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VA Loan History
The VA Loan
became known in 1944 through the original Servicemen's Readjustment Act
also known as the GI Bill of Rights. The GI Bill was signed into
law by President Franklin D. Roosevelt and provided veterans with a
federally guaranteed home with no down payment. This feature was
designed to provide housing and assistance for veterans and their
families, and the dream of home ownership became a reality for
millions of veterans. The GI Bill contributed more than any other
program in history to the welfare of veterans and their families, and
to the growth of the nation's economy. With more than 29
million veterans and service personnel eligible for VA financing, this
loan is attractive and has many advantages. Eligibility for the
VA loan is defined as Veterans who served on active duty and have a
discharge other than dishonorable after a minimum of 90 days of service
during wartime or a minimum of 181 continuous days during peacetime.
There is a two-year requirement if the veteran enlisted and began
service after September 7th, 1980 or was an officer and began service
after October 16, 1981. There is a six-year requirement for
National Guards and reservists with certain criteria and there are
specific rules concerning the eligibility of surviving spouses.
VA guaranteed loans are made by private lenders, such as banks,
savings & loans, or mortgage companies to eligible veterans for the
purchase of a home, which must be for their own personal occupancy.
The guaranty means the lender is protected against loss if you or a
later owner fails to repay the loan. The guaranty replaces the
protection the lender normally receives by requiring a down payment
allowing you to obtain favorable financing terms. |
