You don’t deal with the VA directly when you secure VA financing. Instead, you work with experienced brokers, like myself that work with VA approved lenders. Working with someone with experience dealing with the VA loan program is important, as it has many nuances that other loan programs don’t have.

All VA lenders require your Certificate of Eligibility. This shows lenders that the VA will guarantee your loan. Without it, the lender puts themselves at risk. They wouldn’t provide 100 percent financing without knowing the government was backing up the investment. If you default on the loan, the VA guarantees the lender they’ll pay up to 25 percent of the amount they lose. Without a COE, lenders don’t know if the VA will provide the guarantee, which means they won’t provide VA financing.

The VA makes it easy to get your certificate. If you aren’t working with a lender yet, you can request your COE via mail or online through your eBenefits portal. If you are working with a lender, they may be able to access the certificate instantly, helping you move the process along faster.

Most veterans secure VA eligibility as long as they don’t have a dishonorable discharge. If you have a discharge that’s anything other than ‘honorable’ talk with your local VA office about your options.

Many people assume the VA loan is hard to get or that the VA makes it impossible to approve the appraisal. Neither is true. The VA plays a minor role in your loan approval process. They trust the VA lenders with the approval process. VA loans take the same amount of time start to finish as traditional loans, including conventional and FHA loans.

The VA guarantees 25 percent of your loan amount up to the county maximum. In Colorado, the county maximums range from $510,400 to $765,600. This doesn’t mean you’ll qualify for that much, but it’s the maximum amount the VA will guarantee for your area. You must prove you qualify for the loan amount chosen with your credit score, income, and current liabilities. The VA prefers borrowers to stay within a 41 percent debt ratio for VA loans.

Any home buyer should secure a pre-approval. While the VA doesn’t require it, smart buyers get pre-approved. It’s the first step in securing a home. The pre-approval letter gets your foot in the door to see homes and gives you the leg up on the competition when you bid on a home. The pre-approval letter tells you how much you can borrow, but it also lets the sellers and real estate agents know that you’re a serious buyer that’s capable of buying the home. Without it, many sellers won’t entertain your bid.

Each VA lender has different qualifying requirements, but in general, the VA requires a 620 credit score, 41 percent max debt ratio, and stable income/employment. Some lenders may require higher credit scores or lower debt ratios or the other way around. It varies by lender and specific circumstances.

If you sell the home the VA loan secures and pay the loan off in full, you may apply for restoration of your benefits. If you aren’t selling the home, you may use remaining entitlement to buy another home, but first, you must refinance your existing mortgage with the VA streamline refinance loan to remove the owner occupancy requirement so you can certify that you’ll occupy the new home you use your remaining entitlement on.

The VA offers a one-time exception to the rule, though. If your loan is paid in full, but you want to keep the property, you may apply for an exception. The exception releases the hold the VA entitlement has on your property, allowing you to restore it and use it on another property (primary residence).

VA financing is flexible in its property types. You may buy a single-family home, condo, townhome, or 1-4 family unit as long as you live in one unit. You may also buy a manufactured home, as long as you own the land it’s on and the home is at least 24 feet wide. All homes must pass the VA’s Minimum Property Requirements which signifies that the home is safe, sound, and stable.

Some lenders also offer VA new construction loans. If you’re building your own home from the ground up, you may need construction financing, which is a combination of temporary construction funding and a permanent mortgage.

VA financing is only for owner occupied financing. If you buy a 1-4 family unit with VA financing, you must live in one unit. You may rent out the other units, though, giving you the best of both worlds. If you rent a single-family home, condo, or townhome, you must first refinance with the VA streamline program releasing the owner occupancy requirements before you rent the home out.

Many borrowers choose the fixed rate loan, but the ARM or adjustable rate VA loan is an option too. If you want to take advantage of extra low interest rates or you know the purchase is temporary, an ARM loan may make sense as it saves you significantly on the interest charges since ARM loans have introductory interest rates. If you keep the loan and want to refinance out of the ARM, the VA streamline refinance loan is a flexible and affordable option.

The waiting period depends on the type of bankruptcy you file. The VA requires two years after a Chapter 7 bankruptcy discharge and one year after a Chapter 13 filing, but only with trustee approval and proof you made your last 12 months of BK payments on time.

The VA only guarantees first lien mortgages; however, you may tap into your home’s equity with a VA cash-out refinance. The qualification requirements are the same as the purchase mortgage. You may tap into 90 to 100 percent of your home’s equity depending on your qualifying factors and the lender’s requirements.

Yes. You may buy a new or existing home. You may even construct your own home, but your lender options may be smaller. As long as the home passes the VA appraisal requirements and is worth as much as you bid on it or borrow for it, you may use VA financing on it.

Veterans pay an upfront funding fee one time to secure VA financing. You pay it every time you take out a new VA loan. The original cost is 2.3 percent of the loan amount. Subsequent use costs 3.6 percent of the loan amount and borrowers using the VA streamline refinance option pay 0.5 percent of the loan amount.

Only select veterans are exempt from the VA funding fee. This includes veterans who were disabled or died during the line of duty or as a restful of their time in the military. Surviving spouses eligible to use their spouse’s entitlement are also exempt.

The VA guarantees loans for veterans only. The exception to the rule is your spouse. If you’re married and buy a home with your spouse, you get a full entitlement/guarantee. If you buy a home with a non-veteran who isn’t your spouse, the VA will only guarantee 50 percent of the loan. This means you will need a 12.5% down payment to make up the difference.

The VA guarantees loans for veterans only. The exception to the rule is your spouse. If you’re married and buy a home with your spouse, you get a full entitlement/guarantee. If you buy a home with a non-veteran who isn’t your spouse, the VA will only guarantee 50 percent of the loan. This means you will need a 12.5% down payment to make up the difference.

In the months leading up to your loan application, think about your credit. You may even want to pull your credit report from www.annualcrediteports.com (it’s free). If you have outstanding late payments, overextended credit, or derogatory credit reporting, do what you can to fix it. Bring late payments current, pay your debts down, and fix any derogatory credit. Make sure you keep proof of any changes you make in case the credit bureaus don’t report it right away.

Also, pay close attention to your debt-to-income ratio. Your total debts including your new mortgage shouldn’t exceed 41 percent of your gross monthly income (income before taxes). If they do, see how you can lower your debts.

VA entitlement restoration isn’t automatic. You must apply for it. You may do this once you sell the property and pay the loan in full. Contact your local VA office and ask for restoration.

Keep in mind, if another veteran assumes your loan, you must inform the VA of the assumption (and get approval) or your entitlement remains tied to the property.