The GI Bill, since its 1944 inception has provided veterans with crucial assistance in many different areas of life. The Post 9/11 updated GI Bill has continued in this tradition, expanding and improving many available benefits. Active duty service members with 90 days of service and honorably discharged veterans qualify for this program. Advantageously, entitlements of the Post 9/11 GI Bill include educational assistance and housing income. For those pursuing educational advancement, tuition coverage for up to 36 months is accessible. Additionally, a stipend for books and school supplies has been made available. Aiding students is the monthly housing allowance provided by the GI Bill entitlement.
In conjunction with the VA home loan, it is often asked by applicants “can I use my GI Bill education or housing income to qualify for a home loan”?
The answer to this questions is a yes, but with contingences that making do so difficult and perhaps unlikely.
The appeal of VA loans is largely rooted in the far more lenient underwriting guidelines presented, especially in comparison with other loan programs. This leniency allows for applicants to enjoy greater flexibility in meeting minimum qualifying standards.
Although the VA program will allow you use (specific) GI Bill income to qualify, you may only do this if the particular underwriter you are working with allows you to do so. Additionally, you must be able to receive the income for a period after you close the loan. The total GI bill income will not be counted if the income is allowed to be used for loan qualification. Only the income for sustenance will be used.
Many underwriters will not allow a borrower to apply for a VA loan using GI bill income to repay the debt. The reason for this is that GI Bill income is not supposed to be used to incur new debt, only to be used to pay for housing while in school. It is the view of most underwriters that the GI Bill income is unstable to sustain a long term mortgage payment.
For more information about the VA home loan contact VA Home Loan Centers.