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Applying for a VA Home Loan if You’re Active-Duty

apply for va home loanActive-duty service member in the U.S. military, are eligible to receive the VA home loan. In comparison to conventional loans, military members are much better off pursuing a VA loan. This loan offers no money down, easier qualifying standards, no set credit requirement, a reduced funding fee and no mortgage insurance required, among numerous other benefits. In fact, Active Duty Purple Heart recipients will have their funding fees waived starting on January 1, 2020. Since the creation of the loan program as part of the original GI Bill, it has helped millions of veterans achieve the ideal of homeownership.

With 700,000 troops given Permanent Change of Station orders annually, it is of great importance that these men and women know what options exist and how they can help them find and afford sustainable housing. A common misconception of the VA loan is that it is only accessible by veterans; this could not be further from the truth. Active duty personnel qualify for a VA home loan if they have completed 90 days of continuous service. Active-duty status does not negatively impact eligibility; the only thing it may impact is the size of your loan entitlement. The base loan entitlement amount is for $36,000 and is determined by income, debts, and the applicant’s current entitlement usage, among other factors.

In order for an active duty service member to begin the approval process for a VA home loan, they must provide specific documentation.

Initial Documents

get your certificate of eligibility

The first step to be undertaken in the loan process is to confirm your eligibility. For active-duty military personnel, this means using your service number, as opposed to your discharge form. Active-duty members of the military are required to obtain a Statement of Service from their CO, whereas veterans are required to obtain a copy of their DD214 form. **Note, VA Home Loan Centers can provide you with your Certificate of Eligibility (C.O.E.). To order a C.O.E., complete the form above or call 888-573-4496.

The Statement of Service provides verification that you are an active member of the military, and it is used to avoid fraud. Perhaps one of the most important aspects of approval for a VA-backed loan for active-duty service members is the initial documentation phase. While many Armed Forces personnel view this step in the loan process as a nuisance, in actuality, this requirement is put in place to protect members of the military.

Once you have obtained your Statement of Service, it is up to you to ensure that it is correctly filled out and that it is signed by your Commanding Officer. Most lenders recommend service members obtain their Statement of Service as soon as possible during the loan process, which can help expedite your loan approval.

Alive and Well Documentation

Using the power of attorney to obtain a VA home loan makes it necessary for the lender to verify the service member is both alive, and not missing in action. This means that lenders will require the completion of the Alive and Well Certification from the borrower, which is essentially a statement from your Commanding Officer that certifies that you are not a POW, MIA, wounded, injured or ill. This is also necessary if a service member is currently deployed.

Starting the Approval Process

home approval process

Once an active-duty military member has completed these required documents, he or she can begin the process of applying for a VA Loan.

The general template accompanying the loan application is as follows:

  1. Filling out the loan application
  2. Verification of debt, income and eligibility
  3. Inspections of title, appraisal for habitability, pest inspection, home inspection and clearance
  4. Repairs needed would typically next be conducted
  5. Underwriting guidelines are conducted in conjunction with loan processing
  6. The appraisal next re-inspects the property
  7. If all conditions are met, loan documents will be ordered, and the property will become clear to close
  8. Following clear to close all documentation is given to the escrow, reviewed and returned, the lender then deposits funds into the deed of trust

It is important to remember that active-duty military members present a higher risk to lenders because deployment has correlated with a greater rate of missed payments in the past. It is beneficial for current service members to work with a lender that specializes in the VA home loan. This will make the process go more quickly, and make approval a more likely outcome. VA Home Loan Centers can reduce the amount of leg worker necessary for the applicant by helping the borrower obtain their Certificate of Eligibility.

Occupancy Requirements

military occupancy requirements

As well as credit, income and certain military service requirements, in order for active-duty personnel to qualify for a VA loan, they have to meet certain occupancy requirements. One of the requirements set forth by the VA stipulates that the borrower has to reside in the home they’re purchasing for more than half of the year (not applicable if deployed). The borrower is required to move into a home within a reasonable amount of time, which is defined as 60 days after closing, certain circumstances allow the borrower to extend the time after closing that they will need before moving in. For active duty borrowers, an immediate family member (such as a spouse or child) can satisfy these requirements if you are unable to live there because of military commitments. For active-duty military members who are deployed, they may receive temporary duty status, so it’s not required that your spouse occupy the home during your absence.

To begin your VA home loan, complete the form above or call 888-573-4496.