How National Guard Members Can Qualify for a VA Loan

Many National Guard members have used the National Guard VA loan program to purchase a home, and the reasons are generally the same.  

This program can help borrowers feel less financially burdened by not only facilitating the purchase of a property without the need for a down payment, but also by doing away with the requirement for mortgage insurance.  

Moreover, National Guard personnel who want to settle down and make investments in their future will find VA loans even more alluring because they frequently have reasonable interest rates. 

VA loans give an avenue that is in line with the special needs and obstacles that members of the National Guard encounter, whether it is the want to offer stability for family members in the face of repeated moves or the goal to accumulate equity and finances for the future. 

In this article, we explore the conditions that National Guard troops must fulfill to be eligible for a VA loan. 

VA Loan Requirements for National Guard 

Buying a home can be difficult, especially for first-time buyers with little money saved up for a down payment. The down payment for a median-priced home in the U.S. can easily exceed $20,000, and more than that in pricier real estate markets.  

Fortunately, military members and veterans with a certain amount of service can avoid the down payment altogether by using the VA loan program. This is one of the only mortgage programs that allows you to finance up to 100% of the purchase price.   

National Guard members can also use the VA loan program, but the eligibility requirements are slightly different from those for regular activity-duty military personnel.   

There are two main ways that National Guard members can qualify for VA loans: 

1. Active Duty Service 

National Guard members seeking eligibility for VA loans through active duty service must fulfill specific criteria to qualify. Serving a minimum of 90 days of active duty under Title 10 orders is a fundamental requirement, encompassing various forms of federal service beyond routine Guard duties.  

This includes deployments, training exercises, or any other federal assignments mandated by Title 10 authority. Crucially, a portion of this service—30 days, to be exact—must be consecutive to meet the stipulated conditions for eligibility.  

It’s imperative that National Guard members maintain accurate records of their service, ensuring that their DD214 documents appropriately reflect the duration and nature of their active duty commitments, complete with the requisite activation codes.   

2. National Guard Service 

The alternative pathway to VA loan eligibility for National Guard members centers on their cumulative service within the Guard. Here, the emphasis lies on honorable service spanning a minimum of six years, encompassing both initial training obligations and continued participation in drills and other Guard activities.  

Unlike the active duty route, there’s no stipulation for National Guard members to have completed any period of active duty service under this pathway. Instead, the focus is squarely on the dedication and commitment demonstrated over the course of their Guard service.  

This distinction underscores the unique nature of the National Guard service and acknowledges the valuable contributions made by its members to the nation’s broader defense framework. 

(Note: You can learn more about these and other program requirements on the U.S. Department of Veterans Affairs website.)   

If you are a current or past member of the National Guard and meet the VA loan requirements summarized above, the next step is to obtain your Certificate of Eligibility. So, let’s talk about how you would go about doing that. 

How to Obtain Your Certificate of Eligibility 

To qualify for a VA-guaranteed mortgage loan, National Guard members must obtain a valid Certificate of Eligibility (COE) from the Department of Veterans Affairs. This document is critical in the VA loan application process. It verifies a National Guard member’s service history and confirms their eligibility for a VA-guaranteed mortgage loan.  

Lenders rely on the COE to assess the borrower’s qualification for the loan, making it an essential step in securing VA loan approval. This is one of the most important documents for borrowers because it paves the way for the rest of the VA loan application process and approval process. You can’t move forward until you obtain your COE.    

As explained below, the process for requesting a COE can vary based on your National Guard service and status. 

1. Current or Former Activated National Guard Member 

If you’re a current or former activated National Guard member, you’ll need a copy of your DD214 or other discharge documents. If you have at least 90 days of active-duty service (including a minimum of 30 consecutive days), you’ll need a copy of either your DD214 or DD220 showing your activation date.  

2. Current Member of the National Guard Who Has Never Been Activated 

If you are currently serving in the National Guard and have never been activated in the past, you’ll need to obtain a statement of service signed by your commander, adjutant, or personnel officer. It should include your name, SSN, DOB, and information about your service length. Your personnel department should be very familiar with this process.   

3. Discharged Member of the National Guard Who Was Never Activated 

If you were discharged with no active duty time in the past, you would need to obtain a “Report of Separation and Record of Service” (NGB Form 22) along with your “Retirement Points Statement” (NGB Form 23).  

In addition to these documents, it’s helpful to have a comprehensive VA loan application checklist to ensure you’re prepared for the process. This checklist may include items such as proof of income, employment history, credit reports, and any additional documentation required by your lender or the VA.  

Having everything in order can streamline your application process and increase your chances of approval. 

General VA Loan Requirements 

Besides the service-related criteria mentioned in this article, National Guard members must also meet standard VA loan requirements. Here’s an overview of those checkpoints.   

Credit Score 

The Department of Veterans Affairs does not set any minimum VA loan credit requirements for borrowers. However, your mortgage lender might have a minimum score requirement for home loan applicants.  

A higher credit score generally enhances the likelihood of loan approval and may result in more favorable terms. Conversely, a lower score could pose challenges during the approval process and potentially lead to less advantageous loan conditions. 

Sufficient Income 

Ensuring stable and adequate income is crucial for National Guard, active duty, and Reserve members seeking VA loans. Lenders rigorously assess income to confirm borrowers’ capacity to meet monthly mortgage payments.  

A consistent income stream is essential for approval, reflecting the borrower’s financial stability and ability to repay the loan over time. This evaluation is a standard practice across all military personnel applying for VA loans, emphasizing the significance of reliable income sources.  

Borrowers must provide evidence of their income’s stability and sufficiency to assure lenders of their financial capability to manage the loan responsibly.  

Manageable Debt 

Maintaining a manageable debt-to-income (DTI) ratio is crucial for National Guard members applying for VA home loans. The DTI ratio illustrates the portion of income allocated to servicing existing debts.  

The VA typically prefers a DTI ratio of no more than 41%, ensuring borrowers can comfortably manage additional mortgage payments. However, exceptions are possible with certain compensating factors, allowing lenders flexibility in evaluating applicants’ financial situations.  

National Guard members must aim for a balanced DTI ratio to enhance their chances of loan approval, demonstrating responsible financial management and capacity to handle mortgage obligations. 

Additionally, for National Guard members interested in using VA loans for business purposes, there are specific VA business loan requirements that must be met. These requirements may differ from those associated with traditional home loans and are tailored to support entrepreneurial ventures and small business development.  

Potential borrowers need to familiarize themselves with these requirements before pursuing VA loans for business endeavors.  

It’s worth mentioning that VA loans are one of the easiest mortgage loans to qualify for these days. Mortgage lenders offering these loans to their clients receive a partial federal government guarantee, reducing their risk. As a result, lenders can be more flexible when reviewing and approving VA loan borrowers.   

Bottom line: If you’re a current or past member of the National Guard and plan to buy a home in the near future, you owe it to yourself to at least consider the VA loan program. It offers many benefits you just won’t find anywhere else.