Tips & Special Topics
Reservist and National Guard VA Home Loan Benefits
Added March 1, 2010 | Updated March 1, 2010
Certain Selected Reservists and National Guard are eligible for VA loan benefits similar to other members of the military. Some Selected Reservists and National Guard members are unaware of their VA home loan benefits altogether; some others simply need more information in order to take advantage of their entitlements. Many of the VA loan benefits are the same for Reservists and National Guard as they are for Regular Military. Understanding the basics can help Reservists and National Guard members get the most from their VA loan benefits.
VA guaranteed loans are made by VA-approved lenders to eligible military members, including certain Reservists and National Guard, in order to purchase a home for personal occupancy. The VA guaranty protects the lender from loss if a borrower fails to repay the loan. The guaranty is in lieu of down payment, and VA loans may be obtained for no money down.
Eligible service members who qualify, including Reservists and National Guard Members, can get a VA loan for up to $417,000, and even higher in some counties. Of course, someone’s credit and income help determine whether they qualify and how much they can borrow.
In order to qualify for VA home loan benefits, Reservists and National Guard members must have served in the Selected Reserves or National Guard for six years, and be currently serving, or must have
• received an honorable discharge, or
• been placed on the retired list, or
• have received transfer to Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service.
Reservists and National Guard members who completed less than six years of service may be eligible if discharged for a service-connected disability.
Before obtaining a VA loan, one must first obtain his or her Certificate of Eligibility (COE). The online system called ACE is the fastest way to obtain a COE; however, Reservists and National Guard are currently not in the system. Those who are not in the system must complete and submit VA Form 26-1880 to the Winston-Salem Eligibility Center in order to obtain a COE.
For most VA borrowers, there is a required fee associated with each VA mortgage, called a VA funding fee. This fee is slightly different for Reserves / National Guard than it is for regular military. For example, first time VA loan users in the Reserves / National Guard category who are putting zero down on a property, can expect to pay a 2.4% VA funding fee, unless exempt. For Regular Military, the fee is 2.15%.
VA loans are hard to beat when it comes to relaxed qualifying requirements, zero down, and loan terms that favor the borrower. For more information about VA loans for Reservists and National Guard members contact a VA Loan Professional.
