The VA loan program, popular with members of the military and veterans because they can buy a home without a down payment or mortgage insurance, was broadened by legislation signed in January to make it easier for members of the National Guard to qualify for the loans.

In addition, the VA loan program doesn’t have borrowing limits, which means the program can be beneficial in high-cost housing markets.

Before January, National Guard troops were only eligible after completing one of the following: six years of honorable service, 90 days of getting called up during wartime or 181 days of non-wartime because of a service-connected injury, wrote Louise Thaxton, branch manager at Fairway Independent Mortgage Corporation in Leesville, La., in an email.

“The new law authorizes VA loan benefit access for those service members and veterans mobilized to perform full-time National Guard duty for not less than 90 cumulative days, including at least 30 days consecutively,” Thaxton wrote. “This expanded eligibility is being applied retroactively. Many National Guard members logged qualifying service in 2020 as part of the nationwide covid-19 response and are now eligible.”

The new rules basically accelerate the timeline of VA loan eligibility for National Guard members who’ve performed full-time duty, wrote Chris Birk in an email. Birk is vice president of mortgage insight and director of education for Veterans United Home Loans.

“National Guard members have had access to the VA loan benefit since 1992,” Birk wrote. “In most cases, eligibility kicks in after six years of service. The government also grants eligibility to Guard members called to active-duty service under Title 10 of the U.S. Code, provided they serve at least 90 consecutive days.”

The Guard is unique as the only component of the military with dual state and federal missions, Birk wrote. “State missions typically occur under the order of a governor, with Guard members paid by the state through state active-duty orders,” he wrote. “Because they are strictly state missions, they don’t count toward federal GI Bill benefits, including the home loan program.”

During some disasters, such as the covid-19 pandemic and Hurricane Katrina, National Guard troops support state responses while on federal Title 32 orders. Historically, these orders didn’t grant early access to the VA loan benefit either, Birk wrote.

“This new legislation eliminates that gap,” he wrote. “Now, National Guard members mobilized under Title 32 orders can be eligible for a VA loan after serving 90 days of full-time duty, of which at least 30 days must have been consecutive.”

The National Guard Association of the United States estimates more than 50,000 Guard soldiers and airmen gained VA loan eligibility because of this legislative change. Many of those Guard members served on the front lines of the covid-19 pandemic.

VA loan overview

A VA Loan is a mortgage backed by the Department of Veterans Affairs. The VA does not make the loans; private lenders do, Thaxton wrote. Eligible borrowers can use a VA loan to purchase a property as their primary residence or refinance an existing mortgage.

Veterans have turned to their home loan benefit in record numbers since the Great Recession, according to Birk. VA backed a record 1.2 million loans in fiscal year 2020, he wrote.

Benefits of the VA loan program include:

· No down payment.

· No mortgage insurance.

· Flexible credit guidelines.

· Lowest average fixed rate on the market.

VA loans are available in the same kind of mortgage terms as conventional loans, although 30-year terms are the most common, according to Birk. There are fixed- and adjustable-rate options available. Lender offerings vary.

“The VA has loan limits, but these do not represent a cap on borrowing,” Birk wrote. “In most cases, veterans can borrow as much as they can afford without the need for a down payment, whether it’s $150,000 or $1.5 million. The limits come into play for veterans with diminished VA loan entitlement, either because they have an active VA loan and want to purchase again, or because they defaulted on a previous VA loan.”

But even then, the limits simply help determine how much a veteran can borrow without having to make a down payment, Birk wrote. “VA loans are arguably the most powerful loan option on the market,” Birk wrote.

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