Braenen Ross Military life is unpredictable. One day, you’re settled into your home, and the next, you’re receiving orders for deployment or a Permanent Change of Station (PCS). If you’re a homeowner with a VA loan, these sudden changes can raise serious questions about your mortgage and property. Understanding how your VA loan active duty status affects your homeownership is crucial for making informed decisions during these transitions.
Your VA Loan During Active Duty Changes
When you’re facing deployment or PCS orders, your VA loan doesn’t simply disappear or become invalid. The Department of Veterans Affairs designed these loans with military life in mind, recognizing that service members frequently relocate or deploy. Your VA loan while deployed remains active, and you’ll continue to be responsible for mortgage payments unless you make alternative arrangements.
The key is understanding your options and planning ahead. Whether you’re dealing with a six-month deployment or a three-year PCS, there are strategies to manage your VA loan effectively while maintaining your financial stability.
VA Loan PCS: Your Options When Relocating
Selling Your Home
When you receive PCS orders, selling your current home is often the most straightforward option. With a VA loan, you can sell your property just like any conventional mortgage holder. Once the sale closes and the loan is paid off, your VA loan entitlement is restored, allowing you to use it again for your next duty station or when you retire.
Renting Out Your Property
Many service members choose to keep their homes and rent them out during PCS moves. This approach offers several advantages:
- Rental Income: Monthly rent can cover your mortgage payments and potentially provide additional income
- Property Appreciation: Your home may increase in value while you’re away
- Future Housing Option: You can return to your property after retirement or future assignments
- Tax Benefits: Rental properties offer various tax deductions and advantages
However, becoming a landlord while on active duty requires careful consideration. You’ll need to manage tenant relations, property maintenance, and local regulations from potentially thousands of miles away.
VA Loan Assumption
Another option is allowing a qualified buyer to assume your VA loan. This means the new buyer takes over your mortgage payments and terms. VA loan assumption can be beneficial when:
- Interest rates have risen since you obtained your loan
- You want to avoid the costs associated with selling
- The buyer cannot qualify for their own mortgage at current rates
Managing Your VA Loan Deployment Challenges
Deployment presents unique challenges for VA loan holders. Unlike PCS moves, deployments are typically temporary, but they can last anywhere from several months to over a year. Here are your primary options:
Continue Making Payments
The most common approach is to continue making your regular mortgage payments while deployed. Many service members find this manageable because:
- Military pay often includes deployment bonuses and tax-free combat pay
- Living expenses are typically lower during deployment
- Automatic payment systems can handle transactions while you’re overseas
Rent Out Your Home Temporarily
If you’re married and your spouse won’t remain in the home, renting it out during deployment can provide extra income. This strategy works well for:
- Covering mortgage payments and maintenance costs
- Generating additional income for your family
- Keeping the property occupied and maintained
Family Occupation
If you have a spouse or family members who will remain in the home, they can continue living there and help maintain the property. This arrangement provides stability for your family while ensuring your home remains occupied and cared for.
VA Loan Relocation Protections and Benefits
The VA loan program includes several protections specifically designed for military families facing relocation:
Servicemembers Civil Relief Act (SCRA) Benefits
The SCRA provides crucial protections for active-duty service members, including:
- Interest Rate Reductions: Loans obtained before active duty may qualify for reduced interest rates
- Foreclosure Protection: Additional protections against foreclosure during active duty
- Legal Proceedings: Courts must stay certain legal proceedings when you’re deployed
Military Clause in Lease Agreements
When renting out your property, consider including military clauses that protect both you and your tenants in case of sudden military orders or changes in deployment schedules.
Financial Considerations and Planning
Budgeting for Dual Housing Costs
If you’re PCSing and can’t sell your home immediately, you may face dual housing costs. Budget for:
- Original mortgage payments
- New housing costs at your new duty station
- Property management fees (if applicable)
- Maintenance and repair costs for your rental property
Emergency Fund Importance
Maintaining an emergency fund becomes even more critical when you’re managing a VA loan during deployment or PCS. Unexpected repairs, vacancy periods, or other property-related expenses can arise when you’re not physically present to handle them quickly.
Frequently Asked Questions
Can I use my VA loan benefit again if I still have an active VA loan on a rental property?
Yes, but it depends on your available entitlement. The VA provides a basic entitlement of $36,000, and you may have additional entitlement available depending on your loan amount and local loan limits.
What happens if I can’t make my mortgage payments during deployment?
Contact your loan servicer immediately. You may qualify for forbearance, loan modification, or other assistance programs. The SCRA may also provide additional protections.
Do I need to notify the VA when I PCS or deploy?
You don’t need to notify the VA directly, but you should inform your loan servicer of your situation, especially if you’re having difficulty making payments or need to explore your options.
Can I refinance my VA loan while deployed?
Yes, VA Interest Rate Reduction Refinance Loans (IRRRLs) can often be completed remotely, making them accessible even during deployment.
Know Before You Go
Military life requires flexibility, and your VA loan is designed to work with your service commitments. Whether you’re facing deployment or PCS orders, understanding your options and planning ahead will help you make the best decisions for your financial future. Remember, resources are available to help you navigate these challenges, from VA loan specialists to military financial counselors who understand the unique demands of military life.
