What Is a VA Loan?

If you are a military member or Veteran considering buying a home in Hawaii, you have probably heard the term VA Loan tossed around by your real estate agent or lender. This mortgage option can help military members, their families, and Veterans purchase a home with a low (or no) down payment.

Who Can Use the VA Loan?

The VA Loan is open to Veterans, active duty military members, National Guard members and Reservists with six or more years of service, and military spouses whose service member spouse died in the line of duty or due to a service-related disability. You can learn more about VA eligibility & requirements here.

There are some service time requirements to be eligible for the VA Loan. During peacetime, service members must serve at least 181 days. During a time of war, service members must serve at least 90 consecutive days to be eligible for the VA Loan.

What Does This Type of Loan Offer?

The VA Loan allows those eligible to purchase a home with no down payment. This is a significant contributor to homeownership for the military community. The home must be their primary residence and still appraise for the value of the loan.

VA Loans are backed by the Department of Veterans Affairs. Buyers still apply for and qualify for a loan through an independent lender, but that lender is able to offer such great terms because they know that the VA will make sure the loan is repaid.

Because the loan terms are so favorable, there are a few extra steps that must be taken during the application process. The main one is the VA appraisal. An independent appraiser must come out to assess the condition and value of the home. As long as it falls within the VA’s requirements and the purchase price of the home, the loan can move forward. If it is lower, the buyer will likely need to come up with some additional money for a down payment but can still use the other favorable terms of the VA Loan.