If you’re considering a VA Home Loan in Texas, you will want to make sure you know all of the details regarding the Texas VA loan limits, benefits, and eligibility criteria.
For those who qualify, a Texas VA Loan often comes with the most favorable loan terms available on today’s market. These loans allow homeowners to celebrate one of the most important milestones while knowing they received substantial savings on the real cost of their home purchase.
VA loans are obtained through a multitude of private lenders, but they are all backed in part by the Department of Veterans Affairs.
This government-funded support makes lenders more likely to issue loans to applicants who may not qualify for traditional mortgage products. However, this security also enables them to offer more favorable terms to buyers.
These benefits are the key reason why so many individuals and families are applying for a Texas VA loan. Don’t forget to make sure that you understand exactly how this military mortgage program could save you thousands of dollars.
No Down Payment
Many individuals will spend years scraping together the necessary savings for a down payment on a home. In the past, most lenders required a twenty percent down payment. The most significant advantage to the VA loans is that many lenders will not require a down payment at all.
No Private Mortgage Insurance
Private mortgage insurance (often abbreviated PMI) is typically required for homeowners who have a down payment of less than twenty percent. This is often tacked onto the monthly mortgage payment and equates to 0.3 to 1.5 percent of the loan amount annually.
A Texas VA loan allows homeowners to forego making these payments and offers a substantial savings over the duration of the loan.
No Penalty for Paying Off the Loan Early
Even with low VA loan rates, interest can really accumulate over the course of a thirty-year loan. Some homeowners attempt to reduce their out-of-pocket costs by making additional payments to pay off their mortgage early. If you aren’t paying attention, a traditional mortgage may hit you with a penalty for this financially savvy move. Fortunately, VA loans do not have any penalty for early payoff.
Loan Assistance Available from the VA
The ultimate goal is to keep you in your home longer. This is why the Department of Veterans Affairs enlists the help of qualified loan experts to help you find resources and loan assistance programs when you need them. With their aid, you may be able to avoid foreclosure, so don’t hesitate to reach out if you find yourself unable to make ends meet.
Eligibility
Qualifying for a Texas VA loan most often means meeting the criteria for a Certificate of Eligibility. This verifies that you have met the service and time requirements in a branch of the United States armed forces. Depending on the dates, there are many specific criteria regarding service commitments both in peacetime and in wartime. It’s possible that surviving spouses may also qualify for a Texas VA loan.
For more detailed eligibility requirements, you can check the criteria here.
Obtaining your Certificate of Eligibility is the first step in qualifying for a military mortgage. You must also be able to find and decide on a property that is eligible for financing under this program. Fortunately, there are plenty of options to choose from.
Beyond just purchasing a single-family home, prospective buyers can do a number of things with the financing they receive from lenders. They may also purchase a condominium in a VA-approved project or a manufactured home and lot. Your loan can be written to help you build a brand-new home, make renovations to a newly purchased home, or install energy efficient upgrades.
Refinancing options are also available to allow you an opportunity to receive the low VA loan rates in Texas.
VA Loan Limits in Texas by County
How much can you borrow while still taking advantage of the significant benefits associated with a Texas VA loan? This number will ultimately be established based on your credit score, income, debt-to-income ratio, and other key factors. However, there are VA loan limits in Texas.
For most states, the loan limits are broken down by county to accommodate higher costs of living. This is simplified in Texas where all counties have the same VA loan limits this year. In 2018, the VA loan limits in Texas are $453,100.
This essentially means that you cannot borrow more than $453,100 without making a down payment of some kind. It is possible to receive a mortgage that exceeds the VA loan limits in Texas, but it will have a higher upfront cost.
Regional Loan Centers
Regional loan centers are designed to provide veterans and service members with additional information regarding their military mortgage. Representatives are available to help walk you through the eligibility requirements and help you take the first steps on purchasing a home with a Texas VA loan. If you are ever in need of loan assistance, the regional loan center is an excellent resource as well.
There are eight of these centers scattered across the country, but the center assigned to Texas is actually located in Houston. They are also assigned to serve veterans in Mexico, Central and South America, and the Caribbean.
