The VA Loan Process - Determining Eligibility

Part 2: Determining Eligibility

In Part 1 of The VA Loan Process we learned a little of the origins and advantages of Veterans Administration home loans. In this article we’ll explore just who VA loans are for and what their eligibility requirements entail.

The mission of the VA Home Loan Guaranty Program is to help veterans and active-duty service members to purchase and retain homes in recognition of their service to the country. National Guard and Military Reserve personnel are eligible to apply for the loans as well. However, other individuals may also be granted eligibility. For example, certain U.S. citizens who served in the armed forces of countries which were allied with the United States during World War II may be eligible. Members of various organizations, such as Public Health officers, cadets of the U.S. Military Academies including the Coast Guard Academy, merchant seamen with World War II service and others may also be eligible to apply.

Active-duty veterans and current service members must have served a minimum of 90 days if in wartime or 181 consecutive days in peacetime and, if discharged, must have been discharged under other than dishonorable conditions. In other words, the discharge granted must have been an honorable or, at minimum, a general discharge. Any discharges that are other than honorable are likely to be investigated by the VA to ensure that the veteran’s service was indeed meritorious. If the minimum number of days was not served by the member, eligibility could still be granted if the member’s discharge was due to a service-related disability.

The VA defines wartime and peacetime service with the following dates. For wartime service: World War II - 9/16/1940 to 7/25/1947; Korea - 6/27/1950 to 01/31/1955; Vietnam - 8/5/1964 to 5/7/1975. Peacetime service dates areas follows: from 7/26/1947 to 6/26/1950; from 2/1/1955 to 8/4/1964; and from 5/8/1975 to 9/7/1980 for enlisted members, or 5/8/1975 to 10/16/1981 for commissioned officers.

If a member’s tour of duty began after 9/7/1980 (or 10/16/1981 for commissioned officers), then 24 months of continuous active-duty service must have been completed for eligibility, or the full period (at least 181 days) for which the member was called to active duty. Eligibility may also be granted to members who were discharged under hardship per authority of 10 USC 1173 or early-out by authority of 10 USC 1171, as long as a minimum of 181 days of active-duty service had been completed. Service members released from active duty due to involuntary force reductions, medical conditions, or for the convenience of the government may also be declared eligible, as long as any discharges were under other than dishonorable conditions.

For Gulf War service members (8/2/1990 to present), 24 months of continuous active-duty service must have been completed to gain eligibility, or the full period (at least 90 days) for which the member was called to active duty. These members may also be granted eligibility if they were discharged under 10 USC 1171 or 10 USC 1173 with at least 90 days of active duty, or discharged before 90 days of active duty were completed due to a service-related disability.

Current active-duty members are eligible to apply after 181 days of continuous service (90 days if during the Gulf War), unless they were discharged from a previous term in which they qualified.

Guard and Reserve personnel who are not eligible from any previous tours of service must have completed a total of six years in an active unit and attended the required weekend drills and two-week active duty for training. These conditions apply regardless of whether the member has been discharged, placed on the retirement list, transferred to Standby Reserve, or continues to serve. Again, eligibility may be granted for less than six years of service if the member was discharged for a service-related disability.

Unmarried spouses of veterans who died while in service or from a service-related disability, or spouses of members who are listed as missing in action (MIA) or prisoners of war (POW), may also be eligible for VA home loans. Additional conditions apply for remarried spouses; be sure to contact the VA for further details.

In Part 3 of this series, we’ll see what’s necessary in order to qualify for a VA home loan.

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