VA Loans


VA loans, or Veterans administration loans, are an integral part of the US social financing system. As the term denotes, it primarily caters to war veterans or their surviving spouses (those who have not re-married), to help them be secure in their old age by assisting them get a loan for home financing with no down payment.

The origin of this benefit dates back to 1944, when a law was passed authorizing the US Department of Veteran Affairs to guarantee and insure loans for war veterans or their widowed spouses to live a life of dignity. These loans are disbursed by lenders who are authorized by government for the same purpose. What started as a social gesture has transformed itself major benefit for those who have spent their prime years fighting for the nation across different borders. Recently, in 1978, an amendment to the act ensured that this opportunity was extended to millions of American veterans whether they served in a war or not.

These loans work more or less on the same rules as a normal mortgage loan. The person desirous of such a loan has to find a suitable lender, who shall finance the home. It is available to those who can secure the necessary clearance and guarantee approval from Veterans Administration department. There are no provisions for disbursement of direct loans from the VA. The residences are normally in smaller towns or areas which are not so expensive, as there is a limit to how much the VA will guarantee. The maximum loan amount is subject to review from time to time, depending on the cost of living in a given area. Of course, this has spawned a great deal of enthusiasm among lending institutions, as such loans are safe from defaulting, since these are backed by the federal government itself. A lot of institutions have come up with some wonderful schemes to draw veterans towards them to apply for such loans.

There are a few conditions that need to be met for veterans to be eligible for VA loans. There is an online program called ACE – Automated Certificate of Eligibility, which has to be filled as a pre-requisite. In case data is not available for this, there is also the VA form 22-1880, which is a request for certificate for eligibility. This form has to be filled and sent to the regional Eligibility Center, enclosing a copy of DD214 discharge paperwork, and any other document, if available. In case the discharge has not been honorable, the department shall conduct an inquiry into the circumstances of such discharge and decide accordingly, on the eligibility.

It is only natural that the government takes care of its soldiers and former soldiers, those who have put in the prime part of their lives for the service of the nation.

Source by Ravisankar Poduval

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