Texas Home Prices
What could you reasonably expect to pay for a new home? Understanding the median prices for homes across Texas can help you to determine affordability and budget your finances accordingly. The median home price has been on the rise across the state, and the current trend seems as though it is likely to continue. For the state as a whole, the median list price of all homes is $269,000 which makes the square foot price come in around $120.
Specific cities may have average home costs that differ from the state as a whole, so we’re also going to take a closer look at three popular cities: San Antonio, Houston, and Dallas. For their median list prices, you can see the statistics below:
Click here to find out how Texas Teachers can find assistance in receiving a home loan.
Regional Benefit Offices
You can find more information regarding programs for veterans in your area by contacting one of the regional benefit offices. These offices can help connect you with advantageous services and answer questions regarding eligibility for a particular program.
I have bad credit. Can I get a VA loan in Texas? Yes, you may still qualify for a VA loan in Texas even with a low credit score. There are no minimum credit scores required for this loan program. If you can find a lender willing to work with your credit history, the federal government will still guarantee the loan.
Can a surviving spouse receive a VA loan in Texas? Under some circumstances, it is possible for a surviving spouse to receive a VA loan in Texas. You must meet some of the following criteria to qualify:
Must be the spouse of a veteran who died while in service or from a service-connected disability
Must be the spouse of a service member who is missing in action or a prisoner of war
Must be the spouse of a totally disabled veteran whose disability may not have been the cause of death
A surviving spouse must remain unmarried until the minimum age of 57. Any new marriage must have also taken place after December 6, 2003, in order to maintain eligibility for VA loans in Texas.
What is the VA loan rate in Texas? The VA loan rates in Texas will vary based on your unique circumstances and the lender. Mortgage rates constantly fluctuate, but they will often depend on individual factors such as your credit score, debt-to-income ratio, income level, and more. They may also vary due to other factors in the economy. As a result, there are no set VA loan rates in Texas.
Many home buyers in the Tar Heel State are opting to finance their home purchase with a VA loan in North Carolina. This government-sponsored program allows for some substantial savings, not to mention the generous VA loan limits in North Carolina.
Prospective home buyers should understand each of the loan programs available to them, as well as the features and benefits of each one. When they do, it’s likely that VA loans will be a clear choice for the most advantageous financing.
You will first need to understand exactly what the VA loan program is. These “military mortgages” are offered through private lenders but are partially guaranteed by the Department of Veterans Affairs.
The financial security of the government backing makes lenders more willing to issue loans with favorable and generous terms.
What kind of benefits are inherent to receiving a VA loan in North Carolina? If you’ve been wondering how much you could save on the purchase of a new home, you’ll want to check out these benefits.
No Down Payment
Most lenders will not require any down payment when you qualify for a VA loan in North Carolina. This represents the most valuable aspect of the loan program. Conventional mortgage products will often require a twenty percent down payment which can take prospective buyers years to save.
In comparison, VA loans allow you to purchase a home with very little upfront cost.
No Private Mortgage Insurance Premiums
With a low down payment, most lenders require homeowners to pay private mortgage insurance. These premiums typically run anywhere from 0.3 to 1.5 percent of the loan value annually. Depending on the size of your mortgage, this could mean a significant monthly cost in addition to your mortgage, taxes, and insurance payments.
If you receive a VA loan in North Carolina, you won’t be faced with private mortgage insurance, making your home more affordable each month.
No Penalty for Early Payoff
Are you eager to be debt-free and to own your home without the hassle of a monthly mortgage payment? Many individuals desire to make extra payments on a monthly or annual basis to help them save money on the interest fees.
Some lenders will charge a penalty or additional fees to make up for lost revenue when you make extra payments. However, there are no penalties for paying off VA loans early.
Loan Assistance Programs
Nobody wants to see their home move into foreclosure. When you have a military mortgage, you gain access to loan assistance programs through the VA that can help you to stay in your home. If you believe that you may be at risk of losing your home due to financial hardship, reach out to one of their loan experts who can connect you with these programs.
