VA Mortgage Loan Guidelines

Finding a mortgage with favorable terms is challenging for anyone, but especially for veterans. That's where the Veteran Affairs mortgage loan program steps in to help. The program's goal is to get them lower interest rates than they'd get with a regular commercial loan. They also help them do it without private mortgage insurance or a down payment. However, VA loans do have different conditions than conventional loans. To qualify, you'll need to learn to apply for loans the army way.

Eligibility

You can be all you can be in the service, but it doesn't mean you automatically qualify for a VA loan. Since September 7, 1980, it was only an option for enlistees who had put in at least two years -- or six with the National Guard or reserves. Vets who signed up before that date qualify if they chalked up at least 90 days of service during wartime or 180 days in peacetime. Regardless of when you enroll, a dishonorable discharge takes you out of loan consideration. Surviving spouses are only eligible when the veterans die in the line of duty or are missing in action for more than 90 days.

Property Types

A house is not a loan-worthy home in the eyes of the VA loan givers unless it meets its requirements. As of 2013, for example, one of the rules was the property had to be a one- to four-unit residence. It also has to be your primary residence. Sorry, no vacation or investment properties allowed. The VA also demands you move in within 60 days of closing the loan. With so little time for second guessing, it may help to pick out a property in advance.

Loan Restrictions

The VA doesn't have limits on how much you can borrow, but it does cap how much liability it'll take on if you default. This generally cuts down on how much money providers will risk on you. The liability cap varies depending on the average property values of your county. For instance, in 2013, the general mortgage limit was $417,000. However, the mortgage limit in counties with particularly high property values, such as Nantucket, Massachusetts, and San Miguel, Colorado, was $1,094,625.

Fees

As favorable as VA loan terms are when compared with commercial loans, they still come with plenty of expensive fees. The priciest one you'll deal with is the VA funding fee, which can add up to 3 percent of the loan amount. However, if you can't afford to pay this out of pocket, you can include it in the mortgage loan. You'll also need to take care of a 1 percent lender fee, as well as the credit report and recording fees that hound borrowers at any level.