How Long Does It Take to Get Approved for a VA Loan?

A VA loan represents a significant benefit for eligible service members, veterans, and surviving spouses, offering a pathway to homeownership with favorable terms. While the overall timeline can vary, understanding the distinct stages and influencing factors can help manage expectations. This article clarifies how long the VA loan approval process generally takes.

Key Stages of VA Loan Approval

The journey to VA loan approval involves several distinct stages, beginning with pre-approval. This initial step involves the lender assessing a borrower’s creditworthiness, financial standing, and military service history to determine eligibility and potential loan amount. The pre-approval process can take several days to a week, or up to three weeks. A pre-approval letter is valid for 60 to 90 days.

Once a borrower has pre-approval and finds a suitable property, the formal loan application is submitted after an offer is accepted and a purchase contract is in place. Following application submission, the loan moves into underwriting. This involves a comprehensive review of the borrower’s financial details and the property’s information. Underwriting spans several days to a few weeks, and can extend from three to six weeks depending on the loan’s complexity and the lender’s volume.

Concurrently with underwriting, an appraisal and property inspection are ordered. The VA requires an independent appraiser to assess the property’s value and confirm it meets the VA’s Minimum Property Requirements (MPRs). MPRs ensure the home is safe, structurally sound, and sanitary. This appraisal process generally takes between seven and twenty-one business days, with an average turnaround of ten days. The VA appraisal remains valid for 180 days.

The final stage is closing, which occurs once all conditions from underwriting and appraisal are satisfied. During closing, all necessary documents are signed, and funds are disbursed. The entire process, from a signed contract to closing, typically takes an average of 40 to 50 days, which aligns closely with conventional loan timelines. Some lenders may aim for a quicker closing, potentially within 30 days or less.

Factors Influencing the Approval Timeline

The timeline for VA loan approval can fluctuate based on several variables. The responsiveness of the borrower is a significant factor; promptly providing all requested documents and information can greatly expedite the process. Delays often occur when lenders need to repeatedly request missing or updated paperwork.

The efficiency and current workload of the chosen lender also play a considerable role. Lenders with high loan volumes or less streamlined internal processes may take longer to process applications, conduct underwriting reviews, and order appraisals. This internal capacity can directly influence how quickly a loan moves through its various stages.

Issues arising during the appraisal and inspection phase can also cause delays. If a property does not meet the VA’s Minimum Property Requirements or if its appraised value falls below the agreed-upon purchase price, additional time is needed for repairs or negotiations.

The complexity of the borrower’s financial situation and any issues discovered during underwriting can prolong the timeline. Unique credit history nuances, recent employment changes, or complex income structures may require additional scrutiny and documentation from underwriters. Furthermore, the type and location of the property can affect the appraisal timeline; unique homes or those in rural areas might experience longer waits for an available appraiser. Finally, broader housing market conditions, such as high demand or appraiser shortages, can impact processing times across the board.

Preparing for a Smooth Application

Preparing thoroughly before initiating a VA loan application can significantly contribute to a smoother and faster approval process. A fundamental requirement for VA loan eligibility is the Certificate of Eligibility (COE), which confirms a service member’s or veteran’s service history meets the VA’s requirements. Obtaining a COE can be done by a lender through the VA’s automated system, or directly by the applicant via the VA’s eBenefits portal or by mail using VA Form 26-1880. Required documents for a COE include:

• Active duty service members: Statement of Service signed by a commanding officer.
• Veterans: DD Form 214, Certificate of Release or Discharge from Active Duty.
• Members of the National Guard and Reserves: NGB Form 22 or NGB Form 23 (Retirement Points Statement).
• Surviving spouses: Veteran’s DD214 along with VA Form 26-1817 or VA Form 21P-534EZ if not receiving Dependency & Indemnity Compensation (DIC) benefits.

Gathering comprehensive financial documentation is another important preparatory step. Lenders typically require recent pay stubs, covering the last 30 days, along with W-2 statements for the previous two years. For self-employed individuals, federal tax returns for the past two years are usually necessary. Bank statements from checking, savings, and retirement accounts, spanning the last two to three months, are also requested to verify assets and financial stability.

Understanding one’s credit readiness before applying is also beneficial. While the VA does not impose a minimum credit score, individual lenders often have their own credit score requirements. Reviewing one’s credit report for any discrepancies or negative marks can allow time for correction, potentially improving loan terms. A key financial metric lenders evaluate is the Debt-to-Income (DTI) ratio, which compares monthly debt payments to gross monthly income. While the VA does not set a strict maximum DTI, it suggests lenders apply additional scrutiny to borrowers with a DTI exceeding 41%. A higher DTI can sometimes be offset by compensating factors like substantial residual income.

Finally, budgeting for closing costs is a practical pre-application consideration. VA loan closing costs typically range between 2% and 6% of the home’s purchase price or 1% to 6% of the loan amount. These costs can include the VA funding fee, which ranges from 0.5% to 3.3% of the loan amount depending on factors like loan type and down payment, and a loan origination fee, capped at 1% of the loan amount by VA regulations. While many closing costs can be negotiated for the seller to cover, or the VA funding fee can be rolled into the loan, understanding these potential expenses beforehand helps ensure financial preparedness.