VA Loan Eligibility in North Carolina
As with most mortgage products, there are specific eligibility criteria in order to receive a VA loan in North Carolina. You must have a Certificate of Eligibility, a document that verifies your service in the armed forces. The detailed service requirements will vary depending on your branch and whether you served during peacetime or wartime.
Under certain circumstances, a surviving spouse may also qualify for a Certificate of Eligibility. For the detailed breakdown of eligibility criteria, you can view the service requirements here.
From here, you will need to find a property that is eligible for financing through this military mortgage program. Many homeowners are set on a traditional single-family home, but that isn’t the only option. You can do a number of creative things with a VA loan in North Carolina in order to create your ultimate dream home.
For example, you may consider building your own new construction home or remodeling a recently purchased property. You can see a full list of possibilities for a VA loan below:
Single-family home
Condominium in a VA-approved project
Manufactured home and/or lot
Building a new home
Renovating a newly purchased home
Installing energy efficient features or improvements
Refinancing a direct loan to receive a lower interest rate
Refinancing an existing mortgage loan or other indebtedness secured by a lien of record on a home owned and occupied by a veteran as a primary residence
VA Loan Limits by County in North Carolina
Lenders will set VA loan limits in North Carolina by county. These loan limits dictate the maximum amount that a borrower can finance without making a down payment.
For most of the state, the VA loan limits in North Carolina are $453,100. Due to the varied costs of living across counties, there are several exceptions to this maximum limit. You can see some of the counties and their specific VA loan limits for North Carolina below:
Camden: $625,500
Currituck: $458,850
Gates: $458,850
Hyde: $483,000
Pasquotank: $625,500
Perquimans: $625,500
Homeowners may be eligible for jumbo loans to allow them to purchase the home of their dreams, but they will need to come up with a down payment. Your ability to purchase a more expensive home will be dependent upon your financial status, including your credit score and income level.
North Carolina VA Regional Loan Centers
The regional loan center located in Atlanta is available to offer assistance to veterans who want additional information regarding this loan program. Trained representatives are available to answer questions regarding eligibility, the application process, and the first steps you need to take to qualify for a VA loan in North Carolina.
This is also the best place to contact if you believe your home could move into foreclosure. Their loan experts can help connect you with available resources that may be able to prevent this drastic action.
North Carolina Home Prices
Affordability is a major concern for prospective buyers who want to create a firm financial future for themselves. Studying the median home prices in North Carolina can give you a better idea of what size or type of home fits neatly into your monthly budget.
Across the state, home prices are currently seeing an upward trend. The median price of all homes listed for sale in the state is currently at $250,900 with a square foot price of $123.
Some pockets of the state will see differing list prices, including major cities like Charlotte and Raleigh. In Charlotte, a prospective buyer can expect to find a median list price of $285,700 and a square foot price of $136. Raleigh is significantly more expensive with a median list price of $336,140 and a square foot price of $143.
VA Regional Benefit Offices for North Carolina
The regional benefit office for your local area can help to answer any questions you may have regarding eligibility for a VA loan in North Carolina. However, they are also able to connect you with other programs and services that may be specific to your area.
I have bad credit. Can I get a VA loan in North Carolina?
There are no minimum credit requirements for VA loans, so applicants with poor credit can still receive a VA loan in North Carolina. The government is willing to guarantee the loan as long as a lender will approve the financing. You will need to find a lender that is willing to work with individuals who have bad credit.
Can a surviving spouse receive a VA loan in North Carolina?
In some situations, a surviving spouse is eligible to receive a VA loan in North Carolina. They must be unmarried unless they are over the age of 57 and remarried after December 6, 2003. Additionally, they must meet the following criteria:
Must be the spouse of a veteran who died while in service or from a service-connected disability
Must be the spouse of a service member who is missing in action or a prisoner of war
Must be the spouse of a totally disabled veteran whose disability may not have been the cause of death
What is the VA loan rate in North Carolina?
The VA loan rates in North Carolina will vary based on your personal financial history, economic factors, and your specific lender. The government does not set a specific VA loan rate in North Carolina, so you will need to check with any potential lenders regarding what rates they are able to offer you.
