VA loans are designed to help veterans, and the surviving spouses of veterans, apply for and obtain financing for a home. As a loan officer, knowledge of VA loans and how you can serve veterans is paramount in their ability to purchase a home.

mortgage typesHere is what you need to know about VA loans as a loan officer:

Applicants Need A VA Approved Lender

VA loans are privately funded and partially backed by the Department of Veteran Affairs and funded by private lenders. As such, applicants will need a VA approved lender with the resources and knowledge to guide them through the ins and outs of VA loans.

Applicants Need To Provide A Certificate Of Eligibility

Before applicants can get preapproved for a VA loan, they must first obtain a Certificate of Eligibility (COE) from the U.S. Department of Veteran Affairs. This certificate confirms to the lender that the applicant qualifies for a VA loan and can continue to choose their preferred loan type, such as:

  • Native American Direct Loan (NADL)
  • Purchase loan
  • Cash-out refinance loan
  • Interest Rate Reduction Refinance Loan (IRRRL)

If the applicant has previously purchased a home with a COE, they may be able to get the entitlement “restored” in order to purchase another home with a VA loan.

Applicants Can Get Lower Down Payments & Interest Rates

VA loans have lower down payment requirements, thanks to their backing by the Department of Veteran Affairs. In fact, up to 90% of borrowers used a VA loan with no down payment, while others paid as little as 5%.

Applicants Need To Be Aware Of Program Changes

The VA loan program can change at any time and applicants need to be kept up to date. Programs changes can affect their eligibility and features such as the size of zero-down VA loans. For example, the Blue Water Navy Vietnam Veterans Act of 2019 went into effect on January 1, 2020 and was a change from where there were amount limits specified for a veteran’s county.

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