VA Loans Process

1. Prequalification

• Step 1: The process typically starts with prequalification. This involves speaking with a VA-approved lender to determine how much you may be able to borrow based on your income, credit, and financial situation.
• Documents needed: At this stage, you’ll provide basic financial information, including income and employment details.
• Outcome: Prequalification gives you an estimate of your purchasing power but is not a guarantee of loan approval.

2. Get Your Certificate of Eligibility (COE)

• Step 2: To apply for a VA loan, you’ll need a Certificate of Eligibility (COE). This document proves to lenders that you meet the military service requirements to qualify for a VA loan.
• How to get it: You can obtain the COE through the VA’s eBenefits portal, by working with a VA lender who can obtain it for you, or by mailing in a request.

3. Loan Pre-Approval

• Step 3: After receiving your COE, you’ll need to complete a loan application with your lender and get pre-approved.
• Documents needed: You will need to submit more detailed information, including income documentation (pay stubs, tax returns, W-2s), and give the lender permission to pull your credit report.
• Outcome: Pre-approval will give you a specific loan amount and interest rate, and make you a more competitive buyer when making offers.

4. House Hunting and Purchase Agreement

• Step 4: Once pre-approved, you can start house hunting with a realtor who is experienced with VA loans. After you find a home, you’ll submit an offer and sign a purchase agreement with the seller.
• Important: Make sure your offer includes a VA Option Clause or contingency, which allows you to walk away from the deal if the home’s VA appraisal doesn’t meet the purchase price.

5. VA Appraisal

• Step 5: After the purchase agreement is signed, your lender will order a VA appraisal. The VA appraisal determines the home’s market value and ensures it meets the VA’s minimum property requirements (MPRs) for safety and habitability.
• Outcome: If the appraisal comes in lower than the purchase price, you may need to renegotiate with the seller or pay the difference. If the property doesn’t meet the MPRs, the seller may need to make repairs.

6. Underwriting

• Step 6: During underwriting, the lender verifies all the information you’ve provided and ensures the property meets the VA’s guidelines. The lender will review your income, assets, credit history, and the VA appraisal.
• Outcome: The underwriter may issue an approval, deny the loan, or request additional information (known as “conditions”) before approval.

7. Closing

• Step 7: Once the underwriter issues a final approval, you’ll move to closing, where you sign the final loan documents and pay any closing costs. At closing, ownership of the home is transferred to you.
• Closing Costs: While VA loans don’t require a down payment, there are still closing costs involved, such as the VA funding fee (unless exempt) and other standard fees like appraisal and title costs.
• Outcome: After closing, the home is officially yours!