Must ReadCan An Ex Military Spouse Get A Va Loan

Can An Ex Military Spouse Get A Va Loan


What The Law Says About Divorce And Va Benefits

VA loans for surviving spouses

When we talk about VA benefits, what is most often at issue is VA disability compensation. Under state law, only marital assets are subject to division at divorce. Federal law is very clear that VA disability benefits are not a marital asset. That legal guidance is found in the Uniformed Services Former Spouses Protection Act , which exempts VA disability benefits from being considered marital property.

VA disability benefits are intended to compensate the veteran for his or her diminished earning capacity as a result of the disability. But while they are intended to help a disabled veteran, and while the benefits themselves are not property to be divided in divorce, that doesnt mean they are not relevant to the divorce.

VA benefits can be considered a source of income to the veteran. That means that they can be considered in calculations for alimony or child support. A 1987 U.S. Supreme Court case, Rose v. Rose, a veteran refused to make a child support payment, arguing that his VA disability benefit belonged to him alone.

The Supreme Court disagreed. It observed that while there is specific compensation available for the children of disabled veterans, the amount is so small that it does not make sense to conclude that Congress included that compensation to be all that the children of disabled veterans are entitled to. The Court concluded that one of the purposes of VA disability benefits was to enable the veteran to support his or her family.

Can I Get A Coe

You may be able to get a COE if youre the spouse of a Veteran, and at least one of the descriptions below is true for them.

At least one of these must be true. The Veteran:

  • Is missing in action, or
  • Is a prisoner of war , or
  • Died while in service or from a service-connected disability and you didnt remarry, or
  • Died while in service or from a service-connected disability and you didnt remarry before you were 57 years old or before December 16, 2003, or
  • Had been totally disabled and then died, but their disability may not have been the cause of death

Note: A surviving spouse who remarried before December 16, 2003, and on or after their 57th birthday, must have applied no later than December 15, 2004, to establish home loan eligibility. Well have to deny applications we received after December 15, 2004, from surviving spouses who remarried before December 16, 2003.

Finding Assumable Va Loans

There are several ways for home buyers to find an assumable VA loan.

Believe it or not, print media is still alive and well. Some home sellers advertise their assumable home for sale in the newspaper, or in a local real estate publication.

There are a number of online resources for finding assumable mortgage loans.

Websites like and give homeowners a way to showcase their properties to home buyers looking to assume a loan.

With the help of the Multiple Listing Service , real estate agents remain a great resource for home buyers.

This applies to home buyers specifically searching for assumable VA loans as well.

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Va Home Loan Rules For Va Loan Eligibility

The VA lenders handbook, VA Pamphlet 26-7, discusses who is eligible to apply for a VA mortgage, refinance loan, construction loan, etc. The VA loan rulebook makes it clear that the VA loan benefit is specifically tied to the veteran. This is an important detail to remember when considering divorce issues between military and non-military spouses.

That does NOT mean that spouses cannot be homeowners, co-borrowers or co-signers on a VA mortgage. VA loan rules permit a legally married couple where one spouse is not a military member.

The ability to successfully apply for a VA home loan depends on the legal marriage relationship in the following ways:

  • The veteran and the non-military spouse can apply for a VA loan together with full VA entitlement.
  • The veteran and a military spouse may apply for a VA loan and use VA loan benefits from both military members.
  • The veteran and a military spouse may apply for a VA loan using only one military members VA loan benefits.
  • Certain qualifying surviving spouses of military members who died as a result of military service may apply for a VA home loan. This may also apply to spouses of those declared Missing in Action or who are declared Prisoners of War .
  • The veteran and any non-qualifying military member who is not a legal spouse can apply for a VA mortgage together, but the VA will guarantee only the military members portion of the mortgage.
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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.

Qualifying IncomeMore often than not, youll find that with most military couples, one partner is a service member while the other is a civilian. Sometimes, these couples assume that the civilians income or financial standing could be a problem or not count toward qualifying for a VA loan. That couldnt be further from the truth. In fact, the civilian spouses income could actually help! If the civilians income is substantial, it could potentially help the service member qualify for a larger loan.

The Department of Veterans Affairs allows spouses to cosign for loans. In this case, you could use the civilian spouses income with the military spouses eligibility for the VA loan. However, its 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.

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You Can Shop For The Best Va Loan Rates

VA loans are neither originated nor funded by the VA. They are not direct loans from the government. Furthermore, mortgage rates for VA loans are not set by the VA itself.

Instead, VA loans are offered by U.S. banks, savings-and-loans institutions, credit unions, and mortgage lenders each of which sets its own VA loan rates and fees.

This means you can shop around and compare loan offers and still choose the VA loan that works best for your budget.

