VA Loan Rules for Currently Serving Military Members

According to the VA Lender’s Handbook

According to the VA Lender’s Handbook, lenders are required to “identify service members who are within 12 months of release from active duty or end of contract term.” The lender must determine the expiration date of the current enlistment and verify whether the VA loan applicant is re-enlisting and is permitted to re-enlist.

• To accomplish this, the lender must get one or more of the following:
  Documentation that the service member has already re-enlisted or extended his/her period of active duty to a date beyond the 12-month period following the projected closing of the loan
• If the borrower is not re-enlisting or extending the service commitment, verification of a valid offer of local civilian employment following the release from active duty. This verification must include date employment will begin, projected pay, etc.
• A statement from the service member that he/she intends to reenlist or extend his/her period of active duty to a date beyond the 12 month period

Extending or Re-Enlisting

For those who will re-enlist or extend their service in the military, VA loan rules require the borrower to furnish an additional statement from the applicant’s commanding officer showing the applicant is eligible to re-enlist and that there is no reason why the re-enlistment or extension of duty would be denied.

Documentation of other unusually strong positive underwriting factors

In cases where this would not apply such as a military retirement, medical separation, etc. the commander has the option of submitting what the VA describes as “documentation of other unusually strong positive underwriting factors” which could include a down payment of 10 percent or more, “significant cash reserves” and/or, “clear evidence of strong ties to the community coupled with a nonmilitary spouse’s income so high that only minimal income from the active duty servicemember is needed to qualify.”

Contact the Department of Veterans Affairs at VA.gov for more information if you aren’t sure if these rules apply to your specific circumstances.

Do you still have questions or need some help getting started with your VA home loan?

 

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