5 Things to Know Before You Use Your VA Eligibility
If you’re a veteran or an active-duty service member considering using your VA loan eligibility for a home purchase, refinancing, or other benefits, congratulations! The VA loan program is an incredible opportunity. However, before you jump in, there are several essential things you should know to make the most out of your benefits and avoid common pitfalls.
In this post, we’ll cover the five key things you must know before using your VA eligibility—helping you save time, money, and stress.
1. Understand What VA Eligibility Really Means
First, it’s crucial to understand what VA eligibility actually is. Having VA eligibility means you meet certain requirements set by the Department of Veterans Affairs (VA), which lets you access VA-backed loans for purchasing, building, or improving a home. However, eligibility does not guarantee loan approval; it simply means you can apply for VA-backed benefits.
Not sure if you qualify? Visit the VA.gov eligibility page to learn more.
2. You Still Need to Meet Lender Requirements
Many people believe that VA loans are guaranteed, but in reality, lenders have their own requirements such as credit score, income, and employment verification. The VA guarantees a portion of the loan, which encourages lenders to offer favorable terms, but approval is still based on your financial background.
Credit Score: Typically, lenders look for a score of at least 620.
Income: You must show sufficient, stable income.
Debt-to-Income Ratio: Most lenders prefer a DTI below 41%.
Tip: Speak with different lenders to find the best fit for your situation!
3. Understand the VA Funding Fee
One of the most misunderstood parts of VA loans is the VA funding fee. This is a one-time payment required by the VA to help offset the program’s costs to taxpayers. The amount can range from 0.5% to 3.3% of the loan amount, depending on several factors including your type of service and down payment.
Exemptions: Veterans with service-connected disabilities may be exempt from the funding fee.
For up-to-date rates, check out the VA’s official funding fee chart.
4. Your Eligibility Can Be Reused
Did you know that your VA loan eligibility can be reused? Many veterans think VA eligibility is a “one-and-done” deal, but you can actually use your benefit multiple times, under the right circumstances. As long as you’ve paid off (or sold) your previous VA-backed loan, your eligibility can be restored.
If you want to use your VA benefit again, you’ll need to complete a restoration of entitlement form through the VA.
5. Know What You Can Use Your VA Loan For
VA eligibility provides great flexibility, but not infinite options. Knowing what you can and can’t use your VA loan for is essential:
Allowed Uses:
Buying a primary residence
Building a new home
Refinancing an existing loan (VA IRRRL)
Making energy-efficient improvements
Not Allowed:
Buying investment properties
Purchasing vacation homes
For a full breakdown, review the VA’s home loan uses page.
Final Thoughts
Using your VA eligibility is a fantastic benefit for those who have served our country, but understanding the details ensures you make smart, informed decisions. Make sure you:
Verify your eligibility
Meet lender requirements
Prepare for the funding fee
Know you can reuse your benefit
Learn what you can (and can’t) buy
Want to stay updated or need more guidance? Check out VA.gov’s Home Loan page for official information or contact a VA-approved lender for personalized advice.
Thank you for your service, and happy home buying!
