Uses and Use Restrictions

VA may guarantee or insure home loans made to eligible applicants for any of the following purposes: (a) buy or build a home; (b) simultaneously purchase and improve a home; (c) repair, alter or improve a home; (d) improve a home through installation of a solar heating and/or cooling system, or other energy conservation improvements; (e) buy a one-family residential unit in an approved condominium housing project; (f) refinance a mortgage or other lien on a house owned by the applicant; (g) refinance an existing VA loan to reduce the interest rate (h) purchase a manufactured home to be permanently affixed to a lot that is already owned by the applicant; (i) purchase a manufactured home and a lot to which the home will be permanently affixed; (j) refinance at a lower interest rate an existing VA-guaranteed loan which is secured by a manufactured home permanently affixed to a lot owned by the applicant; (k) refinance an existing loan that was made for the purchase of, and that is secured by, a manufactured home that is permanently affixed to a lot and to purchase the lot to which the manufactured home is affixed. Restrictions on guaranteed financing are that: (a) the borrower must own and occupy, as his or her home, the housing unit securing the loan; (b) for refinancing loans to reduce the interest on an existing VA loan previous occupancy is acceptable; (c) the nature and condition of the unit must be suitable for dwelling; (d) maximum loan amount may not exceed the property value established by VA; (e) for cash-out refinancing loans, except for specified situations where the loan limit may preclude lien satisfaction the loan may be no more than 90 percent of the property value as established by VA and the borrower must own and occupy the property; (f) the terms of repayment must bear a proper relationship to the applicant's present and anticipated income and expenses; (g) the applicant must be a satisfactory credit risk; (h) if the loan involves a permanently sited manufactured home, then that home must be classified and taxed as real property.

Eligibility Requirements

Applicants Eligibility

(a) Veterans who served on active duty on or after September 16, 1940, and were discharged or released under conditions other than dishonorable. Veterans who served any time during World War II, the Korean Conflict, the Vietnam-era, or the Persian Gulf War must have served on active duty 90 days or more; veterans with peacetime service only must have served a minimum of 181 days continuous active duty. All veterans separated from enlisted service which began after September 7, 1980, or service as an officer which began after October 16, 1981, must also have served at least 24 months of continuous active duty or the full period for which the person was called or ordered to active duty. Veterans of such recent service may qualify with less service time if they have a compensable service-connected disability or were discharged after at least 181 days (90 days during Persian Gulf War), under the authority of 10 U.S.C. 1171 or 1173; or (b) any veteran in the above classes with less service but discharged with a service-connected disability; (c) 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; (d) unmarried surviving spouses of otherwise eligible veterans who died in service or whose deaths were attributable to service-connected disabilities; (e) service personnel who have served at least 181 days on continuous active duty status (90 days until the ending date for the Persian Gulf War has been set); (f) spouses of members of the Armed Forces serving on active duty, who are listed as missing in action, or as prisoners of war and who have been so listed 90 days or more; (g) members of the Selected Reserve who are not otherwise eligible for home loan benefits and who have completed a total of six (6) years in the Selected Reserves, followed by an honorable discharge, placement on the retired list, or continued service. Individuals who completed less than 6 years may be eligible if discharged for a service connected disability. Eligibility for Selected Reservists expires September 30, 2009. Applicants must have sufficient present and prospective income to meet loan repayment terms and have a satisfactory credit record.

Beneficiary Eligibility

Veterans, service personnel, unmarried surviving spouses of veterans.

Credentials/Documentation

Evidence of the veteran's entitlement for loan benefits and qualification for the loan purpose, documentation on the loan transaction and characteristics of the property proposed to secure the loan.

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