What to know about VA Loans if you're a spouse in a military family

Is your family in the market for a new home? Maybe you are affiliated with the military, either active duty or veteran status. In that case, you may be eligible for a VA home loan from the US Department of Veterans Affairs' VA loan program.

 

This is a fantastic opportunity to get a mortgage with built-in consumer protections, excellent terms and loads of benefits, like:

• 100% financing available, no down payment required
• Low closing costs
• Low mortgage rates
• High loan limits
• Low credit score requirements
• No mortgage insurance

 

Applying for a VA Loan is not solely dependent on the vet

 

Little known fact: the process of applying for this government-backed mortgage program is not limited to just the person who's affiliated with the military. With married couples, the spouse can also do a lot of the legwork. In fact, many military spouses handle the entire transaction for their partner and family. This is especially helpful for service members and their families who don't want the fact that they're away on active duty to slow down their search for the home of their dreams.

Other scenarios exist as well. Military spouses:

• may be co-borrowers, providing income that helps the family qualify for a larger loan amount 
• may also be eligible as military service members or vets and have their own entitlement that increases the loan benefits
• may have VA loan eligibility in the wake of a loved one's passing

 

VA Loan spousal requirements

 

A marriage does impact your family's eligibility to get a VA loan, as does your spouse's VA status.

 

IF YOUR SPOUSE IS ALSO A VETERAN OR SERVICE MEMBER

 

If your spouse has served — or is currently serving in active duty — in the US Military (Air Force, Army, Coast Guard, Marine Corps, Navy or the National Guard), they may also be eligible for VA home loan benefits. 

 

If this is the case, ask yourself the following two questions:

1. Will your spouse be named on the loan application? 
2. Do you live in states where community property law applies to all assets acquired by spouses during the marriage? As of 2020, community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. More on this later.

 

If you answered yes to any of the above, ask yourself if you plan to use both of your entitlements. 

• If using just one entitlement, lenders will process the loan as if only one spouse is a veteran. 
• If using both entitlements, look into a Joint VA loan, which is often used in situations where a VA Loan will use the entitlements of multiple vets (they don't need to be married). Take note: FYI: 
  • Joint VA loans typically require some additional paperwork. 
  • Joint VA loans for a married couple can often be approved automatically with the appropriate authority. 
  • Joint VA loans can also be used by unmarried people interested in purchasing property jointly, but the VA must approve them before moving forward.

 

IF YOUR SPOUSE IS NOT A SERVICE MEMBER OR VETERAN

 

For couples where a service member or veteran and a person not in the military are looking to buy a home, remember that only one spouse needs to be eligible to secure the full VA loan guaranty. 

 

First, you'll need to decide if the non-military person will be co-signing the mortgage application. Here are a couple of things to consider:

• If the spouse is not co-signing, the lender may not consider credit history, but their debt will be factored into household liabilities. 
• If the spouse is co-signing, their income, credit and debts will need to be considered and verified just like the service member. 
• If the vet or service member relies on their spouse's income to qualify for the loan — or if they count alimony, child support or maintenance payments as part of their income — spousal income will also factor into the equation.

 

COMMUNITY PROPERTY CONCERNS

 

What if you plan to buy in a community property state, like Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin? According to The Mortgage Reports, these “community property states” consider assets and liabilities accrued during a marriage to be jointly owned. Therefore, vets applying for a VA loan in those states should expect for their non-military spouse's income, credit and debt to be examined whether they're signing on the dotted line or not.

 

Things to know about eligibility

 

IS YOUR FAMILY ELIGIBLE FOR A VA LOAN?

 

Remember, spouses of vets and active military personnel can handle the application paperwork in part or entirely on behalf of the family. But how do you determine eligibility?

 

Some general eligibility rules:

• Veterans are eligible if they've served on active duty for 90 days during wartime or at least 181 consecutive days during peacetime. 
• If the entitled borrower enlisted and began service after September 7, 1980, they need to have served for at least two years.  
• If the entitled borrower was an officer, they had to have begun service after October 16, 1981.  
• If the entitled borrower is affiliated with the National Guards or is a reservist, there's also a six-year service requirement.

 

WHAT IF MY MILITARY SPOUSE IS DECEASED?

 

Surviving spouses of prisoners of war or service members who went missing in action may also be eligible if they have not gotten remarried. Also eligible are surviving spouses of veterans who died on active duty or from service-related causes. Additionally, VA Loans are available to surviving spouses who remarried only after turning 57 on or after December 16, 2003. Find all current eligibility requirements here.

 

TYPES OF VA LOANS OFFERED

 

Purchasing A Home

• Movement Mortgage offers VA Loans for home purchase as fixed-rate mortgages with 15-year and 30-year terms and as a 5/1 ARM (adjustable-rate mortgage.) One of the top benefits of a VA purchase loan is that you'll receive up to 100% financing without requiring mortgage insurance if you qualify. This could mean hundreds of dollars of savings each year. Your loan officer will fill you in on what credit scores are required for each loan term.
• There may be unique property tax reductions to military borrowers, depending on the state you're buying in.
• However, keep this in mind: You'll need to get a Certificate of Eligibility from the VA and plan to occupy the property as your primary residence. Investment properties are not eligible under the VA Loan.

 

Refinancing A Home

• Movement also offers two refinancing options. Military families can refinance an existing VA loan to reduce the interest rate or switch an adjustable rate to a fixed rate through the VA Interest Rate Reduction Refinancing Loan (IRRRL).  
• A nice perk here is that there is no appraisal or credit underwriting required. And our VA Cash-Out Refi offers qualified vets the ability to tap into up to 100% of their accrued home equity. A Movement Mortgage loan officer will look at the LTV (loan-to-value) ratio of our home to see if this refinance option is available to you.

 

When it comes to home financing, we're of the “nobody left behind” mentality 

 

Eligibility for a VA loan is earned through service. If you're a military veteran looking to buy, refinance a VA loan or want to learn more about VA homeownership benefits, let us know today. At Movement, we want to help you take full advantage of your benefits and have a team of experienced loan officers specializing in the VA loan program. They can answer your questions about how VA loans work, VA loan spouse requirements or other issues related to mortgages.  

 

Check out our Movement Military page to view inspirational videos, check eligibility or get a quote online. If you're ready to talk now, find a loan officer in your area to get started.