VA Loans: Enlistment Verification
Whether a service member is close to their re-enlistment date can have an impact of the process of a VA loan. For military members applying for VA loans who are within a year of their current re-enlistment date, obtaining enlistment verification is vital. Additionally, the Department of Veterans Affairs has other paperwork requirements for VA loan applicants currently serving who are near the end of their current military service commitment.
The VA Lender’s Handbook instructs lenders to “identify service members who are within 12 months of release from active duty or end of contract term. Find the date of expiration of the applicant’s current contract for active service on the LES (for an enlisted service member). For a National Guard or Reserve member, find the expiration date of the applicant’s current contract.”
This is necessary because additional information is required from the VA loan applicant when they are within a year of re-enlistment. VA loans require the lender to get one or more of the following, according to VA.gov:
- Documentation that the service member has already re-enlisted or extended his/her period of active duty to a date beyond the 12-month period following the projected closing of the loan.
- Verification of a valid offer of local civilian employment following the release from active duty. All data pertinent to sound underwriting procedures (date employment will begin, earnings, and so on) must be included.
- A statement from the service member that he/she intends to reenlist or extend his/her period of active duty to a date beyond the 12 month period.
When service members provide a statement of intent to re-enlist, VA loan rules require the borrower to furnish an additional statement from the applicant’s commanding officer or a designated representative stating that the applicant is eligible to re-enlist as indicated on the borrower’s letter of intent, and that there is no reason why the re-enlistment or extension of duty would be denied.
In cases where such a statement might not apply (the applicant’s pending military retirement would be one good example), the commander has the option of submitting “documentation of other unusually strong positive underwriting factors” which could include a down payment of 10 percent or more, “significant cash reserves” or what the VA describes as, “clear evidence of strong ties to the community coupled with a nonmilitary spouse’s income so high that only minimal income from the active duty servicemember is needed to qualify.”
About Joe Wallace
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association.