New legislation that took affect in April 2021 has expanded VA home loan eligibility to other members of the Army National Guard and Air National Guard. National Guard members previously ineligible for a VA loan might qualify under the new requirements.
What is a VA Loan?
VA home loans are mortgages backed by the U.S. Department of Veterans Affairs. This program helps active duty service members, veterans, and their eligible spouses purchase a home with no money down and no mortgage insurance. Other fees may apply.
This is different from other home loans. Today, most mortgage programs require a minimum down payment, and you may be required to pay mortgage insurance when you put down less than 20%.
Since VA home loans require less out-of-pocket, it’s a more affordable solution for some families.
But although VA home loans have helped service members of different branches purchase a home—Army, Navy, Marines, Air Force, Coast Guard—the program was previously only available to certain members of the National Guard. This included members with 90 consecutive days of active service under Title 10 orders, or those with at least six years of honorable service. Title 10 is when a President orders the National Guard to report for active duty.
Under the old requirement for a VA loan, National Guard service members with Title 32 orders didn’t qualify for VA loans. Title 32 orders is when guard members are activated by governors to respond to national disasters, social unrest, and other domestic situations such as Covid-19 responses.
The new legislation now allows National Guard service members with Title 32 orders to qualify for VA loans.
To qualify for the loan, newly eligible service members must have completed 90 cumulative days of full-time National Guard duty, with at least 30 of those days being consecutive.
Eligibility is also retroactive, meaning it applies to current and “former” National Guard members. So even if you served years ago, you might still qualify for a VA loan under the new Title 32 guideline.
How to Apply for a VA Loan
To start the process of getting a VA loan, you must meet with a VA-approved mortgage lender. Although the Department of Veterans Affairs guarantees the loan, they don’t provide funding.
Keep in mind, that while VA loans don’t have minimum credit score requirements, most lenders require a minimum credit score.
You’ll also need to obtain a Certificate of Eligibility (COE) to qualify for a VA loan. This document confirms your eligibility for a VA loan based on your service history. Visit the VA’s eBenefits website to get your COE, or ask your lender to obtain one on your behalf.
A COE not only confirms eligibility, it also provides information about your VA entitlement. This is the amount the VA will repay your mortgage lender if you default.
Get Your VA Loan Today
Mortgage rates remain at historic lows, so now might be the right time to purchase a home or refinance an existing mortgage. If you’re interested in a VA loan, speak with the loan experts at FirstBank Mortgage and learn how to get started.