The VA Loan originated in 1944 through the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt. This feature was designed to provide housing, and home ownership became a reality for millions of veterans.

More than 25 million veterans and service personnel are eligible for VA financing, this loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.

VA will guarantee a maximum of 25 percent of a home loan amount up to $104,250, which limits the maximum loan amount to $417,000. Generally, the reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed. All veterans must qualify, for they are not automatically eligible for the program.

VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.

A veteran is eligible for VA home loan benefits up to $417,000 if he or she served on active duty in the Armed forces or Coast Guard after September 15, 1940, and was discharged under conditions other than dishonorable.
    
Required duty: 90 days or more any part of which occurred during wartime or 181 continuous days or more during peacetime.
    
2 Year Requirement rule:  A longer period of service is required for veterans who enlisted (and service began) after September 7, 1980, or entered service as an officer after October 16, 1981.
    
These veterans must have completed either 24 continuous months of active duty, or the full period for which called to active duty but not less than 90 days wartime or 181 continuous days peacetime.

Eligibility for Reserves, Guard Members of the Reserves or National Guard who are not otherwise eligible for loan guaranty benefits are eligible upon completion of 6 years service.  
   
Some spouses of veterans may have home loan eligibility. They are:
    
The unmarried surviving spouse of a veteran who died as a result of service or service connected cause and the spouse of an active duty member who is listed as missing in action or a prisoner of war for at least 90 days.  
 
There are numerous exceptions to the length of service requirements outlined in this section.  For example, one day of service is sufficient for an individual who is discharged or released from service due to a service-connected disability.