for this benefit. Here’s what you need to know about VA loans.

VA Loan Overview

For eligible borrowers, the VA loan offers these benefits:

No-down payment required
No private mortgage insurance (PMI) required
Low-interest rates
Streamlined refinancing option via the Interest Rate Reduction Refinance Loan (IRRRL)

Service-Specific Requirements for the VA Loan

Not all service members and veterans qualify for the VA loan; borrowers must first meet certain criteria relating to their military service.

If eligible, borrowers can apply for and receive a Certificate of Eligibility, or COE, from the VA.

This certificate tells lenders you qualify for VA loan benefits and how much remaining eligibility you have. Borrowers can either request their COE from the VA directly or ask their lenders to request it on their behalf.

VA Loan Service Requirements for Veterans

For veterans, the period and characterization of your service determine your eligibility.

Depending on your particular dates of service, you qualify for VA home loan eligibility if you meet the following criteria:

Between Sept. 16, 1940 and July 25, 1947 (WWII):
- At least 90 total days of active-duty service
- Less than 90 days if you were discharged for a service-connected disability.

Between July 26, 1947 and June 26, 1950 (post-WWII period):
- At least 181 continuous days of active-duty service.
- Less than 181 days if you were discharged for a service-connected disability.

Between June 27, 1950 and Jan. 31, 1955 (Korean War):
- At least 90 total days of active-duty service.
- Less than 90 days if you were discharged for a service-connected disability.

Between Feb. 1, 1955 and Aug. 4, 1964 (post-Korean War period):
- At least 181 continuous days of active-duty service.
- Less than 181 days if you were discharged for a service-connected disability.

Between Aug.5, 1964 and May 7, 1975 (Vietnam War), or Feb. 28, 1961 and May 7, 1975, if you served in the Republic of Vietnam:
- At least 90 total days of active-duty service.
- Less than 90 days if you were discharged for a service-connected disability.

Between May 8, 1975 and Sept. 7, 1980 (post-Vietnam War period), or between May 8, 1975, and Oct. 16, 1981, if you served as an officer:
- At least 181 continuous days of active-duty service.
- Less than 181 days if you were discharged for a service-connected disability.

Between Sept. 8, 1980, and Aug. 1, 1990, or between Oct. 17, 1981, and Aug. 1, 1990, if you served as an officer:
- At least 24 continuous months of active-duty service.
- The full period (at least 181 days) for which you were called to active duty.

Between Aug. 2, 1990, and the present (Gulf War):
- Twenty-four continuous months of active-duty service.
- The full period (at least 90 days) for which you were called or ordered to active duty.
- At least 90 days if you were discharged for a hardship, a reduction in force, or for convenience of the government.
- Less than 90 days if you were discharged for a service-connected disability.

You separated from service after Sept. 7, 1980, or after Oct. 16, 1981, if you served as an officer:
- Twenty-four continuous months of active-duty service.
- The full period (at least 181 days) for which you were called or ordered to active duty.
- At least 181 days if you were discharged for a hardship, a reduction in force, or for convenience of the government.
- Less than 181 days if you were discharged for a service-connected disability.

VA Loan Service Requirements for Active-Duty Troops

For active-duty troops, VA loan service eligibility is easier to determine. You qualify for the home loan if you’re currently on active duty as long as you’ve served at least 90 days of continuous service. Most troops meet this threshold within the first few months of their initial enlistment.

VA Loan Service Requirements for the Reserve and National Guard

Both National Guard and reserve service members qualify for the VA loan if they meet one of the below criteria:

Completed at least six years of honorable service.
Mobilized for active duty for a period of at least 90 days.
Received a discharge due to a service-connected disability.

Exceptions to Minimum Service Requirements

Generally speaking, to qualify for the VA home loan, you must meet one of the above requirements. Exceptions to these minimum service requirements exist for certain service members. You may still be able to receive a COE if you were discharged for one of the following reasons:

Hardship.
The convenience of the government (you must have served at least 20 months of a two-year enlistment).
Early out (you must have served 21 months of a two-year enlistment)
Reduction in force.
Certain medical conditions.
A service-connected disability.If you believe you fall into one of the above categories, you can apply directly with the VA for a COE.

VA-specific Property Requirements for the VA Loan

The properties borrowers seek to purchase must also meet VA requirements in order to qualify for a VA home loan.

The federal government views the VA loan program as a path to veteran homeownership – not real estate investing. Put simply, the program exists to help veterans find a place to live. Veterans using the VA loan must move into and occupy a home for at least one year after its purchase.

The VA imposes certain minimum property requirements to ensure homes purchased with VA loans are immediately habitable. According to the VA documentation, these minimum property requirements exist to protect the interests of veterans, lenders, servicers and VA.

The VA enforces these property requirements through its appraisal program. VA-assigned professional appraisers must evaluate every property borrowers seek to purchase with a VA loan to confirm that the home is habitable and accurately valued.

In general, homes need to be safe for occupants, sanitary, and structurally sound in order to pass a VA appraisal. Here are some things appraisers will look for in a home:

Safe and functional mechanical systems.
Adequate heating systems.
Adequate roofing.
No signs of leaks in basements and crawl spaces.
No sign of termites, dry rot or fungus growth.
No lead-based paint (must be remediated if it existed in the past).

Following the appraisal, the VA will review the full report. If the home doesn’t meet the VA’s minimum property requirements exist, borrowers can ask the seller to fix the issues or walk away from the deal.

Lender-Specific Requirements for the VA Loan

After meeting the service-specific and property requirements, borrowers still need to demonstrate their financial health before a lender will approve a VA loan. Each lender will have different requirements, but most include the following elements:

Employment Status and Income

Income plays a major role in the entire mortgage approval process. Lenders need to confirm you make enough money to make your mortgage payments every month.

During the application process, you must report all sources of income. Common income sources include salaries, military retirement pensions and disability pay. Borrowers can also qualify with investment income, self-employment income and any other form of regular income.

For veterans with full-time jobs, lenders will also typically consider length of employment. Longer periods with the same employer suggest job stability, which can paint you as a reliable borrower.

Financial Assets

In addition to income, most lenders will require you to report all of your financial assets, including savings accounts, investment accounts or brokerage accounts. Lenders want to see this information for two main reasons.

First, you’ll need to pay out-of-pocket to cover some closing costs – even with a VA loan.

Access to cash from these accounts also makes you a more reliable borrower. For example, if you have $50,000 in savings and get fired from a job, you can still make your mortgage payments for a while. Without any savings, lost income will disrupt your ability to make regular loan payments.

While the VA loan doesn’t require cash reserves for all borrowers, these assets may still increase your likelihood for loan approval with certain lenders.

Credit Information

During the VA loan application process, lenders will request information about your credit. This will generally include a credit score and whether you have had any previous judgments or bankruptcies.

The VA does not mandate a minimum credit score, but most lenders want to see a FICO credit score of at least 660. A lower credit score won’t necessarily disqualify you, but it may make the VA loan process more difficult.

Debt-to-Income Ratio

With the info you’ve provided, the lender will calculate your debt-to-income ratio, or DTI. This number provides lenders with a quick snapshot of your ability to repay a loan. To calculate DTI, lenders take your monthly debt payments (including your future mortgage payment) and divide their sum by your gross monthly income.

Conceptually, the higher your DTI, the more of your monthly income you’ll need to make your debt payments. Therefore, most lenders want to see a DTI of 40% or less. Flexibility still exists here, depending on your overall financial situation.