Learning the Basics and History of Veterans Affairs Loans If you or someone you love qualifies for a veterans affairs loan, you will want to learn as much about them as possible. Commonly abbreviating as VA loan, veterans affairs loans are loans offered to veterans that do not require a down payment.
Who Qualifies for a VA Loan You may be wondering who a person qualifies for a va loan. To qualify for a va loan, a person must have been in the active military, naval or air service, and discharged or released from active duty because of honorable reasons. It is important to note that you can still qualify for a va loan if you served on the Reserves or the National Guard, but you had to have served for six years or more. Spouses (who have not remarried) of POWs, MIAs, and Reserve and Guard members are also eligible to receive a va loan, if they meet the basic qualifications for the loan. As far as rates go, there is no hard and fast rule about rates for va loans. That is up to you and your lender to negotiate. Here is a little bit about the history of va loans, in case you are interested. The va loan originated in 1944, with the passing of the Servicemen’s Readjustment Act. This act extended many different kinds of benefits to veterans. Because of this Act in 1944, the Veterans Affairs office can guarantee or insure business, home, and farm loans made to veterans by lenders and institutions. Since this program has been in existence, the VA office of the government has insured about 18 million loans to veterans. The VA office can make direct loans if a veteran wants to buy or build a home or farm. The VA office can also help with loans that involve repairing or altering a home that the veteran already owns. Anything that would involve improvement of the dwelling can count as a va loan.
The Veterans Housing Act In 1970, the Veterans Housing Act was passed. This act removed all termination dates from the application process for VA-guaranteed housing loans. This made it easier and less stressful for veterans to secure housing loans. Additionally, this amendment made it possible for veterans to secure loans on mobile homes.
Up until 1992, VA-guaranteed loans were only available to individuals who served on active duty for specified periods of time. But in 1992, all of that changed. With the help of the Veterans Home Loan Program Amendments of 1992, eligibility was extended to include both Reservists and National Guard members who have served for at least six years. It is important to know, however, that these individuals usually must pay a higher funding fee when getting a VA home loan. With a va loan, the government usually does not actually give direct loans under the act. The government simply guarantees loan provided by other lenders and institutions. It is up to the veterans and their spouses to secure on their own their loan. The government will just come in to guarantee the lender against loss of principal is the buyer somehow defaults.