Being a Veteran I know that buying a home can be a difficult process.  Following the five steps below can ease the procedure.

Five Steps to a VA Loan

Step 1: Obtain a Certificate of Eligibility

Before you can get a VA Guaranteed Loan, you have to establish that you are eligible for the benefit.  You do that by submitting an application (VA Form 26-1880) to the Regional Office, along with proof of your military service.  You can get the application by calling (206) 624-7200 if you are in the Seattle area, or 1-800-827-1000 if you are located elsewhere in the United States.  If you are on active duty, you will need a letter signed by your commanding officer on letterhead stationery, which verifies your service.  If you are not sure, what you will need contact me and I can help you.

Step 2:  Apply for the Loan

The lender will want your Certificate of Eligibility.  The lender will furnish the forms you will need and help you complete them.  The lender will also obtain a credit report, employment and bank verifications, and all other information needed to complete the loan package. 

To obtain a VA guarantee for your loan, you will have to meet minimum credit standards.  The lender will know these standards and, when you apply, they will check to make sure you meet them before the loan will be processed. 

Step 3:  Select your Home

Before you start looking for a house, I suggest that you take the time to read VA Pamphlets 26-4 and 26-6, which contain excellent information about the home buying process.  The pamphlets will be sent to you along with your Certificate of Eligibility.  Once you have found a home that fits your needs, you will need to make an offer.  This offer will be in the form of a purchase and sale agreement or an earnest money agreement.  The offer will be subject to obtaining a VA loan and a structural inspection of the home.

Step 4:  VA Appraisal

Once both the buyer and the seller have accepted an offer, the lender will call the VA and obtain a loan number and an appraiser.  The appraiser will determine the market value of the home and furnish a report to the VA. 

After VA reviews the report, they will issue a Certificate of Reasonable Value.  Both you and your lender will receive a copy.  The CRV establishes the maximum amount of the loan.

The purpose of the appraisal is to determine the value of the home.  It is not an inspection.  If you find something wrong with the home after the sale has closed, the VA will not be able to help you.  That is why it is important to have the home professionally inspected by a certified inspector before the close of escrow.

Step 5:  Closing the Loan

Once VA has issued a Certificate of Reasonable Value, and your lender has the loan ready, the loan is ready to close.  A loan can be closed two ways, depending on the lender.

Due to experience of some lenders in processing VA loan, many lenders are approved to close loans "automatically".  When the lender has completed your loan package, and has received your Certificate of Reasonable Value, they will review the loan package and decide if they can complete the loan.  If everything is all right, then they will go ahead and loan you the money without VA's final approval.

Other lenders must seek VA's approval of the loans they process before they can close.  When the loan package is complete, it needs to be sent to VA for final approval.  When VA has received the package and approve the loan VA will issue to Certificate of Commitment to the lender, and the loan can close. 

Once the loan is completed and has met final approval, you and the seller will meet at escrow to sign the paperwork.   The escrow officer will go over the loan terms and requirements to you.  Once all documents are signed, VA will be notified, and will guarantee the loan.  Your Certificate of Eligibility will be returned to you when VA issues the guarantee.

Important Points to Remember 

1.   The veteran is required by law to occupy the home as his or hers principal place of residence.

2.      You cannot occupy the home before the loan closes.  If the loan should fail to close for any reason, you could experience and inconvenience when you have to vacate the property.