Veterans and their families continue to turn to the Veterans Administration for help in achieving the dream of homeownership.

Last year, the VA guaranteed about 180,000 mortgages across the country, with a total value of about $36 billion. The agency will likely surpass that total for 2009, as veterans have flooded the VA with applications in the wake of the housing and credit market collapses.

VA loans are backed by the federal government, which basically promises to repay 25 percent of a loan in the unlikely event of a default. The VA recently increased the amount of that guarantee, which in turn led to an increase in the VA loan limits. Currently, qualified borrowers can borrow up to $417,000 with no down payment, with the VA guaranteeing up to $104,250. Those loan limits actually extend above that threshold in some of the country’s most expensive regions.

Qualified borrowers can use VA loans for several purposes, including building, buying or refinancing a residence. They can also use the loan for improvements or repairs on a veteran-owned residence. Veterans and their families can also use a VA loan to purchase a condominium in an agency-approved development.

Residences must be owner-occupied, meaning VA loans are not an option for purchasing land or investment properties.

VA loans provide veterans with a host of benefits, with the no down payment at the top of the list. But some others include:

-Less strict qualification criteria

-No need for private monthly mortgage insurance

-No penalty for pre-paying your loan

-Higher debt-to-income ratio allowed than for most conventional loans

-Sellers can pay up to 6 percent of closing costs

To be considered for VA loan, applicants must first obtain a Certificate of Eligibility. This official documentation basically ensures that a prospective borrower meets the basic criteria. Once the applicant obtain a COE, then the process continues with a look at financial health and history.

Veterans with less than perfect credit or a history of foreclosure or bankruptcy can still qualify for a VA loan. More than 80 percent of VA home loan borrowers could not have qualified for a conventional home loan.