VA Loan Eligibility Requirements: What California Veterans Need to Know

Buying a home can be a challenge, especially in high-cost states like California. But for veterans, active-duty service members, and certain military spouses, VA loans offer a powerful path to affordable homeownership. Backed by the U.S. Department of Veterans Affairs, VA loans provide benefits like no down payment, lower interest rates, and no private mortgage insurance (PMI).

Before applying, it’s important to understand the VA mortgage loan eligibility requirements—including service qualifications, credit expectations, and property guidelines. This guide will walk you through what you need to know to get started.

What Is a VA Mortgage Loan?

A VA mortgage loan is a home loan guaranteed by the Department of Veterans Affairs, designed to help eligible service members, veterans, and surviving spouses buy, build, or refinance a home. Because of the VA’s guarantee, private lenders can offer more favorable terms, even to borrowers with lower credit or limited savings.

Who Is Eligible for a VA Loan?

Eligibility for a VA mortgage loan depends primarily on military service history, but other criteria also apply.

Service Requirements

You may be eligible if you meet one of the following conditions:

• Served 90 consecutive days of active duty during wartime
  
  
• Served 181 days of active service during peacetime
  
  
• Have 6 years of service in the National Guard or Reserves
  
  
• Served 90 days under Title 32, with at least 30 consecutive days
  
  

Surviving Spouses

Unremarried spouses of veterans who died in service or from a service-connected disability may also qualify. Certain remarried spouses can be eligible if they remarried after age 57 or after December 16, 2003.

Discharge Status

You must have received an honorable discharge to qualify. Veterans with a general or other-than-honorable discharge may be eligible upon receiving a discharge upgrade.

How to Apply for a VA Loan Certificate of Eligibility (COE)

Before lenders can approve a VA mortgage, you’ll need to provide a Certificate of Eligibility (COE). This document verifies your eligibility status based on your military service.

You can obtain a COE in three ways:

1. Through a VA-approved lender like Merchant’s Home Lending
   
   
2. Online via the VA eBenefits portal
   
   
3. By mail using VA Form 26-1880

Required Documents:

• Veterans: DD-214 form
  
  
• Active duty: Statement of service from your commanding officer
  
  
• Guard/Reserves: NGB Form 22 or NGB Form 23
  
  
• Surviving spouses: VA Form 26-1817 and veteran’s discharge paperwork
  
  

Your lender can often retrieve this for you within minutes.

VA Loan Entitlement & Loan Limits

VA entitlement refers to the amount the VA guarantees on your loan. First-time VA buyers typically have full entitlement, meaning there's no VA loan limit. However, if you have another active VA loan or defaulted on one, loan limits may apply.

In California:

Loan limits can be higher in counties like Los Angeles, Orange, and San Francisco, where the cost of living is above the national average. Borrowers in high-cost areas may still qualify without a down payment depending on entitlement status.

Credit, Income, and Financial Guidelines

Although the VA doesn’t set a minimum credit score, most lenders require:

• Credit score of 620 or higher
  
  
• Stable income and employment history
  
  
• Debt-to-income (DTI) ratio below 41%, though higher may be accepted with compensating factors
  
  

At Merchant’s Home Lending, we evaluate your entire financial picture and work with you to make sure you're positioned for success—even if your credit isn't perfect.

VA Loan Fees and Costs

One of the main advantages of a VA mortgage loan is that there’s no monthly PMI and no down payment is required for most borrowers. However, there is a one-time VA funding fee unless you're exempt.

VA Funding Fee Structure:

• First-time use, no down payment: 2.15%
  
  
• Subsequent use, no down payment: 3.3%
  
  
• With down payment (≥5%): Reduced fees
  
  
• Refinance IRRRL: 0.5%
  

Exemptions:

You may be exempt if you:

• Receive VA disability compensation
  
  
• Are a Purple Heart recipient
  
  
• Are a surviving spouse eligible for VA benefits
  
  

This fee helps fund the program and keeps VA loans available to future generations of veterans.

Property and Occupancy Requirements

To qualify for a VA mortgage loan, the home must meet specific criteria:

• Primary residence only (no investment properties or vacation homes)
  
  
• Must pass a VA appraisal to ensure it meets safety and livability standards
  
  
• You must plan to occupy the property within 60 days of closing
  
  

Some flexibility exists for deployed service members or unique situations. Ask your lender if your circumstances qualify for an extension.

VA Loan Refinancing Options

VA loans offer flexible refinancing options for existing VA borrowers:

1. VA IRRRL (Interest Rate Reduction Refinance Loan)

Also known as the streamline refinance, this option allows you to refinance your current VA loan to a lower interest rate with minimal paperwork, no appraisal, and reduced closing costs.

2. VA Cash-Out Refinance

This option lets you refinance a non-VA loan or take equity out of your home. A full appraisal and credit check are required.

Common Myths About VA Mortgage Loans

Let’s clear up a few misconceptions:

• Myth: VA loans are only for first-time buyers
  Truth: You can use your VA benefits multiple times.
  
  
• Myth: You can’t get a VA loan with bad credit
  Truth: Lenders often work with lower credit scores, especially with strong income or low DTI.
  
  
• Myth: It’s harder to close on a VA loan
  Truth: VA loans typically close within the same timeframes as conventional mortgages, especially with experienced lenders.
  
  

Final Thoughts: Is a VA Mortgage Loan Right for You?

If you’re a veteran, active-duty service member, or surviving spouse in California, a VA mortgage loan could be your smartest path to homeownership. With no down payment, competitive rates, and flexible eligibility, it offers advantages you won’t find with conventional loans.

At Merchant’s Home Lending, we specialize in helping veterans navigate the VA loan process. We’ll guide you every step of the way—from confirming your eligibility to closing on your dream home.

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