Planning For Disability Pay

Military spouses do have some protections and/or remedies for these types of reductions to retired pay.

First, military spouses may enter into agreements to help avoid these results. Divorcing couples often enter into “separation agreements” or “property settlement agreements” , which are written contracts that resolve divorce-related issues . These agreements may include a provision that states if the service member waives any retired pay for disability pay, or is placed on the disability retired list, the service member would make a monthly payment to the non-military spouse in an amount that makes up for the lost retired pay.

Second, if the military spouse refuses to enter in such an agreement, the non-military spouse could ask the divorce court to retain its jurisdiction to order the military member to pay spousal support in the future, or to modify an existing alimony order based on any change in the parties’ circumstances. If the military retired pay is reduced as a result of the receipt of disability pay, the non-military spouse may ask the court to “make up the difference” by ordering the military member to pay spousal support in the amount of retired pay that’s been lost.

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What Are Todays Va Mortgage Rates

VA home loan rates today are low, much lower than those of conventional loans. This is why these mortgages are a favorite among the military community.

Get a VA loan rate quote, which does not come with any obligation, but does come with your live credit scores. You dont need to disclose your social security number to get started, and requesting a quote takes just minutes.

Va Residual Income Rules

Military Spouse Monday – Can I Refi My Conventional Loan With A VA Loan?

VA underwriters perform additional calculations that can affect your mortgage approval.

Factoring in your estimated monthly utilities, your estimated taxes on income, and the area of the country in which you live, the VA arrives at a figure which represents your true costs of living.

It then subtracts that figure from your income to find your residual income .

Think of the residual income calculation as a real-world simulation of your living expenses.

It is the VAs best effort to ensure that military families have a stress-free homeownership experience.

Here is an example of how residual income works, assuming a family of four which is purchasing a 2,000 square-foot home on a $5,000 monthly income.

  • Future house payment, plus other debt payments: $2,500
  • Monthly estimated income taxes: $1,000
  • Monthly estimated utilities at $0.14 per square foot: $280

This leaves a residual income calculation of $1,220.

Now, compare that residual income to VA residual income requirements for a family of four:

  • Northeast Region: $1,025
  • South Region: $1,003
  • West Region: $1,117

The borrower in our example exceeds VAs residual income standards in all parts of the country.

Therefore, despite the borrowers debt-to-income ratio of 50%, the borrower could get approved for a VA loan.

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Va Loan Options For Military Couples

For married couples looking for a VA home loan, when both are in the military, there are a variety of options when it comes to using VA insured loan benefits.

Option 1: A common choice is for one spouse to use all of his or her VA loan entitlement for the mortgage, allowing the other spouse to reserve entitlement for later use. A spouse would only be financially obligated on the VA loan if he or she co-signed or co-borrowed on the mortgage or in cases where the loan originates in a community property state.

Option 2: One spouse could use his or her remaining VA loan entitlement with the other spouses, providing the majority of the VA loan entitlement. This would apply in situations where one partner in a mil-to-mil couple previously owned a home purchased with a VA mortgage and no longer has 100% entitlement but does have some VA loan entitlement left over to use for the new mortgage.

Option 3: The mil-to-mil couple could split their entitlement evenly for a joint VA home loan. In this case, both spouses carry financial obligation for their half of the mortgage. The loan agreement would feature equal amounts of VA loan entitlement from each party named on the mortgage.

Military couples seeking a VA loan have a unique opportunity to acquire a loan with very favorable terms. Talk with your lender to evaluate these options and to make sure your entitlement is used effectively.

Military Retirement After Divorce

The military offers its members a defined benefit pension, under which a member who serves at least 20 years will receive at retirement a monthly payment based upon the members years of service, basic pay, and a retirement multiplier.

The multiplier has traditionally been 2.5% x years of service , and that is still true for legacy retirement plans. However, for new members, as well as existing members who selected the blended retirement, the multiplier is now 2% x years of service, as there is also an enhanced Thrift Savings Plan available.

With a value in the hundreds of thousands of dollars, the military retirement is often the most valuable asset the spouses have accumulated during their marriage. It is a marital asset, subject to division at the time of the divorce or legal separation regardless of the length of the marriage – even if only a year or two! Note two caveats:

  • The payments will not commence until the service member actually retires from the military and receives retirement.
  • If the spouses have at least 10 years of marriage overlapping the military service, DFAS will pay the former spouses share directly to the former spouse. The retirement is still an asset that can be divided with fewer than 10 years of overlap, but in such cases the retiree will be required to send payment each month.
  • For a complete discussion of issues and formula for dividing a military retirement, see the Military Retirement section of the Military Divorce Guide.

