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While the G.I. Bill educated millions of military veterans, VA cash advances give them a step up on houseownership. Here are the fundamentals of VA cash advances.

The fundamentals of VA cash advances

Much like a HUD, the VA does not actually issue house cash advances to veterans. Instead, it makes house cash advances easier to get by guaranteeing that lenders will be repaid the full amount issued. This protects lenders from the risk of default on the cash advance.

In exchange for the VA guarantee, lenders provide easier cash advance processing and make it far easier to get into a house from a cost perspective. In many cases, the borrower will not be required to make a down payment or a nominal one if necessary. The borrower will also not be require to pay private mortgage insurance, which non-military borrowers typically must pay on cash advances made with less than a 20 percent down payment.

One potential downside to a VA cash advance is the guarantee amount. Currently, the maximum amount is $203,000. In many parts of the country, this figure is insufficient to buy a house. Veterans should contact their local benefits office to find out current guarantee amounts as the program is modified from time to time.

To obtain a VA cash advance, a person must meet a few general requirements. Obviously, they must have served in the military. Specifically, you must served in active duty during World War II or later and not have received a dishonorable discharge. Individuals serving during times of war must have put in at least 90 active duty days. Individuals serving during periods of peace must have put in 180 days. For veterans who served after 1980, the qualification time period is two years unless active duty occurred during either of the Gulf Wars. In such situations, the time period is 90 days. Obviously, it gets a bit confusing. Make sure to speak with your local office to determine your eligibility.

VA guaranteed cash advances are excellent financial products for purchasing a house. Every veteran should look to them first when contemplating obtaining a mortgage cash advance.