5 Myths About VA Loans

Busting the Top 5 VA Loan Myths

For veterans of the United States military, VA loans are a practical, affordable solution to the challenges of home ownership. Established in 1944 by President Franklin D. Roosevelt as a part of the GI Bill of Rights, the VA loan program was designed to reward military families for their service with federally guaranteed housing via loans backed by the VA.

Unlike traditional loans, VA loans require no down-payment and no monthly mortgage premium insurance (PMI)—two of the more well-known benefits that make these loans attractive to veterans. VA loans also offer multiple refinance options, foreclosure avoidance advocacy and lower average interest rates, in addition to an array of other advantages.

Unfortunately, common myths and misconceptions regarding VA loans prevent veterans and military personnel every year from capitalizing on these benefits and buying a home.

By analyzing these myths and taking the time to learn about the VA loan process, you can determine if a VA loan is the right fit.

Myth #1: Most veterans don’t qualify for VA loans

One of the most pervasive myths about VA loans is that the criteria for qualification are highly-exclusive—more specifically that only combat veterans qualify. But the truth is far simpler: veterans, active service members, reservists, National Guard members, Public Health Service officers and surviving spouses may be eligible for home loan benefits. Eligibility for veterans who served during wartime and veterans who served during peacetime depends on several conditions, which you can learn more about here.

Active service members can establish eligibility after 90 continuous days of active-duty. Eligibility must be reestablished after discharge or release from active duty.

Myth #2: VA loans require a perfect FICO score

Another common myth about VA loans is that they require perfect FICO scores, which would make accessing a VA loan extremely difficult. But this isn’t true—the VA does not have a minimum credit score required for loan approval.

Instead, the VA encourages approved lenders to provide loans to all qualified applicants. But approved lenders do set their own guidelines on credit scores. Many lenders typically require a minimum credit score of 620, though there are plenty of lenders that allow for lower credit scores in certain cases.

What’s important is that military members interested in leveraging a VA loan perform the necessary research and find a lender whose credit score criteria they meet – and where possible – one who specializes in VA loans.

Myth #3: Service members serving overseas cannot get approved for a VA loan until they return home to occupy the residence

One of the more persistent myths about VA loan eligibility and qualification is that active service members serving overseas cannot establish eligibility until they return home to occupy the residence. But the truth is that veterans serving overseas are still eligible for a VA loan. All they need to do is sign a power of attorney (POA) allowing a spouse or other individual to act on their behalf during the loan process.

Spouses can satisfy the occupancy rule, as long as they move into the home within 60 days after closing. If the borrower is not married, they can apply for an extension of up to 12 months to occupy the home. (https://nlcloans.com/trd_post/5-facts-about-va-loans-you-probably-didnt-know/)

Myth #4: VA loans take too long to close

A common critique of VA loans is that the appraisal process is longer than that of a conventional loan. But research suggests otherwise. VA loans do include a unique appraisal process, which is designed to ensure that the home is structurally sound but does not act as a substitute for a home inspection. But stories about VA appraisal timelines are often exaggerated. You can determine the average number of business days the appraisal process will take in your state here. While VA loan appraisers do have higher standards for what conditions in a home are acceptable, this is for the benefit of the buyer. And a lender who specializes in VA loans can simplify this process.

While it is true that the VA loan process can take longer than conventional loans, the difference in average closing timelines is negligible, and some VA loans are closed in as little as little as 30 days — well within average range of 40 to 50 days.

Myth #5: VA loans can only be used one time

One of the lesser known facts about VA loans is that they are a life-long benefit for those who have served their country — there is no limit to the number of times a veteran or service member can use the loan program, as long as they remain eligible and meet the qualification for reuse. There are three scenarios in which a family might qualify for a new VA loan (https://www.military.com/money/va-loans/are-you-entitled-to-another-va-loan.html):

  • If they have already sold their house financed with a VA loan and have paid off the mortgage
  • If they have sold their home before paying off the loan and the buyer has used their entitlement to assume the mortgage
  • If they have entitlement remaining after a VA loan and need to secure another loan to buy a new home after military reassignment 


The information contained herein (including but not limited to any description of TowneBank Mortgage, its affiliates and its lending programs and products, eligibility criteria, interest rates, fees and all other loan terms) is subject to change without notice. This is not a commitment to lend. NMLS #512138

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