Military Loans for Service Members | Personal Finance World

From the end of World War II, military members have had access to specialized lending programs, designed to cater specifically to their needs. In 1944, this program was called the Servicemembers? Readjustment Act, and offered educational benefits, home loans, farm loans, as well as small business loans. Since then, the program has split into multiple programs to better serve the military members applying.

For those members looking to buy a home, they should look no further than the VA Home Guaranty Loan Program. This program has provided over 20 million veterans and service members with the dream of homeownership.

Why the VA Loan Program?

For many veterans, in their career, they experienced multiple deployments, moves, and assignments. This can take a heavy toll on a wallet, especially for those who served prior to the Servicemembers? Civil Relief Act (SCRA). However, the VA Loan program takes this into account and is specifically designed to accommodate veterans and service members with benefits not found in any other government guaranteed lending program.

Benefits of the program include:

• Optional down payment for qualified borrowers
• No private mortgage insurance
• Lenient eligibility requirements
• High loan limits
• No prepayment penalties
• Competitive interest rates

Out of all the benefits, almost 80 percent service members cited the $0 money down option as the number one benefit, allowing them to purchase the home they wanted with little to no money down. The $0 money down option always brings on skeptics worried of foreclosures and shortsales; however, the VA loan program maintains one of the lowest default and foreclosure rates out of every lending program.

Who is Eligible?

The good news for applicants is that nearly all service members and veterans are eligible for this program. Eligibility consists of a veteran serving for at least 90 consecutive days during wartime or 181 consecutive days during peacetime. National Guard and Reservists are also eligible if they serve for a minimum of six years. In addition to service members, some wives of fallen service members are eligible as well. Those with a dishonorable discharge are not eligible.

If a potential borrower falls into one of the abovementioned categories, they should apply for their Certificate of Eligibility (COE). This can be done through the VA or by a VA approved lender.

Keep in mind that most VA lenders require a credit score of at least 620; however, all are encouraged to apply since credit isn?t the only determining factor. Also, be prepared to provide copies of W2 statements and proof of employment.
Self-employed veterans should be prepared to provide at least two consecutive years of tax returns.

For more information on the VA home loan program and determining your eligibility, contact a VA approved lender.

Natalie Giammanco is a blogger for Veterans United Home Loans, the nation?s leading dedicated VA lender

Source: http://personalfinanceworld-neil.blogspot.com/2012/03/military-loans-for-service-members.html

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