Changes to VA Loan Eligibility: What You Need to Know

Changes to VA Loan Eligibility: What You Need to Know
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The VA recently implemented changes to its home loan program mandated by a MOAA-backed law passed in January, expanding the benefit to more veterans who served in Vietnam and making other changes, including to National Guard eligibility.


Under one of a wide array of provisions included in the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020, those who served in the Republic of Vietnam from Nov. 1, 1955, to Feb. 27, 1961, now need only to have served 90 total days on active duty to qualify for the home loan benefit, instead of 181 continuous days. Those with service-connected disabilities are not required to reach either benchmark.


[RELATED: More on the Isakson/Roe Act]


The change comes as part of the law’s redefinition of the “Vietnam era” of benefits qualification. That period has expanded to include those who served in the Republic of Vietnam from Nov. 1, 1955, to May 7, 1975. The start date had been Feb. 28, 1961, for in-country service; those who served between Aug. 5, 1964, and May 7, 1975, regardless of location, still are considered “Vietnam era” veterans.


More details on VA loan eligibility are available at the VA’s website. Note: the page does not reflect the change outlined above, but they should be reflected in the application process for a Certificate of Eligibility.


The law also provides loan-program eligibility for servicemembers and veterans who performed full-time National Guard duty for at least 90 days, including at least 30 consecutive days.


Disaster Relief

Finally, the law offers relief for those with VA-backed loans seeking another VA-backed loan to address property damage connected to national disasters.


[RELATED: How to Refinance Your VA Loan]


The bill lets these borrowers pay a first-time funding fee on such a loan instead of a subsequent-use funding fee. The new loan for repairing or replacing the damaged residence must be closed within three years of the disaster declaration, according to a VA press release outlining the changes.


Fees vary by loan type and are waived for disabled veterans and others; learn more about the funding fee structure at this link.


The VA guaranteed more than 624,000 loans in FY 2019, the last year included in the department’s most recent annual report. The average purchase loan was $277,837, with a $68,418 average guaranty.


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About the Author

Kevin Lilley
Kevin Lilley

Lilley serves as MOAA's digital content manager. His duties include producing, editing, and managing content for a variety of platforms, with a concentration on The MOAA Newsletter and Follow him on Twitter: @KRLilley