Eligible service members and veterans will want to know about the advantageous program offered with VA refinance loans. While many may be aware of the benefits associated with the more conventional VA mortgages, a refinance loan can be equally beneficial for the right situation. Veterans can use these simple tools to take advantage of low interest rates and save thousands of dollars on the overall cost of their mortgage.
When compared to conventional loans, the mortgages available through the VA refinancing program can help you to save significant amounts each month. Not only do they hold the potential to lower your interest rates, but they also allow you to forego additional mortgage insurance payments you may currently be making. Veterans should be aware of how to qualify and use these refinancing loans to their advantage.
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How to Qualify for VA Refinance Loans
The Department of Veterans Affairs does not actually issue the financing for any home, whether it’s a new purchase or a refinance. As a result, many of the specific requirements for eligibility will vary based on the private lender you select. Credit scores, debt-to-income ratios, and preferred income amounts will all vary due to differing standards across the industry.
However, there is one requirement that will remain the same for all veterans applying.
You must qualify for a Certificate of Eligibility based on your service commitment to a branch of the armed forces. To summarize the requirements succinctly, you must be:
An active-duty service member
A veteran with other than dishonorable discharge
The spouse of a service member or veteran
The widow(er) of a veteran who died in the line of duty or due to a service-related disability
The widow(er) of a veteran who already has a VA mortgage on an existing property (for a streamline refinance)
For more specific information regarding the service requirements, you can check with the Department of Veterans Affairs here.
Types of VA Refinance Loans
When it comes to refinancing your home through this program, eligible service members will encounter two different financing options. Each one has its own unique purpose, advantages, and disadvantages. To help you select the appropriate refinancing scenario, we will dive further into those loans below.
VA Streamline IRRRL Program Pros and Cons
This type of financing is only available for homeowners who currently have a mortgage through the VA program. These loans, sometimes referred to as Interest Rate Reduction Refinance Loans (IRRRL), allow you to refinance the current mortgage on the property at a lower interest rate.
Pros
Obviously, saving money on your monthly mortgage cost is a huge advantage to the streamline refinancing. It can save you tons of money over the duration of your loan, as well as on your final expenses at the end of each month. However, there are more pros to this program that should be discussed in-depth.
Because you’re simply refinancing your current mortgage, a streamline refinance is typically faster and easier for lenders to process. You may even be able to find a “no cost” streamline loan that comes with no upfront expenses. This could be possible through gaining a slightly higher interest rate or bundling the closing costs into the “new” mortgage.
Homeowners also do not necessarily have to live in this home in order to qualify for a streamline refinance. Previous occupancy will be a requirement, but this is a great option for those now interested in using the home for a rental property.
Cons
When many people imagine refinancing their home, they believe they will walk away with tons of cash from the equity built up in the property. With a streamline refinance, you won’t be able to walk away from the closing with any extra funds. This is purely designed to help you lower your costs and save money on interest.
Cash-Out Refinance
This is the type of refinancing that most homeowners have in mind. A cash-out refinance allows you to pull money from the equity of your home. In this specific circumstance, homeowners can take up to the full amount of the home’s appraised value and possibly even more.
Pros
The major advantage to a cash-out refinance is the ability to generate a large sum of cash all at once. This money can be used for any purpose, whether you need to pay down some debt or facilitate a major renovation of the property. It’s a quick way to gain access to the money you need and to rewrite your loan to feature the more advantageous benefits of a VA mortgage.
With your new VA mortgage, you will often have lower interest rates. This can mean larger savings over the duration of your loan, as well as a potentially lower monthly cost. You can also get rid of pesky mortgage insurance payments that may be required with your current mortgage program.
You do not have to have a current VA mortgage in order to qualify for a cash-out refinance loan. If you were unaware of how much money this program could save you or you didn’t qualify at the time of your purchase, this presents another opportunity to take advantage of the many benefits.
Cons
Unlike the streamline refinance which doesn’t require the owner to occupy the property, a cash-out refinance must be your primary residence. This will not be the ideal solution if you are searching for an investment property or a new place to live.
