What Every Active Duty Service Member Needs to Know Before They Apply

If you are on active duty and planning to separate within the next twelve months and you want to use your VA home loan benefit to purchase a home before you ETS this is critical information. Mark Clark works with service members in exactly this situation regularly and wants to make sure you understand how VA guidelines handle income qualification during this window.

Why Active Duty Income Cannot Be Used Within 12 Months of ETS

VA guidelines do not allow lenders to count active duty military income when the service member is separating within twelve months of the loan closing. The reason is straightforward. That income is not going to be there in the future. VA underwriting requires income to be stable and likely to continue for at least three years. Income that is ending within twelve months does not meet that standard regardless of how long you have been earning it or how reliable it has been throughout your service.

This catches a lot of service members off guard because the income has been consistent for years and feels stable. From a forward-looking underwriting perspective it is not.

What You Can Still Use to Qualify

The VA income restriction applies specifically to the active duty pay that is ending. Other income sources can still be counted and several options are worth exploring depending on your specific situation.

A spouse with verifiable income is one of the most straightforward solutions. Spousal income can be used to qualify the loan without any restriction related to the service member’s ETS timeline. Other documented income sources the borrower has outside of active duty pay can also be counted. Significant reserves may open additional conversations about qualification depending on the amount and the overall loan profile.

And one of the most useful options is a written job offer for post-separation employment. If the offer is in writing, without contingencies, and documents the compensation for the position the borrower is moving into that income can be used for qualification. Mark is currently working with a borrower in exactly that scenario.

What to Do If You Are in This Situation

Reach out to Mark Clark with the specifics of your situation. The path forward depends on what income sources and reserves are available and what your post-ETS employment picture looks like. There are options worth exploring before assuming a purchase is not possible during this window.

Sources

VA.gov
MilitaryOneSource.mil
ConsumerFinancialProtectionBureau.gov
MortgageNewsDaily.com
Investopedia.com