In the military and going overseas? You can still get a mortgage — here’s how

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At any given time, a multitude of U.S. military personnel are stationed or deployed overseas. Although far from home, it’s possible for active-duty military abroad to get a mortgage — a VA loan or other type — and buy a home, thanks to remote capabilities.

Should you get a VA loan?

Military service offers many benefits, and one is the VA mortgage loan program. A VA loan allows those with honorable military service, or eligible surviving spouses, to finance the purchase of a home or refinance an existing mortgage with attractive terms. These include:

  • No credit minimum – Unlike other types of mortgages, VA loans have no minimum credit score requirement from the U.S. Department of Veterans Affairs to adhere to, which allows mortgage lenders some flexibility when qualifying a borrower.
  • No down payment – You don’t need to make a down payment to qualify for a VA loan. Mortgage lenders generally prefer borrowers make a 20 percent down payment on a home, but since that’s not financially practical for many, there are insured mortgage programs that allow for a much lower down payment, such as FHA loans. The VA approach is different: Borrowers need nothing at all upfront.
  • No mortgage insurance – Unlike other low-down payment programs that require mortgage insurance if the borrower puts down less than 20 percent, there are no mortgage insurance premiums for a VA loan. There is, however, an upfront funding fee, the cost of which depends on how much you put down (if making a down payment) and how many times you have used the VA loan program.

Even if you’re eligible for a conventional or other type of mortgage, a VA loan can help you buy a home with minimal upfront cost, so it’s worth considering as an option whether you, a family member or member of your household is on active duty or a veteran.

If you are currently on active duty, know that there is a minimum service requirement for a VA loan: 90 consecutive days. If you meet that minimum, you can then apply for a Certificate of Eligibility (COE), which you need to obtain the loan. To do this while on active duty, you need a signed statement of service from your commander, adjutant or personnel officer. Once you have this statement of service, you can apply for your COE through the eBenefits portal.

Why to buy a home while deployed

Part of serving in the military is the possibility of needing to move as required, often on short notice. If you’re currently renting, or already a homeowner and in need of more space, you can still buy a home even in the event you are deployed. The advantages of buying a home include:

  • Low mortgage rates
  • No lease (if you’re a renter)
  • Stability for family members, especially children

What to consider when buying a home from abroad

If you (or a family member) are deployed and you’re in the market for a home, you won’t have the opportunity to look for a property in person. A spouse, other family member or real estate agent can help, and you might even be able to do a 3D walkthrough or video tour yourself.

Beyond the house-hunt, you’ll also need help managing the process of getting a mortgage. Keep these three points in mind:

1. Granting a power of attorney

While you are deployed, you can appoint a person or entity to represent your interests in the purchase of a home with a power of attorney (POA). To grant a POA, you’ll need assistance from an attorney, legal clinic or a Judge Advocate General (JAG). Any of these professionals can also recommend additional legal measures to take, depending on your situation.

In many cases, military members grant a POA to a spouse so the spouse can do tasks like sign paperwork on their behalf. As you consider who to appoint, ask these questions:

  • What powers will you allow the person to have?
  • Do you want to establish limitations?
  • How long will the POA last?
  • Can you revoke the POA at any time?
  • Can you name a backup?

You’ll also want to confirm with the closing or title agent what POA documentation they’ll need to close your mortgage.

2. Meeting occupancy requirements

A condition of VA financing is that the borrower must live in the home, which can be a concern if you’re deployed.

In general, borrowers have a “reasonable time” to move in once their VA loan closes. “Reasonable” is defined as 60 days, but can be longer if you can certify that you’ll live in the home by a specific date within 12 months of the closing. If you are on active duty and can’t meet the “reasonable” standard, a spouse or a dependent child can live in the home to satisfy this occupancy requirement.

However, if you’re deployed, you already meet the occupancy requirement. As outlined by VA:

“Single or married servicemembers, while deployed from their permanent duty station, are considered to be in a temporary duty status and able to meet the occupancy requirement. This is true without regard to whether or not a spouse will be available to occupy the property prior to the veteran’s return from deployment.”

3. Verifying military status

It’s important to have your military status verification before searching for a home or applying for a mortgage.

VA loans are limited to those with qualifying military service. Under the Servicemembers Civil Relief Act (SCRA), military members have access to benefits such as foreclosure protection. For this reason, when considering a VA loan application, mortgage lenders need to verify the borrower’s active-duty service and other service-related information.

The Defense Manpower Data Center (DMDC) maintains a Verification of Military Service website. There are also commercial vendors that provide this information to lenders. It’s best to consult with your lender for specific details regarding what you need.

Bottom line

VA loans have unique benefits that can make buying a home more affordable, and you can still get one while you (or a family member) are deployed, provided your service qualifies you. Appointing a power of attorney can help manage the purchase of the home on your behalf while you’re away, and your lender can advise you about what documentation you need to verify your military status.

Learn more:

Written by
Peter G. Miller
Contributing writer
Peter G. Miller is a contributing writer at Bankrate. Peter writes about mortgage rates and homebuying.
Edited by
Mortgage editor
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