VA Loans Explained: Benefits, Eligibility, and Building Equity
What is a VA Loan Guaranty?
A VA Loan Guaranty is a benefit from the U.S. Department of Veterans Affairs that helps eligible veterans, active-duty service members, and certain military spouses buy, build, or refinance a home. It’s designed to make homeownership more accessible and affordable for those who’ve served.
The VA doesn’t provide the loan directly. Instead, it guarantees a portion of the loan through a private lender. This guarantee reduces the lender’s risk, which allows borrowers to enjoy advantages like low or no down payment, competitive interest rates, and no private mortgage insurance.
VA loans can be used to:
- Purchase a primary residence
- Build a new home
- Refinance an existing VA loan or non-VA loan
- Make energy-efficient upgrades
The VA typically guarantees up to 25% of the loan amount, depending on your entitlement. This guarantee can help you qualify for a larger loan or better terms, making homeownership easier to achieve.
With a VA-guaranteed loan, eligible service members and veterans can access a valuable benefit that supports their financial goals and homeownership dreams.
Ready to learn more? Contact Horizon to see how a VA loan can help you achieve your homeownership goals.
VA Certificate of Eligibility (COE) and How to Get One
Before applying for a VA loan, one of the first steps is obtaining your VA Certificate of Eligibility (COE). This document confirms to your lender that you meet the service requirements set by the U.S. Department of Veterans Affairs for a VA-guaranteed loan.
What Is a COE?
A Certificate of Eligibility is proof that you qualify for a VA home loan benefit. It shows the lender that the VA will guarantee a portion of your loan; helping you access benefits like no down payment, competitive rates, and no private mortgage insurance.
Who Needs a COE?
You’ll need a COE if you’re applying for a VA-backed loan as a:
- An active-duty service member
- A veteran
- A National Guard or Reserve member
- A surviving spouse of a qualifying service member
How to Get a COE
You can obtain your COE in one of three ways:
- Online: Request a COE online.
- Through your lender: Most VA-approved lenders, including Horizon, can request it for you.
- By mail: Complete VA Form 26-1880 and send it to the VA Loan Eligibility Center.
To apply, you’ll need documentation such as your DD Form 214 (for veterans) or a Statement of Service (for active-duty members).
Need help getting your COE? Contact Horizon, and our Advisors will guide you through each step of your VA loan journey.Learn more Find a mortgage advisor
What are the Requirements to Get a VA Loan?
A VA loan is a valuable benefit for eligible veterans, active-duty service members, and certain military spouses. To take advantage of this benefit, there are a few key requirements you need to meet.
1. Military Service Eligibility
You must meet the VA’s service requirements, which generally include:
- Active-duty service: Typically, at least 90 consecutive days during wartime or 181 days during peacetime
- Veterans: Minimum of 90 days of active service
- National Guard or Reserves: Typically, 6 years of service (or 90 days of active duty during wartime)
- Spouses: Certain spouses of service members who died in the line of duty or because of service-connected disabilities may also qualify
2. A Certificate of Eligibility (COE)
You must be entitled to and obtain a Certificate of Eligibility.
3. Credit and Income
You must meet lenders credit and income requirements.
4. Primary Residence Requirement
VA loans must be used to purchase or refinance a primary residence, not an investment or vacation property.
5. VA Loan Entitlement
Your VA loan entitlement determines the maximum amount the VA will guarantee, which can affect your down payment requirements and loan limits.
Meeting these requirements allows you to access benefits like low or no down payment, competitive interest rates, and no private mortgage insurance, making homeownership more attainable.
Contact a Horizon Mortgage Advisor to get started today!
The Top Five Benefits of Using a VA Loan
Renovating your home on your own requires time, money, and sweat. Sweat equity rewards that hard work! Sweat equity differs from home equity but provides similar benefits, including the ability to refinance your mortgage payments and pay college tuition. So how does it work?
How Does Sweat Equity Work?
Equity is the value of your home or property minus what you owe on the current mortgage. With sweat equity, you can subtract the estimated cost of renovations – including time, work, and supplies – from the mortgage, increasing your equity. Once you’ve increased your home equity, you can apply for a home equity loan or line of credit to complete more significant projects, pay other loans, or even fund college tuition.
What Counts as Sweat Equity?
Remodeling
When the kids move out, rooms open up. Remodeling a spare bedroom into a walk-in closet and attaching a bathroom to a new master bedroom are incredibly valuable home remodels. Other remodeling projects include finishing the basement, converting a closet to a home office, or installing new floors. These major remodels all increase your home’s equity.
Renovating
Renovating includes staining hardwood floors, updating doors, and installing crown molding. It can also include getting new appliances, installing new cabinetry, etc. These are the DIY projects that many new homeowners love! And they increase your home’s value – and its equity, too.
If you’ve gained a lot of sweat equity with your renovations and remodels, apply for a home equity loan today or talk to a Horizon Bank advisor to learn more.
A VA loan guaranty is a powerful benefit that helps eligible veterans, active-duty service members, and certain military spouses achieve homeownership with fewer financial barriers. Backed by the U.S. Department of Veterans Affairs, a VA loan allows qualified borrowers to buy, build, or refinance a primary residence through a private lender, often with little or no down payment, competitive interest rates, and no private mortgage insurance (PMI).
To qualify, borrowers must meet military service requirements and obtain a Certificate of Eligibility (COE), which confirms eligibility for the program. VA loans are available to veterans, active-duty members, National Guard and Reserve members, and some surviving spouses. Lenders also review credit, income, and occupancy requirements to ensure borrowers can manage the loan responsibly.
One of the biggest advantages of a VA loan is the financial flexibility it provides. Because the VA guarantees a portion of the loan, lenders can offer more favorable terms and reduced upfront costs. This benefit makes homeownership more accessible and affordable for those who have served our country.
If you’re ready to explore your VA loan options, Horizon Mortgage Advisors can help guide you through every step of the process—from obtaining your COE to finding the right loan for your homeownership goals.