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When serving in the military, many families either utilize on-base housing or receive Basic Allowance for Housing (BAH) to pay for a home in a civilian community. However, these options are only available while you’re still in the service. Upon concluding your time in the military, you’re responsible for securing and paying for housing on your own.
Many veterans may struggle to pay for, or even find, housing after service for several reasons, but among the most prohibitive is the continually rising cost of homeownership in the U.S. Between 2023 and 2024, median monthly homeowner costs increased by nearly 4%, with no signs of stopping anytime soon.
As a veteran, you’re entitled to benefits to at least partially offset these costs. Myriad state, federal, and nonprofit programs exist with the specific purpose to help military members and veterans become homeowners. You may face unique challenges due to your veteran status, but if you learn more about the difficulties you could encounter and the resources available to you, you’ll be in a much better position to secure the American dream of homeownership.
The process of buying a home as a veteran can differ from that of civilians. You may run into hurdles that a civilian wouldn’t, especially if you’re a newer veteran still transitioning out of the service. Common challenges facing prospective homeowners after their service include:
Luckily, these challenges aren’t impossible to overcome, especially if you take advantage of the various government benefits available to you as a veteran. Getting educated about first-time homeownership and credit, and making use of other assistance programs, can be of further help.
One of the most powerful benefits you have in your arsenal is a VA loan, or a loan backed by the U.S. Department of Veterans Affairs (VA). VA-approved lenders issue VA loans to help eligible veterans and service members become homeowners by removing common barriers to ownership. Active members and veterans can use them to purchase a home, as well as to build, repair, or renovate one.
That said, many veterans don’t make use of this benefit. By some estimates, nearly $28 billion in VA loans go unused — and that’s just in 2024. It’s thought these loans are underutilized in certain areas of the U.S. Qualifying veterans do live in these areas, but simply aren’t taking advantage of the benefit at the expected rate.
Even if it ends up not being the right choice for you, a VA loan is absolutely an avenue worth exploring, as it may make purchasing a home much more attainable for you. The main benefits of VA loans include:
Perhaps best of all, this is a lifetime benefit available to veterans, service members, and eligible surviving spouses. You can use it multiple times throughout your life, not just for a first-time home purchase.
It’s worth noting that your service history, not your income, determines your eligibility. However, your time of service will influence which requirements you have to meet. For those who have become a veteran between August 2, 1990, and the present day, you must meet one (not all) of the following requirements for a VA loan:
You must obtain a Certificate of Eligibility (COE) to apply for a VA loan. This document is a quick and effective way to show lenders that you do qualify for a loan based on your service history. You can request a COE online at the VA website.
In addition, there are certain criteria that both your finances and the property you’re purchasing need to meet. The VA requires you to have a sufficient amount of income left over after paying your mortgage and meeting your other financial obligations. You must also reside in the property you purchase.
Beyond this, each property must meet the VA’s minimum property requirements (MPRs). During the appraisal stage, the VA will assess whether the property you’re interested in purchasing meets their MPRs, rather than when you’re first applying for loans. They’ll look at the condition of the property and all its major systems (from the roof to plumbing and everything in between) to determine whether the property is safe and suitable for habitation and worth the agreed-upon price.
Keep in mind that the lenders who actually issue your loan may have additional eligibility requirements, such as a minimum credit score. These requirements may vary between lenders, so you’ll still need to shop around to find the best loan for you.
You may be a veteran, but that doesn’t mean a VA loan is the only way you can purchase a home. Traditional financing options remain available to you as both an active duty service member and a veteran. If that’s what works best for you and your finances, you can always pursue a more conventional loan option, such as:
Each kind of loan lasts for a specific term, often 15 or 30 years. That means, by the end of the loan’s lifetime, you will have paid it all back.
Private lenders, rather than the government, back conventional loans. You won’t enjoy any of the benefits associated with a VA loan, but you also don’t have to worry about meeting both the VA’s and the lender's eligibility requirements.