Furthermore, the process may take longer than a streamline refinance. Because this will be handled similar to a new home loan, the process may involve more paperwork and a lengthier wait in order to receive the funds you’re anticipating.
VA Refinance Loan Requirements
Similar to a new purchase, there are some standard property requirements that apply to a refinancing loan from the VA program. If you are opting for a streamline (IRRRL) refinance, you already have a VA loan and these requirements should be no issue. When it comes to a cash-out refinance loan, your property will need to fall into one of these categories:
Single-family home or condominium in a VA-approved project
Manufactured home or lot
Refinancing an existing mortgage loan or other indebtedness secured by a lien of record on a residence owned and occupied by the veteran as a home
There are other categories available for the initial purchase of a new home, but many do not apply to a refinancing situation. Check with your lender for more information on whether your current home will qualify for refinancing through the VA program.
Rates for VA Refinance Loans
The Department of Veterans Affairs (VA) does not set the rates for mortgage programs. Instead, these are set by the private lenders who issue the financing. Interest rates can be based on any number of things, ranging from your personal information to economic indicators. You may face different interest rates based on your credit score, debt-to-income ratio, and the loan duration.
To find out what your current interest rates would be for a refinance, contact your lender today.
Bad Credit
Many homeowners wonder what their credit score truly needs to be in order to secure VA refinancing. There are no minimum credit score requirements for a new purchase or a refinanced VA loan. Lenders are encouraged to take a look at an applicant’s full file before making a determination regarding approval.
The average credit score for many homeowners who refinance their loan is around 620, but many lenders will issue a loan with credit scores as low as 580. However, you can still receive VA refinancing with a lower credit score as long as you have a lender who is willing to work with you.
Keep in mind that a lower credit score could result in a slightly higher interest rate.
Conclusion
Refinancing your current mortgage could be a great solution to save you thousands of dollars. Veterans who qualify for VA refinancing, whether through the streamline or the cash-out refinance program, should highly consider taking advantage of this program. You could receive lower interest rates and more favorable terms on your financing that could improve your financial status.
For more information on whether VA refinancing is right for you, be sure to contact your lender today.
FAQs
Can I use a VA loan to refinance a conventional loan?
Yes, you can use a VA loan to refinance a conventional loan. It may be subject to credit approval and underwriting procedures, depending on your lender.
What is the maximum amount that I can refinance?
This is dependent upon the VA loan limits in your specific county. In general, there are no maximum VA loan limits but the maximum guarantee amount is $453,100 for most counties (excluding those with higher costs of living). Beyond this amount, you may be required to place more money down on the home.
What is the funding fee for a VA cash-out refinance?
The VA funding fee for a cash-out refinance will vary depending on how many times you have used the loan and what branch of service you enlisted in. See below for more details:
– Regular military: 2.15% – Reserves or National Guard: 2.4%
The funding fee is 3.3 percent for all second-time borrowers.
Can I get a VA refinance loan to pay off credit card debt?
Yes, a cash-out refinance VA loan allows you to pull money from the equity built up in your home for personal use. This can be used to pay off credit card debt.
New Jersey homeowners who want the best possible terms on their mortgage often select VA loans over other available financing options. This is one of the most favorable programs available. You should be sure to educate yourself on the major savings and advantages that a New Jersey VA Loan can offer before you commit to any other mortgage product.
VA loans are mortgages offered by private lenders with some guarantee from the federal government. The Department of Veterans Affairs is willing to back a portion of each loan which makes lenders more apt to offer favorable terms and conditions.
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This guarantee also makes it more likely that lenders will issue mortgages to individuals who may not have qualified for traditional financing due to poor credit or higher debt-to-income ratios.
New Jersey VA Loan Benefits
The benefits associated with a VA loan in New Jersey can equal substantial savings for prospective home buyers. Be sure that you understand all of the associated perks so you can take advantage of this program.
No Down Payment
The reduced down payment is perhaps the single biggest reason why buyers express interest in New Jersey VA loans. A traditional mortgage product has historically required a twenty percent down payment to lessen the risk to lenders.
With the backing of the federal government, military mortgages typically don’t require any down payment at all. This eliminates the most substantial upfront cost associated with purchasing a new home.
