- The Washington Times - Friday, June 8, 2001

I have yet to see a real estate contract folder that is less than a couple of inches thick. The sales contract may run from one to a dozen pages, but plenty of trees are required to fill the rest of the folder for disclosure forms, mortgage application, addenda, notification forms, etc.

If you are applying for a government-insured loan from an agency such as Federal Housing Administration (FHA), Farmer's Home Administration (FmHA) or Veterans Affairs (VA), the file gets even thicker. Nevertheless, much of the paperwork can save you money.

For instance, those fortunate buyers who can qualify for a VA loan have a few more pieces of paper to file than the rest of us.

The VA program is a great benefit to borrowers who are on active duty in the military or have ever served on active duty. Simply, the loan allows a buyer who is a veteran to purchase a house with no money out of his or her pocket.

Before you even can apply for a VA loan, a borrower must first prove to the lender that he or she is eligible for such a loan by supplying a Certificate of Eligibility. This certificate is available through VA. To start the process, a veteran or active military personnel must fill out VA Form 26-1880 (Request for a Certificate of Eligibility for Home Loan Benefits) and submit it to one of VA's Eligibility Centers. There are only two such centers in the country. The office in Los Angeles serves the Western states and the Eastern side of the country goes through Winston-Salem, N.C.

Visit the Web site (www.homeloans.va.gov/elig.htm) to see the dividing line.

Part of the eligibility process is to provide acceptable proof of military service, which involves several other forms, depending on when you were discharged.

Get your pencils sharpened.

For those in Regular active duty:

• Discharged after Jan. 1, 1950: send a copy of DD Form 214, Certificate of Release or Discharge From Active Duty. (Submit one of these with the VA Form 26-1880.)

• Discharged after Oct. 1, 1979: send a copy of DD Form 214 copy 4.

For those currently on active duty:

• Send an original statement of service signed by, or by direction of, the adjutant, personnel officer or commander of your unit or higher headquarters.

For veterans discharged from selected Reserves or National Guard:

• Copies of adequate documentation of at least six years' of honorable service must be included. For Army or Air Force National Guard, submit NGB Form 22 (Report of Separation and Record of Service) or NGB Form 23 (Retirement Points Accounting).

Veterans who have been out of the military for a while may want to consider searching for military records through yet another form: Standard Form 180, Request Pertaining to Military Records.

Keep in mind, the VA loan stays with the property. If a buyer assumes a VA loan, the original borrower may not obtain another VA loan until that original loan is paid off or if the new borrower is also a veteran and willing to substitute his or her available eligibility for that of the original veteran.

If a veteran pays off a loan and hangs onto the property and attempts to purchase another property with another VA loan, eligibility for VA benefits may be restored one time only. Just provide proof that the first VA loan has been retired to prevent delays in the new financing.

One final note: A surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is still eligible to use the VA loan benefit so long as the surviving spouse has not remarried. If the surviving spouse obtained the loan with the veteran before the veteran's death, the spouse may qualify for a VA-guaranteed interest-rate-reduction refinance loan. Contact one of the Eligibility Centers for details.

M. Anthony Carr has written about real estate for more than 12 years. Send comments and questions by e-mail (manthonycarr@erols.com).

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