US military veterans sometimes struggle with qualifying to buy a home when they are no longer servicemembers. However, help does exist. The US Department of Veterans’ Affairs (VA) offers liberal qualifying rules for members of the active military and veterans.


VA Loan Benefits Help Military Veterans Buy Homes

VA loans offer veterans numerous advantages to those who want to become homeowners. These benefits include the following advantages.

·       No Down Payment Needed --

Saving up for a down payment is challenging for military, while they’re active or separated from their branch. VA mortgages allow their qualified borrowers to finance up to 100 percent of the value of the home they want to purchase.

VA borrowers can, of course put down more, typically 5 or 10 percent, if they want to lower their monthly payment. However, in most cases, if borrowers want 100 percent financing, they’ll be able to get it.

·       No Private Mortgage Insurance Payments --

Most conventional mortgage lenders require borrowers to pay for private mortgage insurance (PMI) if their loan-to-value (LTV) is over 80 percent of a home’s value—not so with VA home loans.  Why? The federal government backs all VA home loans and takes on the risk of default themselves, transferring the risk from borrowers to the government. This is a significant benefit since PMI can increase your monthly payment by many dollars, the amount of which is dependent on the size of your mortgage loan.

·       Lower than Market Interest Rates --

Since the government guarantees VA mortgages, approved lenders sometimes lower market interest rates by ½ to 1 percent for these borrowers, even lowering rates by ½ of 1 percent can save these homeowners purchasing a modest home ($150,000 range) almost $15,000 in interest over the term of the loan.

·       Active-Duty Military Persons Can Count Basic Housing Allowance (BHAs) as Income --

Active-duty military personnel who receive a BHA (most of them), can ask lenders to count this housing allowance as monthly income for qualification for application approval purposes. Most lenders are willing to do this, as BHAs only make their loans more secure.

Since this is real money, the BHA can help pay some or all of the monthly payment for the VA home loan. The amount of the BHA depends on local housing costs and your rank, so it can be a major advantage to assist you in effectively lowering your monthly payment.

·       No Prepayment Penalties --

Paying off your mortgage before maturity may appear only a daunting dream for you, but the more common way this happens is when you sell your home to move to another. Since most conventional mortgages require prepayment penalties, which can be very expensive, VA home loans deliver a significant advantage to homeowners.


Even if you don’t have a crazy aunt that leaves you $300,000 in her will, you’ll benefit from freedom from worry about a costly prepayment penalty. Many borrowers have been “blindsided” by a prepayment penalty by simply refinancing their home, which also pays off your current mortgage early.