What kinds of loans are available to veterans?


Quick Answer

Military veterans seeking loan assistance to purchase a home can apply for a government-backed Federal Housing Administration loan or a VA loan backed by the U.S. Department of Veterans Affairs. Vets seeking loan assistance to attend college can apply for a Federal Perkins Loan or a subsidized or unsubsidized Direct Stafford loan.

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What kinds of loans are available to veterans?
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Full Answer

Veterans with low to moderate annual incomes are eligible to apply for an FHA loan designed for families wishing to buy a home. FHA loans have looser restrictions than conventional loans and require a small down payment. Home insurance premiums tend to be lower with FHA loans, and closing costs are much lower. VA loans help veterans purchase first homes, construct homes or make needed improvements to existing homes. Veterans must submit loan applications to a financial lender and wait for approval.

Eligibility requirements for a VA loan are lenient, but lenders expect veterans to show proof of stable income. GI Bill income is not considered stable income because of its temporary nature. Income from a job or self-employment is the best way to establish financial worth. College-bound veterans can apply for the same types of educational loans available to non-military students. Low-interest Federal Perkins Loans are paid directly through the college financial aid office.

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