What are Veteran Loans?

Veteran loans, in general, are loans made available to active members of the armed forces or those who have retired from the military. In some cases, the spouses of deceased military members are eligible for some loan programs. These loan programs are not direct loans from the government to the individual. They are really a loan guarantee program. It means the Department of Veterans Affairs is assuring the lender that if the veteran defaults on the mortgage, for example, the VA will cover the costs of the loan. This assurance provides the lender with incentive to lend the money at much lower rates than they offer non-military homebuyers.

Recent published funding opportunities: (Last updated: 2024-02-22)

Funding Opportunity
Veterans Treatment Court Enhancement Initiative - Phase II Apply for 18CS03

Funding Number: 18CS03
Agency: Department of Justice, National Institute of Corrections
Category: Other (see text field entitled Explanation of Other Category of Funding Activity for clarification)
Funding Amount: $150,000
Veterans Employment Pay for Success Grant Program Apply for VA VACI 2016 01

Funding Number: VA VACI 2016 01
Agency: Department of Veterans Affairs, Veterans Employment Pay for Success
Category: Employment, Labor and Training
Funding Amount: $3,000,000
Grants for Transportation of Veterans in Highly Rural Areas Apply for VA HRTG 2016

Funding Number: VA HRTG 2016
Agency: Department of Veterans Affairs, Chief Business Office
Category: Other (see text field entitled Explanation of Other Category of Funding Activity for clarification)
Funding Amount: $50,000
Veterans Cemetery Grants Apply for VA GRANTS NCA FY2017

Funding Number: VA GRANTS NCA FY2017
Agency: Department of Veterans Affairs, VA National Cemetery Administration
Category: Community Development
Funding Amount: $45,000,000
BLM-CO Veterans Conservation Initiative Apply for L16AS00232

Funding Number: L16AS00232
Agency: Department of the Interior, Bureau of Land Management
Category: Natural Resources
Funding Amount: $245,000
Outreach and Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers Grant Program Apply for OAO 0010

Funding Number: OAO 0010
Agency: Department of Agriculture, DM-Office of Advocacy and Outreach
Category: Agriculture
Funding Amount: $200,000
Veteran and Youth crew Pinyon-Juniper thinning and Hazard Tree Removal Project. Apply for L16AS00181

Funding Number: L16AS00181
Agency: DOI-BLM
Category: Natural Resources
Funding Amount: $750,000
BLM-ES, Jupiter Inlet Lighthouse ONA Veterans Engagement Program Support Apply for L16AS00134

Funding Number: L16AS00134
Agency: DOI-BLM
Category: Natural Resources
Funding Amount: $10,000
Service-Disabled Veteran Entrepreneurship Training Program Apply for SDVETP 2016 01

Funding Number: SDVETP 2016 01
Agency: SBA
Category: Business and Commerce
Funding Amount: $150,000
Veterans Trauma Informed Training Apply for 16CS09

Funding Number: 16CS09
Category: Other (see text field entitled Explanation of Other Category of Funding Activity for clarification)
Funding Amount: $70,000


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Types of Veteran Loans

There are four types of veteran loans available. The VA Home Loan program is one that gets much of the attention. This program offers veterans and active duty military to purchase a home without meeting the common barriers non-military consumers often have to overcome. Veterans can receive a loan guarantee on a mortgage without providing a down payment, no mortgage insurance required, and lower closing costs among many other benefits. This loan guarantee provides the lender with assurance that the VA will cover the mortgage in case the veteran cannot meet the mortgage payments. The VA does require lenders to use basic guidelines when it comes to income and credit ratings however.

The next type of veteran loans available is business loans. The Small Business Administration accepts loan applications from veterans all the time. Veterans can apply to a special category of SBA loans in the Express and Pilot section. These are specifically for members of the military. The Patriot Express program is one of those. This program offers loan assurance as well as small business counseling for active duty military, veterans, or their spouses. The focus is to start up or expand a small business owned by one of these citizens. They often come with the lowest interest rates available from the SBA.

Another type of loan available to veterans is educational. Active military and veterans can qualify for a number of education grants not open to non-military. However, if education costs are higher than the grants cover, they can qualify for loans. These loans cover all educational expense categories including tuition, fees, housing, and books. All of these veteran loans require proving military service, either through the military branches or through the reserve services. Some programs are open only to those that served a certain number of years in active duty, while others are more flexible. It is important to find out the details about any program in which you are interested. The fourth type of veteran loans is life insurance policy loans. Military personnel are eligible for life insurance policies. This loan program offers them the opportunity to take up to 94% of the cash value of the policy out in the form of a loan.

How to Apply for Veteran Loans

Applying for each of the different veterans loans is a bit different. First, let's look at the VA home loan programs. You need to find a home first. Once you find a home and have a signed purchase agreement, you will need to speak with a lender who handles VA loans. The lender will need to see your Certificate of Eligibility that shows you are eligible for the VA loan. You can get a Certificate of Eligibility by submitting VA Form 26-1880 along with proof of your military service. Some lenders can help veterans apply for the certificate. While waiting on the Certificate, you can work with the lender by providing appropriate information on credit and income.

Once the lender has the Certificate and personal information, the next step is to request that the VA send out an appraiser to the property. The VA will not guarantee veterans loans above the value of the home. Once the appraiser completes the review, he or she will issue a Certificate of Reasonable Value. The reasonable value cannot be lower the amount of the request loan. If it is, you might have to find alternative funding for the difference. At this point, the lender will take all the information and come back with a decision on whether they will make the loan or not. If they approve, then the final step is going to the closing and signing the loan papers.

The process to get small business veteran loans is actually quite similar to the VA loan program. Again, the SBA does not provide direct loans to individuals. They provide guarantees to pay the lender if the borrower fails to make payment. The first step is to find a lender who handles SBA loans. You will need to provide detailed information in your loan document about your business, its location, services/products, sales, employees, competition, suppliers, etc. You will also need to outline management experience and the reason you are requesting the loan.

With these veteran loans, the process gets a bit easier than for regular SBA loans. Once you get your application in place, the SBA's Patriot Express program expedites the application review process. If the SBA approves the loan guarantee, the lender will offer some of the lowest interest rates offered with any SBA backed loan. If you have trouble finding a lender, local SBA offices can help identify one.

Education loans for veterans usually go through the same FAFSA process that other non-military students go through. This means filling out the Free Application for Federal Student Aid. Part of the application involves outlining military service. Once you submit the application, it goes to the federal government for review. Those doing the review will see the military service and consider that when determining eligibility. Many federal grants help cover higher education costs for veterans. However, when the student needs additional assistance, FAFSA can open up veteran loans at lower rates.

Veterans have to meet the payments on all loans they take out. If they face financial difficulty, many of the veteran loans have special measures to help with refinancing or to help prevent default. Those are just some of the provisions of these loans. It is important to review all loan documents before you sign them, whether you are military or not.

For more information on these loan opportunities you can visit:


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