The VA home loan program is a significant benefit available to veterans, active-duty service members, and certain members of the National Guard and Reserves. For those who have served their country, this program run by the U.S. Department of Veterans Affairs (VA) offers favorable loan terms and conditions, making homeownership more accessible. But how exactly does military service impact VA home loan eligibility? Let’s explore the key factors and requirements that determine eligibility for this valuable benefit.

"Service is the rent we pay for the privilege of living on this earth." – Shirley Chisholm, the first African American woman elected to the United States Congress and the first woman to seek the Democratic nomination for President of the United States.

Understanding VA Home Loan Eligibility

Eligibility for a VA home loan is primarily based on the length, character, and type of service. Here are the main categories that determine who qualifies for a VA home loan:

1. Active-Duty Service Members

Active-duty service members currently serving in the U.S. military are eligible for a VA home loan after a specific period of continuous service. The general requirements are as follows:

• At least 90 continuous days of active service during wartime

• At least 181 continuous days of active service during peacetime

2. Veterans

Veterans who have served in the U.S. military and have been honorably discharged are typically eligible for a VA home loan. The specific requirements depend on when they served:

• World War II, Korean War, and Vietnam War: At least 90 days of active service

• Post-Vietnam Era (May 8, 1975 – September 7, 1980): 181 days of continuous active service

• Gulf War Era (August 2, 1990 – present): 24 months of continuous active service or the full period called to active duty (at least 90 days)

3. National Guard and Reserve Members

Members of the National Guard and Reserves are also eligible for VA home loans, though their requirements differ slightly from those of active-duty service members and veterans. To qualify, they generally need:

• At least six years of service in the Selected Reserve or National Guard

• Honorably discharged, retired, transferred to the Standby Reserve, or continuing to serve in the Selected Reserve

Additionally, National Guard and Reserve members who have been called to active duty for at least 90 days during wartime or 181 days during peacetime may qualify under the same terms as active-duty service members.

4. Surviving Spouses

Certain surviving spouses of deceased veterans may also be eligible for a VA home loan. The requirements for surviving spouses include:

• Unmarried surviving spouse of a veteran who died in service or as a result of a service-connected disability

• Surviving spouse who remarries after age 57 (and after December 16, 2003)

• Surviving spouse of a service member missing in action or a prisoner of war

The Importance of the Certificate of Eligibility (COE)

Regardless of the category under which you qualify, obtaining a Certificate of Eligibility (COE) is a critical step in the VA home loan process. The COE verifies your eligibility for a VA loan and is required by lenders before they can process your loan application. You can obtain your COE through the VA’s eBenefits portal, by mail, or with the assistance of your lender.

Character of Service

The character of your service discharge also impacts your eligibility for a VA home loan. To qualify, your discharge must be under conditions other than dishonorable. This typically includes honorable discharges, general discharges under honorable conditions, and certain other types of discharges, depending on the circumstances.

Impact of Military Service on Loan Benefits

Military service not only determines your eligibility for a VA home loan but also affects the benefits you receive. Here are some ways your service can impact your loan benefits:

VA Funding Fee

The VA funding fee is a one-time fee that helps fund the VA loan program. The amount of the fee varies based on your military category, down payment amount, and whether you’re using the VA loan for the first time or subsequent times. Veterans with service-connected disabilities are exempt from the funding fee, providing additional savings.

Loan Limits and Entitlement

Your length of service and eligibility category can also impact your loan limits and entitlements. Veterans with full entitlement have no loan limits, meaning the VA will guarantee up to 25% of the loan amount without a maximum cap. This can be particularly advantageous in high-cost housing markets.

Additional Benefits for Disabled Veterans

Disabled veterans who have sustained service-connected injuries or illnesses may qualify for additional benefits, including:

• Exemption from the VA funding fee

• Access to Specially Adapted Housing (SAH) grants

• Special Housing Adaptation (SHA) grants for home modifications

These benefits can significantly enhance the home-buying experience and provide necessary accommodations for living comfortably.

Conclusion

Military service plays a crucial role in determining eligibility for VA home loans and the specific benefits you can receive. Whether you are an active-duty service member, a veteran, a National Guard or Reserve member, or a surviving spouse, understanding your eligibility and the associated benefits is essential for making the most of the VA home loan program. By obtaining your Certificate of Eligibility and working with a knowledgeable lender, you can leverage your service to secure favorable home loan terms and achieve your homeownership goals.

FAQs

How do I obtain a Certificate of Eligibility (COE) for a VA loan?

You can obtain your COE through the VA’s eBenefits portal, by mail, or with the assistance of your lender.

What is the VA funding fee, and who is exempt from it?

The VA funding fee is a one-time fee that helps fund the VA loan program. Veterans with service-connected disabilities are exempt from paying this fee.

Can National Guard and Reserve members qualify for a VA loan?

Yes, National Guard and Reserve members can qualify if they have at least six years of service or meet specific active-duty service requirements.

Are surviving spouses eligible for VA loans?

Certain surviving spouses of deceased veterans may be eligible, including those who are unmarried or remarried after age 57.

What additional benefits are available for disabled veterans?

Disabled veterans may qualify for exemption from the VA funding fee and access to Specially Adapted Housing (SAH) or Special Housing Adaptation (SHA) grants.

For further advice on how to make sure your VA home loan process goes as fast and smoothly as possible, please read our article titled: How to Leverage Your VA Home Loan Benefits