Home Purchase Mortgage Calculators
Mortgage Program Calculators
Thank you for submitting your question to FREEandCLEAR and thank you to your husband and you for your service to our country. The issue that you are running into is more of a VA-specific issue rather than a lender issue but there may be options to qualify for a mortgage. The VA has certain guidelines that address applicants with temporary employment contracts, such as your husband. The guidelines make it more challenging for service members who are within twelve months of their release date or the end of their employment contract to qualify for a mortgage although it still may be possible to get approved depending on you and your husband's specific circumstances.
I have pasted the VA guidelines related to this issue below and as you can see there certain conditions that your husband and you may be able to meet to qualify for a mortgage even though his employment contract ends within twelve months of the expected closing date of your mortgage. For example, a written statement from your husband that he intends to extend his active duty beyond twelve months from the date your mortgage closes combined with a supporting statement from his commanding officer may be sufficient to get approved for a mortgage. In the mortgage process a good letter can go a long way so this approach is something to consider. Additionally, as outlined below, there are other scenarios and conditions that may permit applicants in your husband's situation to qualify for a VA mortgage.
My recommendation is that you review the guidelines below and contact multiple lenders to understand how they would handle your situation. The VA allows lenders to exercise some discretion in evaluating a borrower's application so you may find a lender willing to work with you. You can contact VA lenders in your area by clicking VA INTEREST RATES We advise you to contact at least four lenders as qualification requirements can vary. When you contact lenders be sure to ask about the specific VA employment guidelines outlined below.
Please note that there is no guarantee that another lender will work with you on this issue and approve your mortgage application but it cannot hurt to ask. Requesting an exception to a rule, even if it is technically permitted under VA guidelines, involves more effort and risk for the lender so it may challenging to find a lender willing to approve your mortgage. Contacting lenders to review your situation is free; however, and if the lender does not believe you can qualify for a VA mortgage they may be aware of other, conventional loan programs that work for you.
VA Guidelines (source: VA Lenders Handbook)
In addition, identify servicemembers who are within 12 months of release from active duty or end of contract term. Find the date of expiration of the applicant’s current contract for active service on the LES (for an enlisted servicemember). For a National Guard or Reserve member, find the expiration date of the applicant’s current contract. If the date is within 12 months of the anticipated date that the loan will close, the loan package must also include one of the following four items, or combinations of items, to be acceptable:
1) documentation that the servicemember has already re-enlisted or extended his/her period of active duty to a date beyond the 12-month period following the projected closing of the loan, or
2) verification of a valid offer of local civilian employment following the release from active duty. All data pertinent to sound underwriting procedures (date employment will begin, earnings, and so on) must be included, or
3) a statement from the servicemember that he/she intends to reenlist or extend his/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, or
4) documentation of other unusually strong positive underwriting factors, such as:
a downpayment of at least 10 percent,
significant cash reserves, and
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.