Military personnel, both current and past service members, have an option for a housing loan that many don’t even realize exists.
The VA loan program is a no-money down mortgage option available to these brave men and women, as well as select military spouses. VA loans are issued by private lenders and guaranteed by the U.S. Department of Veterans Affairs.
Originally established in 1944 as part of the Servicemen’s Readjustment Act, VA loans are for anyone who has served in active duty in any branch of the U.S. military for a minimum of 90 days.
In addition to not needing a down payment, the 75-year-old VA loan also doesn’t allow mortgage lenders to charge private mortgage insurance, which is another big benefit of the program. However, the borrower is required to pay a one-time funding fee on the home purchase, which can either be paid upfront or financed into the total cost of the loan. The funding fee for regular military members is 2.30 percent of the loan.
Additionally, non-active duty personnel, such as those in the Army Reserves or National Guard, may apply for a VA-backed mortgage as long as they have completed six years of service. The spouses of deceased or missing military members are also eligible if they have not remarried. Borrowers who received a dishonorable discharge from any military branch are not eligible.
Since its inception in 1944, the VA Home Loan Program has guaranteed over 28 million home loans. In fiscal year 2024 alone, the Department of Veterans Affairs guaranteed more than 416,300 home loans. Despite this, a significant number of the approximately 25 million eligible homeowners have yet to utilize this benefit when purchasing a home.
Source VA News
A chief problem is that many veterans, especially those not so recently discharged, aren’t entirely sure what the benefit is or do not realize that they actually have such a benefit. With the VA loan, the veteran can literally buy a home with little to no money out of pocket.
