The VA home loan benefit depends on the entitlement of the veteran. If the veteran is no longer with us, though, does that leave a surviving spouse without the home loan benefit?
Luckily, there are ways that surviving spouses can still use their spouse’s home loan benefit. Whether or not a surviving spouse is eligible depends on the situation. Below we discuss the qualifications you must meet in order to qualify as a surviving spouse that can use their spouse’s benefits.
Surviving Spouse Must Not be Remarried
The first qualification a surviving spouse must meet is that they cannot be remarried. If you have not married after the passing of your spouse, and you meet one of the following requirements, you may be eligible for his home loan benefit:
- Your spouse died while in service
- Your spouse died while out of the service, but as a result of an injury or illness obtained while in the service
- Your spouse is a POW or is missing in action for at least 90 days
- Your spouse had a disability rating and received or was eligible to receive disability compensation prior to his passing
If you meet one of these above factors, you should inquire about your eligibility for the VA home loan benefit.
Surviving Spouses of the Disabled
If you are a surviving spouse of a disabled veteran, your spouse must have met one of the following requirements in order for you to be eligible for the VA home loan benefit:
- Your spouse was rated continuously disabled for a minimum of 10 years before he died
- Your spouse was rated continuously disabled for a minimum of 5 years immediately following his discharge date
- Your spouse was rated continuously disabled for a minimum of 1 year and was a POW
Qualifying for the VA Home Loan Benefit as a Surviving Spouse
Once you know that you are eligible for the VA home loan benefit as a surviving spouse, you must prove that you qualify for the loan. VA home loans have simple qualifying guidelines, which should make it easy on you though:
- Minimum 620 credit score
- Maximum 43% total debt ratio (includes your mortgage and consumer debts)
- Stable income/employment (retirement income can count)
- Proof that you will live in the home as your primary residence
- Proof of enough disposable income for the cost of living in your area and for your family’s size
As you can see, the qualification requirements are simple, but they must be met. It’s not enough to be eligible for the program; you have to prove that you can afford the payments.
Benefits of the VA Loan for Surviving Spouses
As a surviving spouse, you’ll realize many benefits if you do take advantage of the VA home loan benefit. They include:
- You won’t pay a VA funding fee. Members of the regular military generally pay 2.15% of the loan amount and members of the National Guard or Reserves pay 2.4% of their loan amount. Surviving spouses do not pay anything.
- You won’t pay mortgage insurance. The VA doesn’t charge mortgage insurance to any veteran or surviving spouse.
- You can secure 100% financing. This means you don’t have to wait until you have money for a down payment. The only money you’ll need is to cover the closing costs, if you don’t wrap them into your loan amount.
- You can pay the loan off early. The VA doesn’t charge prepayment penalties. If you have extra money and can pay the loan off early, you’ll save money on the total interest paid over the life of the loan.
- You have access to low interest rates. The VA notoriously offers lower interest rates than any other loan program.
- You can refinance the loan with the VA streamline refinance. This lets you refinance your mortgage with proof of only your mortgage payment history and the benefit you receive with the refinance.
Surviving spouses can gain a lot of benefits from the VA home loan benefit. If you think that you may qualify for the program, contact a VA lender. They will be able to walk you through the eligibility process and then help you determine if you qualify for the loan.