Reserve and National Guard members play a vital role in our nation’s defense, and they also have the opportunity to access homeownership benefits through VA loans. Understanding the eligibility requirements for VA loans as a member of the National Guard or Reserve is essential for those looking to purchase a home. In this informative and creative blog, we will explore how Reserve and National Guard members can obtain VA loans, the expanded eligibility criteria, credit and income requirements, the significance of retirement points, required documents, and valuable ADPI Pro Tips to help you navigate the VA loan process.
How to Get a VA Loan as a Reservist or National Guard Member
As a Reservist or National Guard member, obtaining a VA loan requires fulfilling specific eligibility criteria. To begin the process, you need to obtain your Certificate of Eligibility (COE) from the U.S. Department of Veterans Affairs. This document verifies your eligibility for the loan program. Once you have your COE, you can work with a VA-approved lender who will guide you through the application process and assist you in securing a VA loan.
How to Get Your COE as a Member of the Reserves or National Guard
Reserves/ National Guard, after six years of service or with a service-connected VA disability, can also get qualified in some cases. Be prepared to share your point sheet with your lender. Depending on your status and access to different systems, you can also get your Certificate of Eligibility from E-benefits, as listed above.
If you had a 90-day service with 30 days of consecutive service with title 32 USC section 316, 502, 503, 504, or 505, you could be eligible for a VA loan! For your reference, this was passed in early 2021 in a VA Circular (26-21-08). This could be a game-changer for some of our veterans. Ask your lender and continue seeking instructions and lenders who are super up to date on their information with the VA loan eligibility. As a home buyer, you will constantly be doing research to keep your house up, and if you become an investor, you will put in even more work to make sure your investment is taken care of while others are paying you. Why not start your journey of preparation by looking into all of your benefits starting now before you purchase?
Members of the National Guard or Reserve who were never activated after discharge
On the surface, members of the Nation Guard or Reserve who were never activated and were discharged are not eligible for the VA loan. Some of the wordy ways of the government can also leave room for interpretation, and also there are some other qualifying factors that may allow members to become eligible for the benefits of a VA loan. A mortgage lender who is qualified and extremely knowledgeable about the changes in the requirements for the government-backed VA loan is where a member would want to start when having their individual scenario looked at. A “no” on the surface may not be the final answer. The VA does look at each case brought to them and will evaluate to see if there are any qualifying factors that will allow a member to utilize the VA benefit, but it is not always just a yes or no answer. Speak with a lender and see what they can help you with.
Can I Get a VA Loan as a Member of the National Guard or Reserve?
Yes, members of the National Guard and Reserve are eligible for VA loans, provided they meet certain requirements. Eligibility is determined based on factors such as length of service, type of service, and character of service. Generally, National Guard and Reserve members become eligible after completing six years of service, unless activated for federal service, in which case eligibility may be granted at an earlier date.
Eligibility Requirements for VA Loan National Guard and Reserve Service Members
To be eligible for a VA loan as a National Guard or Reserve member, you must meet specific criteria. This includes having completed six years of service or having been called to active duty for at least 90 consecutive days during wartime or 181 consecutive days during peacetime. Additionally, you must have an honorable discharge or be currently serving to qualify. By consulting with a VA loan specialist, they can provide you with personally tailored guidance based on your individual circumstances.
Expanded VA Home Loan Eligibility for National Guard
National Guard members may have access to expanded VA home loan eligibility due to recent legislative changes. The National Defense Authorization Act (NDAA) for Fiscal Year 2020 expanded VA loan eligibility for certain National Guard members, allowing them to be eligible for VA loans with fewer years of service than previously required. These changes help more National Guard members realize their homeownership dreams through VA loans.
VA Loan Credit Requirements
Like any other loan program, VA loans have credit requirements that must be met for approval. However, the VA loan program is generally more flexible than conventional loans when it comes to credit scores. While there is no specific minimum credit score requirement, lenders may have their own credit standards to ensure their safety. It is advisable to maintain a good credit history and work towards improving your credit score to enhance your chances of securing a VA loan.
VA Loan Income Requirements
VA loans have income requirements to ensure borrowers have the means to repay the loan. These requirements vary depending on factors such as family size, location, and other financial obligations. Lenders typically evaluate your debt-to-income ratio to determine your ability to adequately manage mortgage payments. Providing accurate income documentation and working with a VA loan specialist, you will be able to navigate the income requirements more effectively.
VA Loans Retirement Points
For National Guard and Reserve members, retirement points play a significant role in determining VA loan eligibility. Retirement points are earned based on service and can demonstrate the length and nature of your military service. These points are considered in conjunction with other eligibility criteria when assessing your qualification for a VA loan.
VA Loan Documents for Guard & Reserve members
- Certificate of Eligibility (COE): The COE proves you’re entitled to a VA Loan as a current or former service member. Guard and Reserve members will often need a copy of their Statement of Service, which is signed by, or by direction of, the adjutant, personnel officer, or commander of the unit or higher headquarters they are attached to.
- DD Form 214: You’ll need a copy of your DD Form 214 once you’ve completed your term of service. This document is the most comprehensive record of military service, including the character of service and reason for separation.
- NGB Form 22: The National Guard equivalent to the DD Form 214. This form outlines your service in the National Guard.
- Proof of Income: Pay stubs, W-2s, or tax returns might be needed to prove your income. If you receive income from other sources, such as retirement or rental income, you’ll need to provide documentation for these as well.
- Bank Statements: You’ll need recent bank statements to verify your financial situation.
- Credit Report: Lenders will pull your credit report. While the VA doesn’t set a minimum credit score for loans, many lenders will require a minimum score.
- Statement of Service: If you’re currently serving, a statement of service signed by your commander or a designated representative, stating your name, Social Security number, date of birth, entry date on active duty or into the Guard or Reserve, duration of lost time, and the name of the command providing the information.
ADPI PRO TIPS
- Pre-Approval: Get pre-approved for your loan, as this can give you a clear idea of your budget and show sellers that you’re a serious buyer.
- Debt-to-Income Ratio: Keep an eye on your debt-to-income ratio. The VA typically wants to see a debt-to-income ratio of 41% or less.
Remember, every lender can have slightly different requirements, so always make sure to ask if there’s anything else you may need.
