Find Out About Popular Veteran Loan Programs

Veterans

After retiring from military service, veterans are provided access to a variety of different home loan options that are offered by the U.S. Department of Veterans Affairs (VA). These home loans from the VA can be used to purchase a new home, reduce your mortgage payments or get cash out of your home’s equity. Many of these home loans are offered to all veterans, while others have more specific eligibility criteria, much like how grants from the VA work. 

As a veteran, homeownership becomes more attainable if you receive a loan that is backed by the VA. Since loans offered by the VA generally come with low or no down payment options, securing one can help you finance the purchase of a new home. Additionally, you can receive financial assistance from the VA by modifying your mortgage and making monthly payments more manageable. 

About VA-Backed Mortgages for Veterans

One of the most beneficial loans available for veterans is known as a VA purchase loan. These home purchase loans are a great choice for veterans because the loans are guaranteed by the VA. A loan that is guaranteed by the VA is a less risky venture for lenders since the Department of Veterans Affairs ensure that they will cover the loss if a property is foreclosed. Since there is less risk involved, veterans can secure better terms on their VA-backed loans.

For most veterans, a VA-backed loan will be a far better option than choosing a traditional loan for financing a home purchase. Veterans who opt for a VA guaranteed loan will get a number of benefits including:

  • No down payments required.
  • Borrowers of VA loans will not have to pay for private mortgage insurance (PMI), which is required for most conventional loans.
  • Lower interest rates than conventional loans.
  • Lower closing costs than conventional loans.
  • No penalties for paying off the entirety of the loan before schedule. 

VA-backed home loans allow borrowers to buy their first property, build a new home or make changes and adaptations to their current place of residence. In order to qualify to receive a VA guaranteed loan, veterans must receive a Certificate of Eligibility (COE) from the VA before meeting with a lender. Borrowers must also meet all of the lender’s requirement, such as income or credit score, before being able to secure a loan. 

Note: VA-backed loans can only be used to purchase a home that the veteran plans on using as a primary residence.

About Cash-Out Refinance Loans for Veterans

Another home loan option for veterans is to secure a cash-out refinance loan that is backed by the VA. This is a good option for veterans who are already homeowners but want to secure better terms or rates on their current mortgages. Cash-out refinance loans allow veterans to either take equity out of their existing loans if they need additional funds or refinance a non-VA loan and guarantee it as a VA loan.

In order to refinance a mortgage into a VA loan, veterans will need to obtain a Certificate of Eligibility and locate a lender that offers that service. Borrowers are encouraged to research different providers in order to find a reputable lender that provides the required services.

Learn About the Native American Direct Home Loan (NADL) Program for Veterans

Native Americans who have retired from military service and veterans with a Native American spouse may be eligible for the Native American Direct Home Loan program from the VA. The NADL is the only home loan that is generated directly from the VA. 

Borrowers can use these loans in order to purchase, renovate, add accommodations to or build a home on Federal Trust land. In some cases, an NADL loan can be used to refinance an existing mortgage in order to secure better interest rates. Some of the benefits of securing an NADL loan from the Department of Veterans Affairs include:

  • No down payment requirements
  • No requirement to purchase private mortgage insurance
  • A 30-year fixed-rate mortgage that is generated with optimal interest rates

Find Out About Interest Rate Reduction Refinance Loans for Veterans (IRRRLs)

Another home loan option available to veterans is an Interest Rate Reduction Refinance Loan that is backed by the VA. These loans are helpful for veterans who would like to lower their mortgage payments or switch from a variable interest rate to a loan that has a fixed interest rate. Veterans must provide a COE to a private lender in order to prove their eligibility to receive one of these loans.