VA Home Loan Benefits for Surviving Spouses
Helen was referred to me to get a home loan. As we were going through the consulting part of our talk, I found out that Helen did not have much money to put down on a home. We talked more, and I found that her husband had served in World War II and had been a disabled Veteran.
Helen was happy to know that VA had benefits that would help her purchase a home with little or no money down: the little-known VA home loan surviving spouse benefit.
During my 35 years of service to my country, and the 22 years as a Mortgage Advisor, I have had the opportunity to help military servicemen and women own their own homes. Part of this has been helping surviving spouses to take advantage of a benefit awarded to them.
Many spouses of veterans can qualify for a VA home loan. The spouse generally has to be un-remarried and the veteran has to have died as a result of service or service-connected causes.
But there are other ways a surviving spouse can be eligible:
- The spouse who remarries on or after attaining age 57 and on or after December 16, 2003, may be eligible.
- The spouse of an active duty member who is listed as missing in action (MIA) or a prisoner of war (POW) for at least 90 days may also be eligible.
Surviving spouses of veterans who died from non-service-connected causes may qualify under these circumstances:
- The veteran was rated totally disabled for 10 years or more immediately preceding death
- The veteran was rated totally disabled for not less than five years from the date of discharge, or released from active duty, to the date of death.
- The veteran was a former prisoner of war and died after September 30, 1999, and was rated totally disabled for not more than one year immediately preceding death.
As with a regular VA loan, the VA only guarantees the loan in the event of foreclosure from a private-sector lender. Because the VA guarantees the loan, private lenders are willing to approve the loan with zero down payment, assuming the borrower meets all eligibility and qualification guidelines.
VA home loans for surviving spouses work the same way as a VA loan for active duty service members and veterans:
- You have to have a credit score of at least 620 with most lenders
- You have to be credit-worthy with no derogatory credit for at least a 1 year period
- You must have the capacity to make the payments.
The amount you can purchase will depend on the amount of entitlement you have. The full entitlement is $36,000 and allows you to purchase a home of up to $417,000 purchase price with no money down, assuming you qualify for the payment.
Your income will determine your debt-to-income ratio, a calculation comparing your gross income to your proposed monthly expenses after you buy the home.
Surviving spouses are exempt from the VA funding fee. To prove your exempt status, your VA loan officer will obtain your Certificate of Eligibility (COE) and verify that Entitlement Code 06 appears on it.
VA loan interest rates are normally a little lower than conventional loan rates. And, your VA loan will allow you to not only purchase a regular home, but you can also use your loan to purchase a manufactured home or condominium in some cases.
With my 22 years of mortgage experience, I am sure that I can help you work through the ins and outs to make sure you are qualified. So if you are a surviving spouse like Helen; who enjoys her new house to this day; you can give me a call to start the process. I look forward to working with you to live your dream of owning a new home.Check your VA home buying eligibility here (Sep 25th, 2023)