What are VA Loans?

VA LOANS

A VA loan is a guarantee by the U.S. Department of Veterans’ Affairs (VA) and is designed to make available long-term financing to American veterans or their surviving spouses, so long as they do not remarry. The VA home loan program is intended to deliver home financing in situations in which private financing is not possible; in addition, the program is intended to aid veterans in purchasing properties without a down payment.

These additional facts may be helpful for applicants of VA loans:

  • Generally, eligible regions appointed by the VA as housing credit shortage areas include rural regions, small cities, and towns.
  • The VA does not require a minimum credit score used for pre-qualifying for a mortgage loan; however, most lenders require a minimum credit score of at least 620.
  • The VA loan program is reserved for veterans who have met the minimum number of days of completed service.

A Veteran who has used their entitlement to previously purchase a home may have entitlement left to purchase another one. If you previously purchased a home using your VA Benefits, you may still have some of that “Entitlement” available to you for the purchase of a new home. To calculate maximum entitlement available, consider the following:

  1. If your previous home was purchased using a VA Loan, and that loan was paid off by the new owners, the full entitlement may have been restored.
  2. If you sold your home to someone and allowed them to ASSUME your VA Loan, then you might have the full entitlement restored, if one or more of the purchasers were also veterans.
  3. If you still own the home and you are renting it out, you may be able to purchase a new home using your partial entitlement. However, there are several restrictions.

Allowable income sources used to qualify for a VA Loan include the following:

  • Retirement income
  • Social Security income
  • Child support
  • Alimony and separate maintenance
  • BAH
  • BAS
  • Disability income

Dependency and Indemnity Compensation (DIC)for a Surviving Spouse can also be included. In addition, stable, documented income from employers remains the best income source for VA loans.

VA Loan Certificate of Eligibility

After becoming eligible, you will need to then obtain a Certificate of Eligibility (COE). The COE verifies to the mortgage lender that you are eligible for a VA-backed loan. This page describes the evidence you submit to verify your eligibility for VA loans in Springfield MO and how to submit the evidence and obtain a COE.

Evidence Needed

The evidence you will need to present to your lender depends on the status of your eligibility. Read the table below to find out what category you fall into and the evidence you will need when applying with David Jacobson – OakStar Bank.

CategoryEvidence to Apply
Veteran or current / former National Guard or Reserve member who has been activated Federal active serviceDD Form 214 – required to have a copy showing the character of service (item 24) and the narrative reason for separation (item 28).
Active Duty ServicememberA current statement of service, signed by (or by the direction of) the adjutant, personnel office, or commander of the unit or higher headquarters and showing the following: your full name; Social Security Number; date of birth; entry date on active duty; the duration of any lost time; and the name of the command providing the information.
Current National Guard or Reserve member who has never been Federal active serviceA statement of service, signed by (or by the direction of) the adjutant, personnel officer or commander of your unit or higher headquarters and showing the following: your full name; Social Security Number; date of birth; entry date on duty; the total number of creditable years of service; the duration of any lost time; amd the name of the command providing the information.
Discharged member of the National Guard who has never been activated for Federal active serviceNGB Form 22, Report of Separation and Record of Service, for each period of National Guard service OR NGB Form 23, Retirement Points Accounting, and proof of the character of service.
Discharged member of the Selected Reserve who has never been activated for Federal active serviceCopy of your latest annual retirement points statement and evidence of honorable service
Surviving spouse of a Servicemember who died on active dutyIf you’re already receiving Dependency and Indemnity Compensation (DIC), you don’t need to send any documents. If you don’t receive DIC, please obtain the following: a copy of the DD Form 1300 (Report of Casualty) from the military; and a copy of your marriage certificate. It would also be a good idea to add a simple signed statement saying that you would like to apply for DIC. If you qualify for the home loan benefit, you probably qualify for monthly payments under DIC. Be sure to put the Servicemember’s Social Security number on all documents.
Surviving spouse of a Veteran who died as a result of military serviceIf you’re already receiving Dependency and Indemnity Compensation (DIC), be sure to obtain a copy of your award letter (generally, you will already have a record on file at a VA regional benefits office). If you don’t receive Dependency and Indemnity Compensation (DIC), please obtain the following: a copy of the Veteran’s DD Form 214; a copy of the Veteran’s death certificate; and a copy of your marriage certificate. It is recommended that you add a simple signed statement saying that you would like to apply for DIC. If you qualify for the home loan benefit, you probably qualify for monthly payments under DIC. Be sure to put the Veteran’ s Social Security number on all documents.

 

If you live in a rural area, you may find a USDA loan Springfield MO to be an option for consideration as well.