No Private Mortgage Insurance
A low down payment often means that home buyers will be required to keep private mortgage insurance on their new property as well. This monthly fee can equate to 0.3 percent to 1.5 percent of the loan amount each year.
For some families, this extra expense would put the prospect of homeownership outside the range of what they deem affordable. A VA loan in New Jersey does not require this monthly payment.
No Penalty for Early Payoff
Have you considered paying off your mortgage earlier than planned? The good news is that VA loans allow you to do just that without incurring penalties or additional fees. You can save plenty of money on interest costs by paying off your home early and avoid fees associated with some traditional financing options.
Loan Assistance Programs
Because the loan is guaranteed in part by the government, there are plenty of resources available to help prevent you from experiencing foreclosure. If you feel that you may be unable to make your monthly payments, be sure to reach out to the loan experts through the Department of Veterans Affairs for access to resources and assistance.
Eligibility
The most important criteria to be eligible for a New Jersey VA loan is service in one of the branches of the United States armed forces. Your service times must be verified and you will need to receive a Certificate of Eligibility.
Service times are determined based on your responsibilities, discharge status, dates of service, and branch of the armed forces. Surviving spouses may also be eligible to receive a VA loan in New Jersey.
Be sure to take the time to carefully read all of the guidelines in order to meet the criteria for a Certificate of Eligibility.
Home buyers will also need to search for a property that meets the requirements to receive funding with a military mortgage. Contrary to popular belief, VA loans are able to be used for a wide variety of purposes. You can use them to purchase a single-family home, a condominium in a VA-approved project, or a manufactured home and lot.
However, there are lots of other options, including building a new home, installing energy efficient upgrades, or renovating a newly purchased home.
Some veterans may also choose to use this program to refinance their existing home. This allows them to take advantage of lower VA loan rates in New Jersey while maintaining their current residence.
New Jersey Loan Limits by County
In order to qualify for no down payment, your New Jersey VA loan will have to come in under the maximum loan amount. These VA loan limits in New Jersey are set by county and are based on the current cost of living.
You will want to take a careful look at what county the property is located in to determine the maximum amount for a military mortgage with no down payment.
Most of the counties have VA loan limits in New Jersey of $679,650. However, some counties have lower limits of $453,100, including:
Atlantic
Burlington
Camden
Cape May
Cumberland
Gloucester
Mercer
Salem
Warren
Keep in mind that these New Jersey VA loan limits do not guarantee that a lender will approve you for this amount. The financing that a particular lender can offer you will be based on your credit score, income, debt, and other factors.
Regional Loan Centers
The regional loan center that services the New Jersey area is actually located in Cleveland. This location is available to connect you with trained representatives who can answer questions regarding your eligibility, the application process, and the first steps toward homeownership with a VA loan in New Jersey.
This is also a great place to seek help if you need access to loan assistance programs or are in danger of facing foreclosure.
New Jersey Home Prices
You should ensure that you can afford a home long-term before making a final purchase. Researching the local real estate market and state trends can help you to decide what would be affordable in your area.
The home prices in New Jersey are rising at a slightly lower rate than some other areas in the country. However, they are still set to increase over the next year. There is currently a median list price of $289,900 with a square footage price of $170.
Popular cities such as Newark have a lower cost of living and a reduced median list price. The median list price for the Newark area is $185,000 with a square foot price of just $87. Compared to some other areas, this is extremely affordable.
Other cities will have more expensive costs of living. For example, Jersey City is going to be far costlier than the median home price across the state. The median list price is $418,600 for this area, and it includes a square foot price of $492.
VA Loans NJ Regional Benefit Offices
If you have questions regarding receiving a New Jersey VA loan or want information about other available services, you may want to contact the regional benefit offices. The regional benefit office for New Jersey is located in Newark.
I have bad credit. Can I get a New Jersey VA loan?
Yes, you may still qualify for a VA loan in New Jersey even if you have bad credit. You will need to find a private lender who is willing to work with you and your unique financial situation. However, there is no minimum required credit score for VA loans. You may face higher VA loan rates in New Jersey with a lower credit score.
