A VA loan is the more common term used to define mortgage loans issued to veterans of the US Armed Forces by private lenders. These loans are backed by the US Department of Veterans Affairs and they are eligible to not only veterans themselves, but also to active duty military members and widowed military spouses. These loans provide the funding necessary to buy homes, and as of 2019, roughly 8% of all homes are purchased with VA loans.
With a conventional mortgage, lenders agree to provide funding to borrowers based on their credit history, income, collateral, and more. A VA loan is an example of an unconventional mortgage because it is backed by the federal government. If you default on a VA loan, the government will repay all or some of it on your behalf. As a result of this, VA loans are generally easier to obtain than conventional mortgages since the lenders incur much less risk.
In order to qualify for a VA home loan, you must be able to meet certain requirements.
Before applying for a VA mortgage, you will need to obtain a Certificate of Eligibility through the VA. You can get this certificate online, via postal mail, and in many cases, even from your lender.
VA loans can be beneficial in many ways.