Military Benefits For Buying A House

Military Benefits For Buying A House

Homeownership is an important part of the lives of veterans and their families. The homeownership rate among ex-servicemen and women far outpaces the rate among civilians. However, the financial toll of military service can make it difficult for some veterans even to get a foothold in the civilian world, let alone apply for a mortgage loan.

If you have served in the military, you have access to several military benefits for buying a house, ranging from what’s arguably the most powerful home loan on the market to financial protections like mortgage insurance.

VA Loan Program

Since the Veterans Affairs loan program began in 1944, the Department of Veterans Affairs has offered more than 21 million loans to veterans, active-duty military service members, and their spouses. With this program, many people (soldiers) most deserving of the American dream, a dream they helped build and safeguard, have become more eligible to purchase a home.

The VA home loan program offers several military benefits for buying a house that can help make home-buying easier, among which are the following:

  • There is no down payment required
  • Mortgage insurance is not required
  • The average interest rate is lower
  • Closing costs are limited
  • Less stringent credit requirements

Since the introduction of VA home loans, the number of veteran-owners has exploded in recent years, making VA home loans a very appealing option for people without the necessary credit score to qualify for conventional loans. In reality, many people who qualify for VA home loans are unaware of the military benefits for buying a house. Also, some buyers are mistaken in assuming that government-backed loans carry endless red tape, causing them to miss out on the benefits of said loans.

Some military veterans are eligible for VA mortgage loans depending on where they served during their service, such as:

  • The period of active duty during wartime should be 90 consecutive days
  • The time spent on active duty during peacetime has been 181 consecutive days
  • A National Guard or Reserve member who has served for six or more years

Spouses of military members who have died or have been disabled in the line of duty. You must obtain a Certificate of Eligibility from a VA lender and get a sense of your purchasing power by talking to them.

Occupancy & Power Of Attorney

VA loans are designed to help buyers permanently purchase homes they intend to live in. For some veterans and active-duty military service members, however, there are some exceptions to the program.

The spouse or children of a VA buyer might be able to fulfill the occupant requirement on behalf of the veteran. Also, a VA buyer whose spouse or family member is deployed or otherwise unable to manage the loan process can typically appoint a power of attorney to process and sign all documents associated with the loan.

Powers of attorney come in two varieties: general and specific power of attorney. In part, the type of VA home loan required depends on what documents the VA home buyer can sign in connection with the loan. It will be easier for military families to purchase a home while their spouse and children are on deployment or unaccompanied assignment using the power of attorney and occupancy options. This will help alleviate the burden of frequent moves on military families.

Basic Allowance For Housing

Many active-duty military members are surprised to find out they can use the money they receive as a monthly housing allowance as a down payment for a housing loan. Lenders can consider Basic Allowance for Housing (BAH) as an adequate income when calculating loan repayments. Living in a high-cost area can help you leap from renting to owning, especially if you have to move a lot.

The amount of BAH you will receive will depend on several factors, including your pay grade, your location of duty station, and the size of your family. There can also be annual changes to the amount of housing allowance. Please refer to the Defense Department’s website, where you will find a BAH calculator that will help you calculate your BAH.

Financial Protections

Serving armed forces members may face specific financial challenges after becoming homeowners. Changing stations and being deployed can be financially and emotionally draining for a family. Active duty military personnel and their families are provided financial protection through the Servicemembers Civil Relief Act (SCRA) regarding interest rates, income tax payments, eviction, foreclosure, and other monetary issues.

For example, military personnel can request that their creditors, including their mortgage lender, cap their interest rates at 6% while serving in the armed forces. Additionally, the SCRA requires lenders and servicers to seek a court order before foreclosing on military members while on active duty and up to nine months after their service is completed.

Veterans Affairs offers homeowners protection against foreclosure through its foreclosure avoidance protection program. A national Veterans Administration (VA) team of experts works with lenders and servicers to find alternatives to foreclosure on behalf of struggling homeowners. In the past six years alone, nearly 500,000 veterans and service members have been helped to avoid foreclosure through the work of this organization.

More information regarding the SCRA can be obtained from the Legal Assistance office in your locality. The VA loan program is available to homebuyers who are in danger of defaulting on their mortgage by calling 877-827-3702 or by filling out the online form.

If you’re curious about the benefits of dating a military man and other military-related topics, explore our blogs at PAGuard today.

Leona Rankin
Founder Leona has worked for years as a Corporate Security Manager until she decided to form the company. She deemed all information regarding security should be regarded as a necessity, especially nowadays where threat may be imminent everywhere, whether in the physical, or the digital world.