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Get Approved VA Loan Within 12 Months of Release Date

Can you get approved for a VA loan if you are within twelve months of your release date?

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

First off, thank you for your service to our country. When you apply for a mortgage -- regardless of the loan program -- lenders attempt to confirm that your employment and income are steady and permanent. In short, the lender wants to make sure that you can continue to make your mortgage payment and pay back your loan over time.

If your military service or employment contract is expected to end within a year of your mortgage closing, this makes your job situation and income less certain which in turn makes it more challenging to qualify for the loan. In fact, the VA applies specific guidelines for applicants who are within twelve months of their release date or the end of their employment contract with the military or National Guard.

According to VA Program eligibility guidelines, applicants in this position may be required to take extra steps and provide additional documentation but still may be approved for a VA loan if they meet one of the following four requirements:

Provide documentation that the servicemember has already re-enlisted or extended her or his period of active duty to a date beyond the 12-month period following the projected closing of the mortgage

Provide verification of a valid offer of local civilian employment following the release from active duty

Provide a statement from the servicemember that he or she intends to reenlist or extend his or her period of active duty to a date beyond the 12 month period, plus a statement from the servicemember’s commanding officer confirming that:

the servicemember is eligible to reenlist or extend his/her active duty as indicated, and

the commanding officer has no reason to believe that such reenlistment or extension of active duty will not be granted

Documentation of other unusually strong positive factors, such as:

a downpayment of at least 10 percent

significant cash reserves

clear evidence of strong ties to the community coupled with a nonmilitary spouse’s income so high that only minimal income from the active duty servicemember is needed to qualify

If you meet one of the criteria outlined above, you should be able to qualify for a VA mortgage even if you are within twelve months of your release date or the end of your contract. For example, a written statement that you intend to extend your active duty for at least a year after your expected mortgage closing date combined with a supporting statement from your commanding officer may be sufficient to get approved for the loan.

Please note that qualifying for a VA loan with an exception like this requires additional effort by both the applicant and the lender. Not all lenders are willing or able to put in the extra work so it is important to find a lender that has experience working with similar applicants.

The table below shows leading VA lenders near you. We advise you to contact multiple lenders as qualification requirements vary. When you contact lenders be sure to ask about the specific VA employment guidelines that apply to you.

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Current VA Mortgage Rates as of November 13, 2019
  • Lender
  • APR
  • Loan Type
  • Rate
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View All Lenders

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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.

Sources

VA Lender Handbook: https://www.benefits.va.gov/WARMS/docs/admin26/m26-07/Ch4_Underwriting_NEW.pdf

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%
Current Mortgage Rates as of November 13, 2019
  • Lender
  • APR
  • Loan Type
  • Rate
  • Payment
  • Fees
  • Contact
View All Lenders

%

Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.

About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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