Depending on your circumstances, you may have still other financing options available to you. The following alternative forms of financing aren’t exclusive to veterans, but you may want to use one of them if you’re eligible:
You may have additional financing options beyond those listed above. Be sure to research programs and organizations in your state or local area, especially those geared toward veterans or first-time home buyers.
Serving in the military can affect your finances in many ways, often inadvertently, including your ability to build a good credit history and a good credit score. Without a good credit score, purchasing a home after service becomes that much more difficult. You’re likely to face higher interest rates, and you’ll possibly need to make a larger down payment or pay additional fees than someone with better credit.
Frequent moves and deployments can make it tougher for your credit card bills to reach you, and even tougher for you to pay them on time. This is especially true if you forget to update your address with your bank or credit card issuer.
It can even result in having a split or fragmented credit history with a creditor. In other words, a single creditor will have multiple files for a single person. Each file has slightly different personal information about you. For instance, if you move and change your address, the creditor may accidentally create an entirely new file instead of updating your existing file. This gives an incomplete picture of you as a borrower and may make it seem as if your credit isn’t as strong as it actually is.
Missed payments and an incomplete credit history can be quite detrimental to your overall credit health, making these major obstacles when you want to purchase a home. Ideally, you’d take steps to prevent them from occurring in the first place, relying on tools like auto pay for credit card bills and always updating your address after a move. However, if your credit score is already damaged, you must look forward to what you can do to improve it.
Luckily, there are ways you can strengthen your credit health and improve your credit score, no matter what it is. Some of the best ways you can start building your credit as a vet include:
These habits can help put you on the right path toward stronger credit. However, they won’t raise your credit score overnight. It will take time and patience to see the results of your efforts. It’s an investment worth making in yourself and your financial future, though, particularly if your dream is to become a homeowner.
Budgeting is essential for any prospective homeowner, but it can be especially beneficial for active duty service members and veterans. To budget thoroughly, craft it around the income you anticipate earning as a civilian, being sure to include all sources of money coming in (such as your spouse’s income). Then, factor in how much you expect to pay for your mortgage each month, as well as property taxes, homeowners’ insurance, and utility costs. Don’t forget to include other required costs, like groceries or paying off debt, and saving for home repairs.
It can be difficult to put together an accurate budget if you don’t know exactly what your salary or living expenses will be. However, even an approximation can give you a rough idea of what you can afford as a homeowner and what your finances need to look like to actually make the purchase. If a mortgage would be more expensive than your current housing costs, you can even start practicing to “pay” for it by saving that additional money, which can also help you save for your home.
Ideally, you’d begin taking these steps while still in service to help you prepare for your transition into civilian life. That said, there’s no reason you can’t get started on building a homeowner's budget as a veteran. At this point, you may have a more realistic idea of what you can afford and what your expenses as a civilian will be. It may still take time to achieve homeownership, but having a budget will help outline the steps you need to take to get there.
Many people in the U.S. can’t afford a home, potentially even with benefits like a VA loan or other government-backed housing programs. And if you’re in a tough financial situation, it can take time to rebuild your credit and improve your financial health. That’s when it might make sense to work with a nonprofit organization, so you can get some additional support in becoming a homeowner.
Many non-profit groups focus on helping veterans purchase a home when they wouldn’t be able to do so otherwise. Consider contacting an organization such as Operation Homefront, the Gary Sinse Foundation, Habitat for Humanity, or the Affordable Homeownership Foundation to see what assistance might be available to you. Don’t forget to look into local resources or state-specific organizations, too; they might be able to offer further help or be a better fit for your particular needs.
Buying a home after military service can be challenging, but it isn’t something you need to do alone. With the right resources, education, and tools, you can get the financial support you need to take this next step for you and your family. It may be a long process, but if it’s something you’re passionate about, it’s worth the investment to make the most of your life as a veteran.
For additional information and support in purchasing a home after your military service, please consult the following resources:
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