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    The Truth Of The Matter

    If youre married to someone who serves in our armed forces, you know that its not an easy job. During deployments, you have to balance all of your normal tasks along with those that your partner is usually in charge of. You may be asked to move frequently, which can disrupt your line of work, your family, and your friendships. But just as your spouse is sacrificing in the name of our country, so are you! So you may be wondering if there are any student loan forgiveness programs for military spouses.

    The short answer is no, there are not any programs dedicated to student loan forgiveness for military spouses. However, there are a variety of options you can pursue to help with your outstanding student loans.

    Being a military spouse offers unique challenges, and you shouldnt have to worry about student loan debt on top of everything else being thrown your way.

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    Dependency And Indemnity Compensation

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    This compensation is an important part of an eligible survivors long-range financial planning. It is paid to eligible survivors of active-duty service members and survivors of those veterans whose deaths are determined by the VA to be service-related.

    • It is a flat monthly payment, independent of the pay grade of the veteran. This payment is adjusted annually for cost-of-living increases and is non-taxable.
    • To help ease a survivors transition, the VA also adds a transitional benefit of $270 to the surviving spouses monthly DIC if there are children under age 18.
    • The amount is based on a family unit, not individual children.
    • It is paid for two years from the date that entitlement to DIC commences, but is discontinued when the child reaches age 18, or under the age of 23 if attending school.
    • This benefit is payable for the life of the spouse, provided the spouse does not remarry before the age of 57. However, should a remarriage end, DIC benefits can be reinstated.

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    Military Retired Pay The Survivor Benefit Plan And Divorce

    It makes sense that when a military retiree dies, their retirement pay ends. Unfortunately, a surviving spouse may still need those benefits to make ends meet. The good news is that there is an option for military retirees to protect a survivor from the loss of those benefits: the Survivor Benefit Plan, or SBP. In addition to protecting survivors from the military retirees untimely death, the SBP can also protect against inflation or the survivor outliving the benefits. How can an ex-spouse benefit from the SBP?

    A military retiree who chooses to enroll in the SBP can choose varying amounts of coverage the more coverage, the higher the premium. The maximum SBP benefit upon the retired service members death is 55% of the designated base amount of their retirement pay. Upon retirement, the retiree can choose the base amount to be covered by the SBP. The designated base amount may not be greater than the full gross retired pay, nor may it be less than $300 per month.

    The retiree may agree as part of a divorce settlement to designate a former spouse to receive coverage under the SBP. One important note: the retiree may only elect coverage for one spouse or former spouse. That means that a subsequent spouse could be left without coverage under the SBP. If a former spouse has been elected as beneficiary, the current spouse must be notified.

    How To Assume A Va Loan

    There are currently two ways to assume a VA loan.

  • The new buyer is a qualified veteran who substitutes his or her VA eligibility for the eligibility of the seller
  • The new home buyer qualifies through VA standards for the mortgage payment. This is the safest method for the seller as it allows the loan to be assumed knowing that the new buyer is responsible for the loan, and the seller is no longer responsible for the loan
  • The lender and/or the VA needs to approve a loan assumption.

    Loans serviced by a lender with automatic authority may process assumptions without sending them to a VA Regional Loan Center.

    For lenders without automatic authority, the loan must be sent to the appropriate VA Regional Loan Center for approval. This loan process will typically take several weeks.

    When VA loans are assumed, its the servicers responsibility to make sure the homeowner who assumes the property meets both VA and lender requirements.

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    Surviving Spouses May Qualify For Va Loan Benefits

    A military service casualty impacts surviving spouses and their families in many ways. For surviving spouses, the VA provides many benefits including the federal home loan guarantee. A surviving military spouse may be eligible for a VA-guaranteed mortgage if:

    • He or she survived a veteran who died in service or from a service-connected injury and has not remarried
    • He or she survived a service person missing in action or a prisoner of war

    Qualifying surviving spouses can use their VA home loan benefits over and over again as long as they have ample entitlement. Generally, full entitlement will provide a VA-eligible borrower with the government backing on a loan of up to $417,000 .

    The home loan benefits for surviving spouses provided by the VA are much like those received by veterans and active duty military personnel although there are notable differences.

    • Qualified surviving spouses are exempt from the VA funding fee which is between .5 and 3.3%
    • A spouse who obtained a joint VA mortgage with a veteran prior to the death, regardless of whether the death was duty related, may be eligible for a VA Streamline refinance

    When a surviving spouse repays a VA mortgage in full and disposes of the real estate property, he or she may have entitlement restored and use the program again and again . Restoration of entitlement can be obtained by submitting VA Form 26-1880 to the Department of Veterans Affairs.

    The advantages of VA loans for surviving spouses include:

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