When working with military personnel and their spouses or with veterans, it’s important to have a working knowledge of Veterans Administration (VA) mortgages and other housing benefits. Here’s a quick look at what you need to know.
Who qualifies for VA mortgages?
A person qualifies for VA mortgage benefits if he or she served in the U.S. armed forces for at least 24 months of continuous active duty and was honorably discharged. He or she may also qualify even if they have served less time if they were medically discharged for a service-connected disability. Reservists and Guardsmen must have served at least six years in their branch’s reserve or served at least 90 days on an active wartime basis to qualify for VA mortgage benefits.
Un-remarried widows or widowers of military personnel who died in active service, or who died of illness or injury resulting from service, or spouses of military personnel missing in action or prisoners of war, can qualify for VA mortgage benefits. A remarried widow or widower can qualify if they remarried after age 57 and after December 16, 2003.
Excellent mortgage loan terms
VA mortgage loans are available to those who qualify with zero down payment. Because the government is guaranteeing VA loans, lenders will offer lower Interest rates. Most of the traditional fees for an appraisal, credit report, title insurance, lender origination fee, recording fees, and survey fees can be rolled into the loan.
A VA appraiser will check that the home meets certain minimum property requirements (MPR). These ensure basic conditions for livability, such as adequate electricity, heating and cooling, and roofing; sufficient floor space for basic living; a clean and continuous water supply; and no lead-based paint, wood-destroying insects, fungus or dry rot.
Other financial benefits to veterans
Besides these excellent mortgage terms, the government offers other financial aid that can indirectly assist with housing financing.
The Service Members Civil Relief Act (SMCRA) can, among other things, reduce the interest rate on debts incurred before entering active duty as well as postpone foreclosures during or within nine months of active duty unless ordered by a court. Under certain conditions, the SMCRA can protect against repossessions, judgments and evictions.
Residency rules of relief
The Veterans Benefits and Transition Act (VBTA) allows military spouses who have moved to a new duty station to maintain their legal residency in the state from which they moved. Conversely, he or she can choose to be governed by the laws of the state to which their military spouse has been reassigned, regardless of whether the civilian spouse actually has moved there.