December 12, 2012
Members of the Army, Navy, Air Force, and Marine Corps have a military benefit through the Department of Veterans Affairs that they can use to purchase a home with no downpayment in most cases, and several other perks. Some of those perks are very similar to FHA loans, such as the option to pre-pay or pay off the loan ahead of schedule without a penalty.
But are military members who are eligible for VA loans also eligible for an FHA loan if they choose FHA over VA? Does having the option to apply for a VA home loan render them ineligible for an FHA mortgage instead?
FHA loan rules do not exclude military members; there are many reasons why a borrowe may choose not to use his or her VA benefits–or be unable to use them in full at the time of purchase. These veterans sometimes choose FHA mortgage loans instead.
Here’s what FHA loan rules say about military members applying for FHA mortgages, as described in HUD 4155.1:
“Military personnel are considered occupant-owners, and eligible for maximum financing if a member of the immediate family will occupy a property as the principal residence, whether or not the military person is stationed elsewhere.”
What does it take to start the FHA loan process for a veteran or currently serving military member? According to the FHA official site, “A completed Certificate of Veteran Status (CVS, VA Form 26-8261) issued to a veteran borrower is the only document that may be used for program eligibility. The Department of Veterans Affairs is solely responsible for determining eligibility for a CVS and its subsequent issuance.
Requests for a CVS must be sent on VA Form 26-8261a, along with proof of military service, to the appropriate VA Eligibility Center. This form is available at http://www.va.gov/vaforms/. ” As you can see, there is a bit of VA paperwork required in these cases–borrowers who need more information on applying for an FHA loan in this manner should discuss their situation with a loan officer or contact the FHA directly.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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