How to Get a VA Home Loan

As a service member or veteran, your eligibility for a VA home loan unlocks easy access to homeownership. Backed and run by the U.S. Department of Veterans Affairs, the mortgage program was established after World War II and continues to be one of the most streamlined, flexible, accessible and competitive paths to buying a home.

Not only is it a great benefit, but there is an army of real estate professionals and lenders who are familiar with the ins and outs of the VA loan process and ready to help you land the home of your dreams.

Let’s explore the different steps you will need to take in order to take advantage of this great benefit and set yourself on the path to homeownership.

Starting the Process

The steps for securing a loan through the VA program are very straightforward, and there are countless lenders and realtors who are eager to work with VA-eligible borrowers to help them through the process. The steps are fairly uniform for most borrowers, beginning with obtaining your proof of eligibility, finding a lender, contacting a real estate agent, and beginning the search for properties. Be sure to take your time to understand each step along the way, asking questions so you best understand the process and all your options.

Secure VA Loan Certificate of Eligibility

The first hurdle in your path to owning a home through the VA loan program is to apply for your VA-backed home loan Certificate of Eligibility (COE), a government-issued document that validates your service history and your eligibility for the program. A COE will also indicate to a lender the amount the VA will guarantee on your loan.

Applying for your COE is easy and, in most cases, can be done directly through the eBenefits portal on the VA.gov website. Some lenders even offer links to COE applications through their portals. Under certain circumstances, an applicant may not be able to secure a COE via online channels and will need to explore other options for their application. In any case, applying for and securing your COE is a sound first step in the buying process.

Find a VA-Approved Lender

Deciding on a lender is one of the more important decisions in the buying process, so you need some information before you commit. First, know that not all lenders are prepared to work with VA-backed borrowers. Only those approved by the Department of Veterans Affairs are allowed to originate VA mortgages. Further, some institutions only handle conventional loans, or handle very few VA loans. You might first consider lenders that specialize in VA loans, who should provide greater insight to any problems that arise while also offering a smoother loan process.

Choose a Real Estate Agent

Choosing the right real estate agent is another decision where experience with the VA loan process could pay huge dividends. A good agent will know that not every property will qualify for VA loan standards and that some properties may have features that could derail your loan process. A VA-savvy agent should understand these barriers before you even set foot on a property. Perhaps more importantly, an experienced agent can help you save on expenses like closing costs and help you maximize your options for seller-paid fees and even commissions.

Searching for the Right Home

Searching for the right home might be the best part of the home buying process, but it comes with its fair share of work and challenges. For starters, you and your real estate agent will need to keep the search narrowed to properties priced within your pre-approved budget and VA loan limits. You’ll also need to find a good fit in a number of other categories, including the property’s condition, commuting distance to workplaces, the quality of local schools, and more. Lean on your real estate agent for information about the neighborhoods you are considering and weigh all your options.

After Finding Your Home

Once you find a home and you’re ready to commit to the purchase, a new phase of the buying process begins. Again, there are a number of steps to follow, and you’ll need to work the process in a timely fashion. Once you draft an offer and it’s accepted, you’ll begin to know the property through the inspection and appraisal process. Additionally, your lender will likely want more information from you as the date to close the sale approaches. Once all the paperwork is done and the contracts are signed, you need to do the heavy lifting of a house move!

Draft a Purchase Agreement

Making an offer to a seller comes in the form of a purchase agreement, or sales contract. Your real estate agent will study comparable sales in the area to help you work up an offer. Then, negotiations can begin between you and the seller. Be sure your offer includes a contingency that allows you to void the contract should the property fail a home inspection. Your agent should also include a “VA escape clause” or “VA option clause,” which is another contingency that will void the contract if the property doesn’t appraise for the contract price. Again, lean on your real estate agent for all available contingency options so you’re protected.

Home Inspection & VA Appraisal

Once the seller accepts your offer, the VA loan process really begins to take flight. Your lender will order a VA appraisal, conducted by an independent, third-party appraiser, to ensure the house meets minimum property condition requirements and to determine an opinion on the value of the house. (Note that the appraisal is not a home inspection, and the VA strongly suggests that buyers order an inspection to check for major defects within the home prior to purchase.) The property must appraise at least for the amount you are offering to the seller. Should the appraisal fall short of your offer, it’s possible that you will need to renegotiate the price with the seller or cancel the transaction. Should all go well with the appraisal and the property conforms to the VA’s minimum requirements, you’ll receive a “clear to close,” meaning you’re a big step closer to the closing table.

Prepare for Closing

Before you sit down to close your purchase, you’ll have an opportunity to review pre-closing paperwork and to provide your lender with any additional information. At least three business days prior to the closing, your lender is required to provide a Closing Disclosure. Your loan officer will review the disclosure with you. Read it carefully, as it includes loan terms, fees, closing costs, and your estimated monthly mortgage payments. If you’re unclear on any of the information, be sure to ask questions. Also, your lender may also ask you to provide additional information or documents prior to the closing.

You might also be allowed a final walkthrough of the home, which is a final chance to ensure that work and repairs you requested have been completed.

Close On Your New Home

When closing day arrives, be ready to sign sheets of paperwork and contracts. This step is extensive and allows for the legal transfer of ownership and may take place at a title company, escrow office or attorney’s office. Take your time to read everything before you sign and feel free to ask questions. You’ll also need to provide proof of a homeowners insurance policy and pay closing costs. Finally, once everything is signed, you’ll be handed the keys to your property.

Move In

Congratulations, you’ve completed the VA loan process and started the journey of homeownership! With the contracts signed and your keys in hand, it’s time to load a truck and begin the exhausting and rewarding process of moving in.