However, many service members have questions about including their civilian spouses in the process of getting their VA loan. Here are the top three things that all spouses – and service members – should know about VA loan benefits.
More often than not, you’ll find that with most military couples, one partner is a service member while the other is a civilian. Sometimes, these couples assume that the civilian’s income or financial standing could be a problem or not count toward qualifying for a VA loan. That couldn’t be further from the truth. In fact, the civilian spouse’s income could actually help! If the civilian’s income is substantial, it could potentially help the service member qualify for a larger loan.
The Department of Veterans Affairs (VA) allows spouses to cosign for loans. In this case, you could use the civilian spouse’s income with the military spouse’s eligibility for the VA loan. However, it’s important to remember that the VA loan is no different from any other loan when it comes to your debt-to-income ratio and credit history. If your civilian spouse makes more but has a poor credit rating, that could hurt your chances of qualifying for a loan, regardless of your military standing.
Surviving Spouse Eligibility
Prior to the signing of the Honoring America’s Veterans and Caring for Camp Lejeune Families Act in 2012, only spouses of those who had died of military-related causes were allowed to apply for VA loan benefits. Today, those benefits have been extended for surviving spouses.
These kinds of surviving spouses can apply for a VA loan:
- A non-remarried surviving spouse of a veteran or service member who died in service or from a service-related disability
- A spouse of a service member who was missing in action or a prisoner of war for last least 90 days
- A surviving spouse of a veteran who was rated totally disabled and was eligible for disability compensation at the time of death from any cause
This is possibly the most complex issue when it comes to civilian spouses and VA loans. If you are an ex-spouse of a service member, you are not eligible for a new VA loan in the same way a surviving spouse would be. That’s pretty straightforward.
It can get complicated when divorce is involved after you have a VA loan together. The VA has very strict occupancy requirements on who can and cannot live in a home purchased using a VA loan. However, if the civilian spouse is a cosigner, they are eligible to remain in the home without the service member living there. The issue arises when it comes to entitlement. The service member cannot restore their entitlement unless their ex-spouse refinances and/or pays off the VA loan in full.
It’s important to keep in mind, whether you’re a current spouse, surviving spouse or ex-spouse, that every situation is different and complex. Be sure to talk to a Home Loan Expert who specializes in VA loans so they can walk you through your unique situation.
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