CharterWest’s mortgage staff can help you with your VA home loan needs. Read on to find out more about VA loans, eligibility requirements, and VA loan uses.

The main purpose of the VA loan program is to help veterans finance the purchase of homes with favorable loan terms. The rates of interest for a VA loan are competitive with rates charged on other types of mortgage loans.

The veteran will be able to obtain 100 percent financing in most cases at a very favorable fixed rate and terms. For VA housing loan purposes, the term “veteran” includes certain members of the Selected Reserve, active duty service personnel, and certain categories of spouses. We have listed the active duty service dates below for your reference. We have also listed most of the VA loan uses and included information on the streamline refinance program for existing VA homeowners. For more information on the VA program, please visit with one of our mortgage specialists.

Acceptable Uses for VA Loans

To buy a home, including a townhouse or condominium unit in a VA-approved project.
To build a home.
To simultaneously purchase and improve a home.
To improve a home by installing energy-related features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/caulking, storm windows/doors, or other energy efficient improvements approved by the lender and the VA. These features may be added with the purchase of an existing dwelling or by refinancing a home owned and occupied by the veteran. A loan can be increased up to $3,000 based on documented costs or up to $6,000 if the increase in the mortgage payment is offset by the expected reduction in utility costs. A refinancing loan may not exceed 90 percent of the appraised value plus the costs of the improvements. Check with us for details.
To refinance an existing home loan up to 90 percent of the VA-established reasonable value or to refinance an existing VA loan to reduce the interest rate.

VA Loan Eligibility Requirements

Wartime Service

During the following periods:

WWII – 09/16/40 to 07/25/47

Korean – 06/27/50 to 01/31/55

Vietnam – 08/05/64 to 05/07/75

You must have served at least 90 days on active duty and been discharged under other than dishonorable conditions. If you served less than 90 days, you may be eligible if you were discharged for a service-connected disability.

NOTE: Applications involving other than honorable discharges will usually require further development by the VA. This is necessary to determine if the service was under other than dishonorable conditions.

Peacetime Service

During the following periods:

07/26/47 to 06/26/50

02/01/55 to 08/04/64

05/08/75 to 09/07/80 (enlisted) or 10/16/81 (officer)

You must have served at least 181 days of continuous active duty and been discharged under other than dishonorable conditions. If you served less than 181 days, you may be eligible if you were discharged for a service-connected disability.

Service after 09/07/80 (enlisted) or 10/16/81 (officer)

If you were separated from service which began after these dates, you must have:

(a) Completed 24 months of continuous active duty or the full period (at least 181 days) for which you were ordered or called to active duty and been discharged under conditions other than dishonorable; or

(b) Completed at least 181 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1171 (Early out), or have been determined to have a compensable service-connected disability; or

(c) Been discharged with less than 181 days of service for a service-connected disability. Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions or, in some instances, for the convenience of the Government.

Gulf War – Service during period 08/02/90 to date yet to be determined

If you served on active duty during the Gulf War, you must have:

(a) Completed 24 months of continuous active duty or the full period (at least 90 days) for which you were called or ordered to active duty and been discharged under conditions other than dishonorable; or

(b) Completed at least 90 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1173 (Early out), or have been determined to have a compensable service-connected disability; or

(c) Been discharged with less than 90 days of service for a service-connected disability. Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions or, in some instances, for the convenience of the Government.

Active Duty Service Personnel

If you are now on regular active duty (not active duty for training), you are eligible after having served 181 days (90 days during the Gulf War) unless discharged or separated from a previous qualifying period of active duty service.

Selected Reserves or National Guard

If you are not otherwise eligible and you have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and

(a) Were discharged with an honorable discharge; or

(b) Were placed on the retired list; or

(c) Were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service; or

(d) Continue to serve in the Selected Reserves.

Individuals who completed less than 6 years may be eligible if discharged for a service- connected disability. Eligibility for Selected Reservists expires 09/30/2009 .

Spouses

You may also be determined eligible if you:

(a) Are an unremarried spouse of a veteran who died while in service or from a service connected disability; or

(b) Are a spouse of a serviceperson missing in action or a prisoner of war.

Other Individuals

Eligibility may also be established for:

(a) Certain United States citizens who served in the armed forces of a government allied with the United States in WWII; or

(b) Individuals with service as members in certain organizations, such as Public Health Service officers; cadets at the United States Military, Air Force, or Coast Guard Academy; midshipmen at the United States Naval Academy; officers of National Oceanic & Atmospheric Administration; merchant seaman with WW II service; and others.

VA Streamline Refinances

VA has permitted streamline refinances on insured mortgages since the early 1980s. The streamline refers to the amount of documentation and underwriting that needs to be performed by the mortgage company and does not mean that there are no costs involved in the transaction.

The basic requirements of a streamline refinance are:

The mortgage to be refinanced must already be VA-insured.
The mortgage to be refinanced should be current (not delinquent).
The refinance is to result in a lowering of the borrower’s monthly principal and interest payments.
No cash may be taken out on mortgages refinanced using the streamline refinance process.

Companies may offer streamline refinances in several ways. Some companies offer “no cost” refinances (no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the company pays any closing costs that are incurred on the transaction.

Companies may offer streamline refinances and include the closing costs into the new mortgage amount. This can be done only if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed what is currently owed, i.e., closing costs may not be added to the new mortgage with those costs paid either in cash or through the premium rate as described above. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal and, thus, closing costs may not be included in the new mortgage amount.

Generally, it is best to go with the option that offers the lowest cost rather than the lowest rate.Call us for more detailsat 888-273-9500. (link to branch info)