Wondering how much money you can borrow with a VA loan? Want to know more about Specially Adapted Housing (SAH) Grants? Top VA specialized lender answers the most common questions about the VA home loan benefit.
Got a burning question about VA loans or SAH grants? You’re not alone. That’s why VA-approved lender, iFreedom Direct®, has compiled answers to the five most frequently asked questions about the VA home loan benefit. Basic information about VA loan eligibility, entitlement and qualifying, as well as SAH grants, is covered to help educate military members about their hard-earned benefit.
1. My Certificate of Eligibility (COE) shows entitlement of $36,000, for a loan up to $144,000. Is that the limit on what I can borrow?
VA-eligible borrowers with “full entitlement” have enough VA backing for a loan up to $144,000. But that’s just basic entitlement. Something called Tier II or “bonus” entitlement provides additional backing for loans over $144,000 and up to $484,350 (even more where loan limits are higher). So, if you’ve just received your COE in the mail and it says your basic entitlement is $36K, don’t jump to conclusions. You may have access to a higher loan amount. Your entitlement figure lets your lender know large a loan you are eligible for under the VA program. You’ll still have to qualify for that amount based on credit and income. Contact your VA Regional Loan Center or a VA-approved lender for help in understanding your entitlement.
New VA Home Loan Limits Coming Jan. 1, 2020
Starting Jan. 1, 2020, when the new law takes effect, the VA will not cap the size of a loan a veteran can get with no money down, paving the way for veterans to buy higher-value homes. Of course, the lender may still issue a cap and deny a large loan. But the denial won't be due to VA home loan rules.
2. What is a Specially Adapted Housing Grant?
Specially Adapted Housing (SAH) grants have helped disabled Veterans live more independent and barrier-free lives in their own homes. Eligible Veterans can get up to $90,364 that may be used to build or modify homes to best suit their needs. Modified bathrooms, adapted kitchens and bedrooms, walkways and ramps, modified garages, doors, windows and flooring are common improvements that can make a disabled Veteran more comfortable.
You may qualify if you have a permanent and total service-connected disability. Here are some conditions that qualify:
- Loss of, or loss of use of both arms and/or both legs
- Blindness in both eyes, or sight limited to light perception
- Certain severe burn injuries
- Certain severe respiratory injuries
- ALS (Lou Gehrig’s Disease)
If you think you might qualify, call your local VA benefits office to apply, or go to VA.gov for more information. The VA, not your lender, will determine your eligibility for an SAH grant. To read about disabled Veteran John Swanson’s journey to homeownership using his VA loan benefit and an SAH grant, click here.
3. I’ve heard it’s hard is it to get a VA loan. Is that true?
According to figures from the VA, most eligible Veterans who apply for VA loans get approved—72% in 2018 to be exact. As with any mortgage, there’s a process involved in obtaining a VA loan. That process consists of six steps:
Six Steps to a VA Loan
- Choose a lender
- Obtain a Certificate of Eligibility
- Pre-qualify (optional)
- House hunt/sign purchase contract
- Lender orders appraisal/finish loan application
- Close and move in
One of the key questions in people’s minds is, “Do I qualify?” Lenders determine whether a borrower is qualified based on a combination of factors, including credit score, income and debt-to-income (DTI) ratio. A credit score in the “fair” range may be good enough to start the process, as long as a borrower meets other specifications. In addition to meeting the lender’s credit score requirement, a borrower must show a stable and ample source of income. The VA’s acceptable debt to income (DTI) ratio is 41 percent. However, if you exceed that figure, underwriters have some leeway to approve your application if you have certain compensating factors.
4. How do I know if I qualify for VA mortgage benefits?
If you’ve served in the Army, Navy, Air Force, Marines, Coast Guard, Public Health Service Corps, or National Oceanic and Atmosphere Administration (NOAA) Corps, you may have earned VA loan benefits.
You may be eligible if you:
- Served 2 years Regular Service
- Served 6 years Reserves/National Guard
- Served 90 days Active Duty during war-time
- Served 181 days Active Duty during peacetime
- Released early for duty-related disability
- Are a surviving spouse of a Veteran (see Question 5)
- Are a cadet or midshipmen of a U.S. military academy
- Are a member of certain other Federal service organizations
The best way to determine whether you’ve earned the VA loan benefit is through a Certificate of Eligibility (COE). You can request the document from the VA online or through the mail. Also, in most cases, a VA-approved lender can obtain a borrower’s COE within minutes upon request.
5. I’m the widow of a Veteran. Do I have access to VA loan benefits?
Surviving Spouses of Veterans who meet certain criteria may be able to utilize the VA home loan benefit to buy or refinance a home. If you survived a spouse who was rated totally disabled for the VA-quantified period of time, and who was eligible for compensation at time of death, you may be eligible. Survivors of Veterans who died on duty or of duty-related causes may also meet eligibility. Surviving spouses of MIA and POW missing for 90 days or more may receive limited benefits. And, thanks to a new law that recently went into effect, certain surviving spouses of Veterans who died of any cause may be eligible as well. A VA-approved lender or the Department of Veterans Affairs can assist you in determining VA home loan eligibility for surviving spouses.
Ready to Get Started?
If you're ready to get started, or just want to get more information on the process, the first step is to get multiple rate quotes with no obligation. You can then discuss qualifications, debt to income ratios, and any other concerns you have about the process with the lenders.