Catalog of Federal Domestic Assistance

Program Descriptions


64.114:  Veterans Housing: Guaranteed and Insured Loans

Popular Name:  VA Home Loans

Objectives:  To assist veterans, certain service personnel, and certain unremarried surviving spouses of veterans, in obtaining credit for the purchase, construction or improvement of homes on more liberal terms than are generally available to non-veterans.



Applicant 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, 2003. 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.


Preapplication Coordination:  None. This program is excluded from coverage under E.O. 12372.

Application Procedure:  Eligible veterans should obtain a Certificate of Eligibility from the appropriate VA office, and present it with the housing proposal to a private lender willing to make the loan. Application for guaranty or insurance is made by the lender to the VA regional office or center having jurisdiction over the locality in which the home is located.

Award Procedure:  The VA regional office or center will issue the lender evidence of guaranty or insurance after requirements are met and loan proceeds are disbursed.

Deadlines:  None.

Range of Approval/Disapproval Time:  From 5 to 20 days after receipt of a loan application in VA.

Appeals:  Denial of eligibility is appealable through Board of Veterans' Appeals. In the event of a denial, claimants are advised of appeal rights and procedures at the time of notification.

Renewals:  None.

Criteria for Selecting Proposals:  Not applicable.

Examples of Funded Projects:  Not applicable.

Range and Average of Financial Assistance:  The guaranty is 50 percent for loans of $45,000 or less; and for loans greater than $45,000 and not more than $56,250, $22,500 is guaranteed. For loans of more than $56,250 up to $144,000, the guaranty is $36,000 or 40 percent, whichever is less. For loans greater than $144,000 for the purchase or construction of a home or a condominium unit, the guaranty is $50,750 or 25 percent is guaranteed. To refinance the outstanding balance of an existing VA guaranteed home loan to a lower interest rate, the minimum guaranty is 25 percent.


  • 15.124 Indian Loans: Economic Development;
  • 64.102 Compensation for Service-Connected Deaths for Veterans' Dependents;
  • 64.106 Specially Adapted Housing for Disabled Veterans;
  • 64.118 Veterans Housing: Direct Loans for Certain Disabled Veterans;
  • 64.119 Veterans Housing: Manufactured Home Loans.


In fiscal year 1999, VA guaranteed $43.1 billion in loans to finance purchase of 396,399 conventionally constructed homes and condominium units. In fiscal year 2000, it is estimated that 280,000 loans totaling $32.2 billion will be guaranteed or insured. In fiscal year 2001, 250,000 loans totaling $29.5 billion are forecasted to be guaranteed.



Type of Assistance:  Guaranteed/Insured Loans.

Obligations:  (Closed Loans Guaranteed) FY 99 $43,090,985,000; FY 00 est $32,115,917,000; and FY 01 est $29,535,181,000.

Budget Account Number:  36-4129-0-3-704.

Authorization:  38 U.S.C. 3710.

Regulations, Guidelines, and Literature:  38 CFR 36.4300-4375 and 36.4390-36.4393; "Federal Benefits for Veterans and Dependents," VA Pamphlet 80-99-1, $5.00, available from Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. The stock number is: 051-000-0217-2. "VA-Guaranteed Home Loans For Veterans," VA Pamphlet 26-4; "Pointers For the Veteran Homeowner," VA Pamphlet 26-5; "To the Homebuying Veteran," VA Pamphlet 26-6; "Lenders Handbook, Guaranteed and Insured Loans," VA Pamphlet 26-7 (available to lenders only).


Regional or Local Office:  Loan applications are processed completely by the Veterans Benefits Administration Regional Loan Centers for their respective geographic area jurisdictions. Initial contact should be made with the appropriate office listed in Appendix IV of the Catalog under Veterans Benefits Administration.

Headquarters Office:  Department of Veterans Affairs, Washington, DC 20420. Phone: (202) 273-7390.

(See Appendix IV for more contact info.)


Formula and Matching Requirements:  The lender is guaranteed against loss at a rate of up to 50 percent for loans of $45,000 or less; for loans of more than $45,000 and not more than $56,250, $22,500 is guaranteed; for loans of more than $56,250 and not more than $144,000, the guaranty is the lesser of $36,000 or 40 percent of the loan; for loans of more than $144,000 made for the purchase or construction of a home, the lesser of $50,750 or 25 percent is guaranteed. To refinance the outstanding balance of an existing VA guaranteed home loan to a lower interest rate, the minimum guaranty is 25 percent.

Length and Time Phasing of Assistance:  Not applicable.

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.


Reports:  As a condition of continued guaranty or insurance coverage, the holder of the loan must notify the guaranteeing or insuring VA office of the borrower's default on installment payments or other contract terms, and of any substantive change in the terms of the contract or the security. Reporting time limitations are specified in VA regulations.

Audits:  VA has the right to audit loan accounting records until expiration of the guaranty or insurance.

Records:  Until VA ceases to be liable as the guarantor or insurer of a loan, the lender or loan holder must maintain adequate records on the amount and dates of payments received and disbursements made on guaranteed or insured loans.

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Last Updated, November, 2000             Comments or Questions?           ©Grant 2000, All Rights Reserved