Obtain a VA loan when deploying
At any given time, a multitude of US military personnel are stationed or deployed overseas. While away from home, it is possible for servicemen on active duty overseas to secure a mortgage – a VA loan or whatever – and purchase a home, thanks to remote capabilities.
Should You Get a VA Loan?
Military service offers many benefits, and one is the VA mortgage program. A VA loan allows those with honorable military service, or eligible surviving spouses, to finance the purchase of a home or refinance an existing mortgage on attractive terms. These include:
- No minimum credit – Unlike other types of mortgages, VA loans do not have a minimum credit rating requirement from the US Department of Veterans Affairs to meet, which allows mortgage lenders some flexibility when qualifying a borrower .
- No down payment – You don’t need to make a down payment to qualify for a VA loan. Mortgage lenders generally prefer borrowers to make a 20% down payment on a home, but since this is not financially practical for many, there are insured mortgage programs that allow a much lower down payment, such as FHA loans. The VA approach is different: borrowers don’t need anything up front.
- No mortgage insurance – Unlike other low down payment programs that require mortgage insurance if the borrower puts in less than 20 percent, there are no mortgage insurance premiums for a VA loan. There is, however, an upfront finance charge, the cost of which depends on how much you put in (if you’re making a down payment) and how many times you’ve used the VA loan program.
Even if you qualify for a conventional mortgage or the like, a VA loan can help you buy a home with minimal upfront cost, so it’s worth considering an option if you, a family member, or a family member of your household are active. duty or a veteran.
If you are currently on active duty, be aware that there is a minimum service requirement for a VA loan: 90 consecutive days. If you meet this minimum, then you can apply for a Certificate of Eligibility (COE), which you need to get the loan. To do this on active duty, you need a signed service statement from your commanding officer, warrant officer or personnel officer. Once you have this service declaration, you can request your COE through the eBenefits portal.
Why buy a house during deployment
Part of military service is the possibility of having to travel as needed, often on short notice. If you are currently renting out or are already a homeowner and need more space, you can still buy a home even when deploying. The benefits of buying a home include:
- Low mortgage rates
- No lease (if you are a tenant)
- Stability for family members, especially children
What to consider when buying a home abroad
If you (or a family member) are deployed and are looking for a home, you will not have the option to search for property in person. A spouse, other family member, or real estate agent can help, and you might even be able to take a virtual tour or a 3D virtual tour yourself.
Beyond finding a home, you’ll also need help managing the mortgage loan process. Keep these three points in mind:
1. Granting of a power of attorney
While you are deployed, you can designate a person or entity to represent your interests in purchasing a home with a power of attorney (POA). To grant a power of attorney, you will need the help of a lawyer, legal clinic, or Judge Advocate General (JAG). Each of these professionals can also recommend additional legal steps to take, depending on your situation.
In many cases, the military will grant a power of attorney to a spouse so that the spouse can perform tasks such as signing documents on their behalf. When considering who to appoint, ask these questions:
- What powers will you give the person?
- Do you want to set limits?
- How long will the POA last?
- Can you revoke the POA at any time?
- Can you name a backup?
You will also want to confirm with the closing or title agent what POA documentation they will need to close your mortgage.
2. Meet occupancy requirements
A condition of VA financing is that the borrower must live in the house, which can be a problem if you are deployed.
Typically, borrowers have a “reasonable time” to move in after their VA loan is closed. “Reasonable” is defined as 60 days, but can be longer if you can certify that you will be living in the house on a specific date within 12 months of closing. If you are on active duty and cannot meet the “reasonable” standard, a spouse or dependent child may live in the house to meet this occupancy requirement.
However, if you are deployed, you already meet the occupancy requirements. As stated by VA:
“Single or married service members, when deployed from their permanent duty station, are considered to have temporary duty status and able to meet the conditions of employment. This is true regardless of whether or not a spouse will be available to occupy the property prior to the veteran’s return from deployment.
3. Verification of military status
It is important to verify your military status before looking for a home or applying for a mortgage.
VA loans are limited to those with qualifying military service. Under the Military Civilian Relief Act (SCRA), military personnel have access to benefits such as protection against seizure. For this reason, when considering a VA loan application, mortgage lenders should verify the borrower’s active service and other service-related information.
The Defense Workforce Data Center (DMDC) maintains a military service verification website. There are also commercial providers who provide this information to lenders. It is best to consult your lender for specific details regarding what you need.
At the end of the line
VA loans have unique benefits that can make buying a home more affordable, and you can still get one while you (or a family member) are deployed, as long as your service qualifies you. Appointing a power of attorney can help you manage the purchase of the home on your behalf while you are away, and your lender can advise you on the documents you need to verify your military status.