Learn more about Bad Credit Home Loans in New Jersey here.
Can a surviving spouse receive a VA loan in New Jersey?
Yes, a surviving spouse may still be eligible for a VA loan in New Jersey under certain circumstances. You must be the un-remarried spouse of:
A veteran who died while in service or from a service-connected disability
A service member who is missing in action or a prisoner of war
A totally disabled veteran whose disability may not have been the cause of death
You may be remarried if you are over the age of 57 and were married after December 6, 2003.
What is the VA loan rate in New Jersey?
There are no set VA loan rates in New Jersey. Each lender will set their own mortgage interest rates based on your financial history. The current state of the real estate market will also play a big role in determining VA loan rates in New Jersey. Economic indicators make it impossible to predict future rates. Contact your lender to find out what interest rates you may qualify for a New Jersey VA Loan today.
For military members that are given the privilege of living off base, the military provides financial support to help secure housing. This assistance is known as the VA basic allowance for housing, abbreviated as BAH.
The BAH is given to military members that are not being housed in government quarters so that they can provide housing for themselves and their families.
The VA basic allowance for housing is a stipend that is provided based on a variety of factors that is based on the cost of living, dependants, and service member position.
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One interesting aspect of the BAH is that it does not specify renting as a requirement. While it can be used for renting there’s nothing forcing it to be used on such.
That means that a service member can actually use their BAH as income when applying for a mortgage. They can then use their BAH stipend to pay their mortgage!
Depending on the location of the home and various other factors discussed below, it’s possible to have a mortgage entirely covered by BAH.
While home ownership is not for every service member, for those interested in purchasing a home while on duty the BAH provides an incredible opportunity.
How Does BAH Work?
Eligibility
BAH is available to service members assigned to permanent duty within the United States who are not living in government furnished housing. This includes active service members who are assigned to a base, but live off base in civilian housing.
While not all service members will be given the opportunity to live off base, those that do will qualify for BAH benefits.
For those stationed internationally, they receive similar benefits through the overseas housing allowance, or OHA, which is set up to provide similar benefits.
The OHA rate is calculated a bit differently, and is done twice a year or every six months.
The rate itself is based on what members are actually paying, and not on averages like the BAH.
How To Use It
For home buying, the BAH monthly stipend can be seen as purchasing power towards a home and go to paying the mortgage.
Going to a lender, you can use all or some of your BAH earnings as income to increase your buying power and the loan amount you can aquire.
A lender will want to verify the BAH amount, and will do so through your leave and earnings statement. The lender will also want to ensure that you will likely continue to receive the benefits.
Lenders will be hesitant to work with someone who may lost their BAH benefits soon.
Keep in mind, you don’t have to use up the entirety of you BAH. Any leftover can be applied to other things such as utilities or homeowners insurance. That’s assuming there is money leftover though.
There’s no guarantee that BAH will cover your entire mortgage payment, and for more expensive homes payments will likely require additional out of pocket monies.
It’s also very important to plan for changes in your service status and location.
Many active duty service members relocate several times during their career. Not only will this change the amount received based on location and position, but there’s also the question of what to do with the purchased home.
It some areas it may be easy to sell or rent the home, in some areas it might not be. Keep a backup plan in mind.
Also, keep in mind that all of the other requirements for securing a mortgage are still in play.
That means things like your credit score and debt to income ratio should still be in the acceptable range for the mortgage you’re looking to secure.
How Much is the VA Basic Allowance For Housing
There are a lot of different factors that go into determining the amount for BAH, so it’s hard to give a straight answer.
The rate itself is calculated each year by the Department of Defense. They go through and look at aspects such as current rental costs, utility costs, and other factors like renters insurance costs.
This rate is then further influenced by the individuals rank and pay grade, those higher in both are going to get a larger stipend for BAH.
What this does is create variable rates that are heavily dependant on location. Service members in more expensive parts of the country generally receive a larger amount to stay competitive in the market.
On the reverse, in cheaper markets they will receive less. It’s important to note that the given rate is based on the service member’s duty location, not the on the actual location of the residence.
