The VA Home Loan Program includes a variety of services available to help service members, veterans and the spouses or dependents of eligible military personnel to become homeowners. VA home loans come in two primary types: VA Direct Home Loans and VA-Backed Home Loans.
A direct VA home loan is pretty self explanatory. It is a loan given to you directly by the Department of Veteran Affairs to help you and your family pay for a new home. A VA-backed home loan is when the VA helps you receive a loan from another lender by signing on as a guarantor for your loan.
These are both considered purchase loans because they help service members and veterans purchase a home.
VA purchase loans like these help military personnel receive loans at better rates and under better terms than if they were to pursue a traditional loan with a private lender. To receive either of these loan options, you will need to apply for a certificate of eligibility (COE) with the VA and meet the service requirements.
Additional VA loan options include, Interest Rate Reduction Refinance Loan (IRRRL) and VA-Backed cash out loans.
IRRRL loans help reduce the interest rate of your existing VA-backed home loan if you are struggling financially to keep up with your monthly loan payments, while VA-backed cash out loans allow veterans and active duty military members to take out cash from the equity they have built up in their home to pay other expenses.
There is also the Native American Direct Loan Program (NADL), which offers fair and affordable home loans to eligible Native Americans who have served or are currently serving in the military.
The loan amount you qualify for will depend on the loan you are applying for and how much the home you are purchasing costs. Research each type of loan thoroughly before deciding which one is best for you.