Get a mortgage as a military borrower
The GI Bill offers numerous benefits for veterans, active-duty service members, and their families. However, it does not offer its own home loan program.
But military borrowers have access to the VA home loan program through the U.S. Department of Veterans Affairs, a mortgage program designed to help make homeownership more accessible.
The VA home loan program offers significant benefits, particularly when compared to other home loan programs, including:
- No down payment requirement
- No private mortgage insurance (PMI)
- Competitive interest rates
- Flexible qualifying requirements
Is there a GI home loan program?
While there is technically no home loan program including the GI Bill benefits, military home buyers who qualify for the GI Bill also likely qualify for the VA home loan program, which offers mortgages to eligible veterans, service members and their families.
Benefits of a VA home loan
A VA loan’s most significant benefit is that it requires zero down payment. Where other programs might require anywhere from 3 to 20 percent of the loan amount upfront, a VA loan will have no down payment at all, which can represent immediate savings.
Other VA loan benefits include:
- Competitively low interest rates
- No private mortgage insurance
- Flexible qualifying requirements
- Capped closing costs
- Loans are assumable
- No loan limits
- Can be used multiple times
VA loan eligibility & requirements 2024
VA service eligibility requirements
VA loans are intended for active-duty service members, veterans, and their families (including surviving spouses).
That means, there are service requirements that borrowers must meet to qualify.
Generally, eligible borrowers will have one or more of the following:
- 90 consecutive days of active service during wartime
- 181 days of active service during peacetime
- 6 years of service in the National Guard or Reserves
- A spouse who died in the line of duty or due to a service-connected disability or injury
Servicemen will demonstrate their qualifying military background with a Certificate of Eligibility (COE), a document that indicates the specifics of their military service and the total amount of their entitlement.
Borrowers can request a COE directly from the VA, or a VA lender can help you request it.
VA financial eligibility
The VA doesn’t set qualifying financial thresholds for its borrowers. These requirements will be set by the individual private lender issuing the VA loan. That means the minimums required to qualify will vary somewhat from lender to lender, and military borrowers may even be in a position to shop around if they are having difficulty qualifying.
That said, VA borrowers can generally expect to need a score of 620 or greater and a debt-to-income (DTI) ratio of 41 percent or less.
VA loan property requirements
In addition to qualifying requirements for the borrower, the VA sets requirements for the property that is being purchased with a VA loan. This is intended to ensure that the VA program is being used to get military borrowers into homes that are suitable primary residences — both safe and structurally sound.
The VA lender will order a VA appraisal — not to be confused with a home inspection — which will ensure the home meets the VA’s livability standards. Learn more about the VA Minimum Property Requirements (MPRs) here.Check your VA loan rates. Start here
Types of VA home loans
VA loans can be used to purchase or refinance a house. The types of loans available through the VA program include:
- VA Purchase Loans: These can be used to purchase a primary residence, including a multi-unit property of up to four units, a VA-approved condo or townhouse, or a manufactured home.
- VA Streamline Refinance: Also sometimes known as a VA Interest Rate Reduction Refinance Loan (IRRRL), these refinance loans are intended to help existing VA homeowners quickly and affordably lower their interest rate or improve their loan terms.
- Native American Direct Loans: These VA loans are specifically for veterans of Native American descent and can be used to buy, build, renovate, or refinance properties on federal trust lands.
- VA Cash-out Refinance Loans: These VA loans allow homeowners to convert their home equity into cash by replacing an existing home loan with a larger one and giving the borrower a lump sum of cash. VA cash-out refinance can be one option for converting a non-VA home loan to a VA loan.
What is the VA funding fee?
The VA funding fee is a percentage of the loan amount paid at closing. This money enables the VA home loan program to be self-sustaining and for the Department of Veterans Affairs to guarantee future VA loans.
The amount of the funding fee is variable and typically costs between 0.5 and 3.3 percent of the loan amount. The exact amount is determined by the nature of the borrower’s military service, the size of the down payment, the type of loan, and the number of times the borrower has used the VA loan program.
While the VA funding fee can be a significant upfront cost, it is a cost that is generally offset by the other savings that the VA loan program offers.
Finally, the VA funding fee can be financed into the overall loan amount and paid over time.Check your VA loan rates. Start here
GI loan FAQ
How much is a typical GI home loan?
While there is no GI home loan, the VA home loan program has no limits. That means borrowers with full entitlement can get a loan amount for as much as they like — provided they can qualify for it financially with a mortgage lender.
What are the benefits of a VA home loan?
The VA home loan is a product intended to help veterans, active-duty service members, reservists, and even some of their family members, to purchase a home.How much house can I afford as a veteran?
The amount of house that a borrower can afford with a VA home loan will depend on their budget, the interest rate they qualify for, and the size of down payment they can afford to make.
What is a Certificate of Eligibility (COE)?
The Certificate of Eligibility (COE) is a document that indicates the details of someone’s service with the armed forces and the amount of VA entitlement that is available to them. Lenders use the COE to confirm a borrower meets the VA service requirements.
Can I get a COE as the spouse of a veteran?
In some cases, a spouse may be able to get a COE, such as when the service member is missing in action, a prisoner of war, or has died in the line of service or from a service-related injury/disability.
Can I get a COE for a VA direct or VA-backed home?
COEs are required for all VA loans, including Native American Direct loans, or VA-based purchase or refinance loans.
How much is the funding fee?
The VA funding fee is typically between 0.5 and 3.3 percent of the total loan amount, depending on whether the borrower is purchasing or refinancing, whether or not they are a first-time borrower, how many times they have used the VA loan program, the size of their down payment, and the nature of their military service.
Are World War II vets eligible for the VA home loan program?
Yes, WWII veterans are eligible for the VA home loan program. Service members with 90 days of consecutive active service during wartime, including in Korea, Vietnam, and Iraq, are eligible for the VA loan program.Check your VA loan rates. Start here
Military home loans: The bottom line
While the GI Bill doesn’t offer a home loan benefit, the VA home loan program is a wonderful resource for service members looking to purchase or refinance a home.Time to make a move? Let us find the right mortgage for you