Many government departments and agencies provide a variety of programs designed to help people qualify for home loans. Some are aimed at families with very low or low income levels, like those provided by the Federal Housing Authority (FHA), or the United States Department of Agriculture (USDA). Others are geared to first time home buyers, and some are provided to active duty service personnel and Veterans. Eligibility requirements are different for each program and each agency. Private lenders who participate in government programs can help people determine if they qualify for programs.
The Veteran’s Administration (VA), for example do not offer direct loans or grants, but assist people through guaranteed loans. If a loan is guaranteed through the VA, lenders do not have to assume all the risk associated with approving a home loan. There are other advantages to the guaranteed loan benefit. Mortgage insurance is not required, the interest rate and closing costs are lower than a regular home loan, and there is usually no down payment required. That makes it easier for Veterans and active duty service people to get loans approved. People still have to have a decent credit history, and make enough income to make payments, but there is a more flexibility when it comes to granting a home loan.
VA loan eligibility is dependent on a Certificate of Eligibility (COE) that must be obtained before any loan will be guaranteed. The COE proves that people qualify by verifying service time and conditions of discharge. Active duty has to be for at least ninety days before a COE is provided. For Veterans, service time during war time is ninety consecutive days, and one-hundred and eighty-one days during times of peace. Reservists or those who served in the National Guard, have to have served for a period of six years. There are some circumstances that qualify people, who do not meet time served eligibility, for a COE. Those include discharge due to hardship, a service-related disability, and certain medical conditions, among others. A dishonorable discharge prohibits a Veteran from being eligible for a Certificate. Those who are interested in VA guaranteed loans can go to texasvaloancenter.org for detailed information regarding eligibility and getting the process started.