When you’re serving your country while overseas, the last thing you want to worry about is the risk of your family getting evicted or foreclosed upon.
Military families make a lot of sacrifices so we can all enjoy our freedoms. Because of this, the U.S. government has provided special military housing programs and protections for members of the armed services and their families. Regardless of what branch of the military you or your family member serves in, you have the right to take advantage of some benefits.
If you choose to live on base in military housing, you can live essentially rent free (other than your utility bills of course). Some families prefer living on base because of the close bonds that can be formed between family members with loved ones in the same branch of the service. It’s also more convenient for the men and women in active duty to get to work when they already live on base.
Those that prefer to rent a home not located on the base receive a Basic Allowance for Housing. This does not always cover the rent payment entirely (depending on what type of a property you choose to rent and where) but it surely can help.
VA loans to purchase your own home
Families who decide to purchase a home rather than rent can save money by getting a VA loan. VA loans are only available to active duty or eligible veterans and can only be taken out on homes that will be owner occupied. VA loans do not require a down payment, which makes home ownership more attainable for many families. In additional, borrowers are prohibited from paying certain closing costs. Instead either the home seller or lender cover the costs that are “non allowables” for the buyer. Not every lender can do VA loans however, so make sure to contact a VA-approved lending institution or broker.
The property also has to qualify for the VA loan, so make sure your real estate agent shows you houses that qualify. For example, major fixer-uppers and houses without complete kitchens or stoves will not qualify. Properties with unpermitted additions may also not pass VA inspections. Finally, the loan amount that you are taking out cannot exceed the Department of Veterans Affairs’ value estimate of the property, which is why an appraisal is mandatory.
In my experience as a real estate Broker, it can be hard to get an offer accepted in a very competitive market with a VA loan because sellers know they’ll probably have to pay for some of the buyer’s closing costs. Plus, the buyers typically put no money down. The offer with the most “skin in the game” is often viewed as stronger, which is why cash offers are beating out financed offers. Yet the terms of VA loans can make things a lot easier on you and your family, since not everyone has a large amount of money available for a down payment or for closing costs. Persistence is really the key when making VA financed offers.
Servicemembers Civil Relief Act
Formerly known as the Soldiers and Sailors Relief Act, this federal statute allows qualified members of the military temporary relief from paying their mortgage when necessary and can even postpone court actions such as foreclosures.
In addition, it provides protection from eviction for military tenants and their families (depending on rent amount and other circumstances) and a reduced interest rate on credit card debt. There are certain qualifications, however. For example if a deployed member of the service needs temporary relief from his or her mortgage payments, the house must have been purchased before he or she entered the services.
Reimbursement for the cost of home selling
Another issue facing military homeowners is the fact that they are sometimes forced to sell their properties in markets that are not ideal for selling. When families get the order to move, many choose to rent out their current homes, but if the current market rent won’t cover their mortgage payment it may not be worth it. Thus, they end up having to do short sales (or even face a foreclosure), when they would have otherwise stayed in the property until the value came back up.
The Department of Defense Homeowners Assistance Program allows qualified homeowners money as a reimbursement for having to sell their homes at a loss. It will also help pay off the homeowners loans when the contract purchase price is less than what the homeowner currently owes, which helps the military family avoid a short sale.
You can get more information on the Department of Defense Homeowners Assistance Program or apply here. You shouldn’t have to worry about your housing situation when you’re serving our country. With so many different military housing programs and relief options available, military personnel and their family members should take advantage of the programs that they need.