Can I use the VA Loan if I am Active Duty?

Of course, you can.

We sometimes have folks a little confused when they’re active duty – “Hey, I’m not a veteran, can I use the VA loan?”

Because it’s technically administered by the Veterans Affairs, right?

So a lot of folks assume, “Oh, I gotta be a veteran to use it.”

No, you can use it while you’re active duty, most definitely.

Now, be aware there are some other requirements, of course, to use a VA loan if you’re active duty.

Like, we need 90 days of active duty service, when we’re at time of war, for example, and we get that from pulling your Certificate of Eligibility, otherwise known as Coe.

Now, we can pull that direct from the VA. We do enough business with the VA that we can pull that for you.

There are some requirements that you need to meet to use VA eligibility, and we can help you with that. But for active duty members, if you’ve generally been active duty for at least 90 days or longer, you’re generally in good shape. There are some nuances when you’re active duty that you gotta be aware of with a VA loan.

Number one is, “Hey, what’s the cost of using the VA loan while I’m active duty?”

When you work with veterans, folks who are out of the military, they oftentimes might have VA disability compensation, which allows us to get a waiver for one major fee with a VA loan, that’s the VA funding fee.

We have some other fees, but the VA funding fee is a fee charged directly from the VA.

Every lender has the same fees applied down to the borrower, and essentially, it’s to be able to use a VA loan – to have that more competitive interest rate, to be able to put less money down all the way to 0% down if you choose and not get private mortgage insurance or penalized with a monthly payment, and lastly, the ability to streamline refinances – which are just incredible to have those benefits the VA does, of VA funding fee to those using it who don’t have VA disability compensation.

Now, pretty much all of our active duty members that we work for – because that’s our prime demographic – do not have VA disability compensation or aren’t necessarily married to someone who might have VA disability compensation to work to get that waiver.

So what is that VA funding fee that you gotta be aware of when you’re active duty?

If you’re using the VA loan for your first time and you’re putting 0% down, that funding fee is 2.15% as of today.

Now, if you put just 5% down, they cut that fee back to 1.5%.

5% to 10% down pulls it to 1.25%, pretty powerful.

Now, when you go to use your VA loan for your future uses, they bump that funding fee up to 3.3% if you’re putting 0% down.

And if you’re still going to put 5% down, they pull it back to 1.5% again.

So, we’re actually big fans of later uses with the VA loan, getting where you can put some money down because that actually saves you a lot on that VA funding fee.

Now, the VA funding fee is generally rolled right into the loan. So, it’s technically not a fee that you’re paying upfront to the VA.

You’re paying that through the mortgage, it’s rolled into the cost. So we have another video on VA closing costs, it’s one of the major closing costs that is rolled into the loan if it applies to you. But know that that generally has to apply if you’re active duty.

Now, as well, when you’re active duty, you want to know, working with the VA loan, “Hey, how can I qualify with it?”

Because sometimes you’re PCSing from overseas, right?

Or you’re PCSing across states and moving from all different kinds of areas. How does that apply with the VA loan?

Well, great thing with a VA loan is it’s very flexible for members.

It’s very flexible on credit scores.

So, if you happen to have some dings or nicks from all the transitions, I understand that. Well, if that happened, then you are generally still going to be able to get a shot at getting a VA loan, or I should say it’s more flexible than other loan types, which is a big plus as well.

The VA loan takes in consideration your future destination. So, your Basic Allowance for Housing (BAH) is going to change, right, when you’re moving to your next location. VA loans understand, “Hey, we’re going to use that future income.” Other loan types generally will as well, but VA loan, we’re very flexible with being able to purchase that next home.

We even are allowed to essentially close on that home 60 days before you get there for, either yourself as long as yourself, or say your spouse, or someone in your family is moving into that home. It’s a flexible loan that works well for active duty military families.

So yes, you certainly can use it, and in fact, that’s our specialty.

So, I’m Evan Kaufman, VA loan originator. I work specifically with folks, mainly active duty, that are utilizing the VA loan – or conventional loan if they’ve used up all their VA loan entitlement, which again we touch on in some other videos.

Most of the time, the VA loan is generally going to be the best option, but there are some scenarios where the VA loan can get edged out by other loan types. But just know that unless you’re going to be bringing a lot of money down, have a super high credit score, and are subject to that funding fee, generally the VA loan is still your best bet to use when purchasing a new home.

So again, if you’re active duty, go ahead, take a look at using the VA loan. I hope to have the chance to work for you on it. If not, still hope this helped you go out there and win a home with the VA loan. Take care.