Qualifying for a VA Loan When You’re Retired


Thomas Short
Military VA Loan contributor

You’re a veteran who decided to retire. Now you can enjoy the time off and move wherever you’d like.

However, you don’t have the same type of income, and you’re worried you might not be qualified to buy a house.

Retirees are not only eligible to purchase homes, but they get some additional benefits they didn’t have when they were still employed. They might not be able to afford a home quite as large as they could before retiring, but there are still plenty of homes that are affordable for retirees.

Check your VA loan eligibility.

Buying a home when you’re retired is easier when you have access to VA products. These give home buyers additional flexibility, particularly when it comes to financial matters.

To figure out if you’re eligible to purchase a home as a retiree, you’ll need to figure out your income situation and VA eligibility.

Checking your VA eligibility

If you’re retired, you don’t have to use a VA loan to buy a home. There are plenty of products available, some of which are easier to qualify for.

Veterans may want to stick with VA products, though. On top of not requiring a downpayment, VA loans have lower mortgage rates and credit score requirements. This means more flexibility for home buyers — something that’s important when money is a factor.

Most veterans are going to be eligible for the VA loan, but it depends on how long and when they served in the armed forces.

If you’re curious about your eligibility, you can learn more here.

Check your VA loan eligibility.

Determining your income

For retirees, lenders will want to know they can afford to live in the home they purchase. Savings are an excellent start, but income goes a long way in qualifying.

Luckily for retirees, there are several ways you can include income even though you are no longer working.

Pension/Retirement income

One of the most obvious for veterans who are retired, your pension can be included in your income. Any other jobs that had some type of retirement income can be included as well. Savings from your 401k or IRA that started paying out work here as well.

If you’ve started collecting, Social Security can also be included in income.

Household income

A newer trend is seeing children move back in with their parents. If someone is living under your roof and working, you can include their income in the household income. Be careful with this, though – you’ll probably need to prove that they plan on living with your for at least another few years.

Rental income

Some people own a building with multiple units, or they may be renting out a room in their home. Others may have properties elsewhere that are rented out. Any income collected through rentals is considered verifiable by the VA, so you can include it in your application.

Disability

Some veterans receive disability checks from injuries sustained during their service. Others had injuries after their service that now restricts their ability to work. Disability income is a verifiable source, according to the VA.

Other sources of income

One of the nicest parts of the VA loan is that many of their guidelines are discretionary, meaning the rules can change on a case-by-case basis. If you have a different source of income that the VA doesn’t explicitly approve, there’s still a chance that your lender will allow it.

Click to check your VA loan eligibility.

Other requirements

Retirees who have enough money to buy a home still have to meet some of the VA’s requirements. To be eligible for a loan, retirees should expect to:

  • Meet occupancy requirements
  • Pay closing costs
  • Have a strong enough credit score
  • Meet debt to income requirements

These are items all VA loan users will have to cover, not just retired veterans. So, aside from proving income, there really isn’t much more to buying a home when you’re retired than when you’re working.

Click to check today’s VA rates.