Written by Isaac F. Davis

Many Reservists and National Guard members can get VA loans similar to the home loan benefits received by regular military members.  Most of the guidelines for the VA Home Loan Guaranty Program that apply to regular military members also apply to Reservists and National Guard members. However there are a few distinct differences.  Knowing the fundamentals can assist Reservists and National Guard members in maximizing their VA home loan benefits. 

Only VA-approved lenders can make VA-guaranteed loans to eligible military members – this includes qualified Reservists and National Guard members. VA mortgages are only for purchases of homes which owners intend to occupy.  The federal government guaranty guards lenders from partial loss if borrowers should default.  The VA guaranty is considered instead of a down payment.  This is the why most VA loans are obtained with zero money down. 

Service members who are eligible and qualify with ample credit and income (that includes Reservists and National Guard members) can get a VA loan for up to $417,000.  In some counties where housing costs are higher than the national average, VA loan limits can exceed $417,000.  Every VA-eligible borrower must present ample income and credit qualifications in order for lenders to determine how much they can borrow.  

To receive VA home loan benefits, Reservists and National Guard members must have served for at least six years AND must:

- Be serving presently, or

- Have been honorably discharged after six years, or

- Be on the retired list after serving six years, or

- Be transferred to Standby Reserve status following six years of honorable service

If a Reservists and National Guard member has completed less than six years of service, he or she must have been discharged for a service-connected disability in order to be eligible for a VA loan. 

Before getting a veterans’ mortgage, a VA-eligible borrower must first obtain his or her Certificate of Eligibility (COE). The online system called Web LGY is the fastest way for most VA-eligible borrowers to obtain a COE. That said, Reservists and National Guard are currently not in the Web LGY system.  For those not in the system, VA Form 26-1880 is available through most VA-approved lenders or online.  This form must be completed and submitted to the Winston-Salem Eligibility Center in order to obtain COE.

When the COE arrives in the mail and the Reservists or National Guard member has selected a home to purchase, the VA loan process can begin.  VA-eligible borrower should know that there is a required fee associated with each VA mortgage. 

VA funding fees are higher for Reservists and National Guard members than they are for regular military members.  For instance, first time VA loan borrowers in the Reserves or National Guard with no money down will pay 2.4% of the total loan amount, unless exempt.  For regular military members, the VA funding fee is 2.1% — slightly less.

The kind of loan, whether the borrower is a first-time or repeat VA loan user, and whether he or she has a down payment can affect the percentage paid with the VA funding fee.  Depending on these circumstances for Reservists and National Guard members who are VA-eligible, the fee can range from .5 to 3.3%. 

It’s hard to beat a VA loan when it comes to easy qualifying standards, no money down, and favorable loan terms.  For more on VA loans for Reservists and National Guard members contact a VA Loan Professional.