How Do Veterans Administration (VA) Home Loans Work?

By Tim Lockhart

Tim is a 6th generation Texan, grew up in Arlington TX, and after having served 20 years as an Air Force Civil Engineering officer and managing over $1 Billion in facility construction and renovation projects, he retired in 2013. The experience, work ethic and leadership gained in the Air Force propelled him in only 4 years to build a real estate business ranking in the top 20% of agents worldwide in Keller Williams Realty the #1 Real Estate Company in the World. Tim is a Certified Military Relocation Specialist providing the highest level of service to his clients.

Are you interested in a VA home loan but aren’t sure how they work? Acronyms and technical jargon can be confusing, but I am here today to clear things up.

VA stands for Veteran Affairs. With a VA direct home loan, the U.S. Department of Veteran Affairs backs your home loan and guarantees a portion of the loan you get from a separate lender. Either way, you get some great benefits, including better terms than a conventional loan and no down payment.

With a VA home loan, you can buy a home or a condo, build a new home, and make changes or add new features to make your home more energy-efficient. You do have to qualify to obtain this type of loan, however. To get a VA home loan, you need to be eligible for the VA’s Certificate of Eligibility (COE), meet standards for credit and income set by the VA and your lender, and live in the home that you’re trying to buy (as opposed to renting it out, for example).

Then comes the process of finding a home. You start by applying for your COE, take a look at your finances to make sure you’re ready, choose the lender and real estate agent that are right for you, and then shop around for homes. Once you’ve found the home you want to buy, work with your agent to put together your purchase agreement. Make sure it includes a “VA escape clause” or “VA option clause,” which would allow you to void the contract if the property doesn’t appraise for the contract price.

The rest of the home-buying process is very similar to buying a home with any other type of loan. You have the house inspected and appraised, review and turn in any necessary paperwork, close on the house, and move in!

Overall, as long as you have help from a trusted lender and real estate agent, you can go through each step seamlessly. Also, if you’re interested in learning more, you can always go on the VA’s website, where you can find testimonials from people who have purchased a home with a VA loan, learn more about the benefits and the process, and watch helpful videos on things like where to start and the true costs of homeownership.

If you have any questions or are interested in getting this process started, I would love to help you! Reach out to me by phone call or email anytime. I look forward to working with you.