Reservists and members of the National Guard who are looking for a VA home loan should become familiar with the VA loan rules that spell out minimum periods of military service to establish eligibility for the VA loan benefit.
News, updates, and explanations to keep you informed.
VA Loan Eligibility for National Guard and Reserve Members
Reservists and members of the National Guard who are looking for a VA home loan should become familiar with the VA loan rules that spell out minimum periods of military service to establish eligibility for the VA loan benefit. VA loans, while definitely part of a military pay and benefits package, are not automatic. The borrower must have served for a minimum length of time and meet other requirements related to military service.
For example, at the time of this article, currently serving active duty military members must be in uniform for three months or a total of "90 continuous days" according to the VA official site before they can apply for a VA loan certificate of eligibility.
When it comes to Gulf War veterans (who are no longer on active duty) who served from August 2 1990 to the present are required? These vets must have served two continuous years (24 months) or "the full period (at least 90 days) for which you were called or ordered to active duty".
What about the VA loan eligibility rules for members of the Guard and those serving as reservists?
In general terms, the Department of Veterans Affairs requires six years of service in the Guard or Selected Reserve, and the following criteria must met in connection with that service:
discharged honorably, OR
placed on the retired list, OR
transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable, OR
now serving in the Selected Reserve
There are some exceptions for some veterans who don't meet minimum time-in-service eligibility requirements. According to VA.gov , "If you do not meet the minimum service requirements, you may still be eligible if you were discharged due to (1) hardship, (2) the convenience of the government, (3) reduction-in-force, (4) certain medical conditions, or (5) a service-connected disability."
The stipulation concerning those affected by a "reduction-in-force" may become important to some now serving, since budget cuts and other factors have forced all branches of the military to find ways to reduce the size of the force.
One example--a May 2012 report titled "Army Drawdown and Restructuring: Background and Issues for Congress". This report mentions a set of troop reductions to include ".two heavy brigade combat teams (HBCTs) in Europe will be eliminated out of a total of eight BCTs that will be cut from Active Army force structure. The Army has stated that it may cut more than eight BCTs. Army endstrength will go from 570,000 in 2010 to 490,000 during the Future Year Defense Plan (FYDP) period."
How would the military deal with such budget and personnel cuts? One way would be to implement what the report describes as "Selective Early Retirement Boards (SERBs) and Reduction-in-Force (RIF). Voluntary tools that the Army might use include the Voluntary Retirement Incentive, the Voluntary Separation Incentive, Special Separation Bonuses, Temporary Early Retirement Authority, the Voluntary Early Release/Retirement Program, and Early Outs."
If you serve in the Guard or Reserve and are affected by such cuts, the early outs and voluntary early release programs could factor in when it comes time to determine a member's VA loan eligibility. Never assume you are definitely not eligible for a VA loan in these cases until you have spoken with a loan officer or VA loan representative--apply for VA loan eligibility and proceed from there. You may be surprised at what you learn.