Lastly, having dependents also influences the amount for BAH. There is a separate with dependents rate that service members with spouses or children will receive. This helps to offset the additional cost for housing when living with others.
Note that this is a flat increase based on having dependents, the number does not influence the rate. For example, a member with a spouse and no children and one with a spouse and children would receive the same amount.
Does BAH Change?
As BAH is recalculated each year it is subject to change based on the trends in the housing and rental market. That said, the DOD has created a rate lock which prevents your rate from going down.
This is important in the eyes of the lender so that they can be assured a change in your rate in the next year won’t affect your ability to repay the loan.
It’s also important to note that the rate lock assumes your rank, location, and dependant status does not change. If you’re re-located for example, you’re rate is subject to change based on your new location.
VA basic allowance for housing
The housing allowance through the BAH program is an extremely powerful benefit for active service members. The ability to use it as income when securing a loan can help many off-base living service members afford a home.
Considering that BAH is additional on top of the standard salary, it’s easy to see how it can be extremely beneficial.
FAQ
Who Qualifies For Basic Housing Allowance in the Military?
The BAH benefit is available for permanent duty military personnel in the United States who live in non-government funded housing. This is generally stationed military members who live in off base housing.
Additionally, there is a similar, but different, program for service members stationed overseas called the Overseas Housing Allowance.
What does basic housing allowance cover?
BAH is meant to cover the majority of costs of housing including rent and utilities. That said, BAH money can be used for any sort of expense, and those that are able to use less than the amount they are given are able to save the rest.
Is Basic Housing Allowance Taxable?
No, BAH allowances are tax exempt stipends for service members.
What Happens if the BAH Rate Goes Down?
Due to the rate lock, if the BAH rate goes down you’ll maintain your old rate. However, your rate can go down in situations where you’re relocated to a lower cost of living area.
How Is the BAH Rate Calculated?
The BAH rate is calculated each year, and takes into account the cost of living in a particular area. It then is further influenced by the service member’s rank, pay grade, and whether they have any dependants.
How Do Dependents Affect The Amount for BAH?
Having dependants raises the amount of the BAH a member receives, but this is a flat rate for having dependents. The number of dependants does not matter.
For those who qualify, a Texas VA Loan often comes with the most favorable loan terms available on today’s market. These loans allow homeowners to celebrate one of the most important milestones while knowing they received substantial savings on the real cost of their home purchase.
Many home buyers in the Tar Heel State are opting to finance their home purchase with a VA loan in North Carolina. This government-sponsored program allows for some substantial savings, not to mention the generous VA loan limits in North Carolina. 
What kind of benefits are inherent to receiving a VA loan in North Carolina? If you’ve been wondering how much you could save on the purchase of a new home, you’ll want to check out these benefits. 
Lenders will set VA loan limits in North Carolina by county. These loan limits dictate the maximum amount that a borrower can finance without making a down payment. 
Eligible service members and veterans will want to know about the advantageous program offered with VA refinance loans. While many may be aware of the benefits associated with the more conventional 
This type of financing is only available for homeowners who currently have a mortgage through the 
This is the type of refinancing that most homeowners have in mind. A cash-out refinance allows you to pull money from the equity of your home. In this specific circumstance, homeowners can take up to the full amount of the home’s appraised value and possibly even more. 
Similar to a new purchase, there are some standard property requirements that apply to a refinancing loan from the VA program. If you are opting for a streamline (IRRRL) refinance, you already have a VA loan and these requirements should be no issue. When it comes to a cash-out refinance loan, your property will need to fall into one of these categories:
The benefits associated with a VA loan in New Jersey can equal substantial savings for prospective home buyers. Be sure that you understand all of the associated perks so you can take advantage of this program.
For military members that are given the privilege of living off base, the military provides financial support to help secure housing. This assistance is known as the VA basic allowance for housing, abbreviated as BAH. 
BAH is available to service members assigned to permanent duty within the United States who are not living in government furnished housing. This includes active service members who are assigned to a base, but live off base in civilian housing. 
There are a lot of different factors that go into determining the amount for BAH, so it’s hard to give a straight answer. 
