You may be eligible for a loan from the U.S. Department of Veteran's Affairs (VA) to finance 100% of the value of your home with no mortgage insurance or prepayment penalties. Even the majority of closing costs can be funded.

The VA does not make loans. They just back loans. This is why you can borrow 100 percent of the home's worth at very low rates and with no mortgage insurance. They only allow mortgage lenders to make VA loans to purchase a primary residence. It is easy to locate lenders that make VA loans. Just remember to indicate whether you are eligible for a VA loan.

Who Is Eligible For A VA Loan?

Veterans, active-duty military personnel, National Guard and Reserve members, and surviving spouses are all eligible for VA loans.

Eligibility Requirements For National Guard And Reserves

If you have served at least six years in the Selected Reserve, National Guard, or any other situation, you may be eligible to apply for a VA loan:

• You were awarded an honorable discharge.

• You were added to the retired list.

• After service that was characterized as honorable, you were transferred to the Standby Reserve and an element of The Ready Reserve other than Selected Reserve.

• You can continue serving in the Selected Reserve.

You might be eligible for benefits if your service-connected disability was discharged after you have served less than six years.

Spouses Must Meet The eligibility Requirements

You may be eligible for a VA loan home loan if your spouse is a veteran:

• An unmarried spouse of a Veteran who has died in service or suffered from a service-connected disability is eligible.

• You are the spouse or parent of a missing soldier or prisoner of war.

• If you are a spouse who has survived, and you remarry after reaching age 57 or on or after December 16, 2003,

• Note: To establish eligibility for a home loan, a spouse who has remarried after December 16, 2003, and before or after reaching age 57 must have applied by December 15, 2004. (

• You are the spouse or surviving spouse of a veteran suffering from a specific total disability, which may not be the cause of death.

Active military and veterans must have served 90 consecutive days during wartime or 180 consecutive days during peacetime. National Guard and Reserves must have six years of service. You may still be eligible if you have less service time due to a service-related disability.

VA Loan Requirements

To use your VA home loan benefits, there are some requirements. First, your primary residence must be the home. Second, you cannot use the home as a second or vacation home. Third, it must be a condo. Check the VA's website for specific condos that are on the approved list.

To verify your eligibility for a VA loan, you will need to submit a Certificate Of Eligibility (COE). Different requirements are required for each COE. A VA lender may also be able to help you get the right COE depending on your situation.

After you have obtained your COE, a VA loan officer will approve you the same as any other borrower. Your income will be used to calculate your monthly housing costs and any other debts (such as student loans, credit cards, or car payments). Most lenders want your monthly housing and non-housing expenses to be less than 43 percent of your income. However, some lenders might be more flexible.

Lenders will also consider your credit score. Lenders will require a different credit score, but generally, you need a score of at least 620 to be eligible for a VA loan.

How A VA Loan Can Finance Your Home

VA loans can finance up to 100% of the home's worth. This means that you can buy a home with no down payment.

Appraisal, credit report, title, appraisal, and recording fees are all eligible closing costs. These are the majority of closing costs for most home purchases.