VA Loan Income Rules and the Post 9/11 GI Bill
A reader asks, “I’m currently in the IRR. I served in the Army Reserve for 6 years and my husband is currently active duty. I am using my Post 9/11 G.I. Bill and getting BAH payments. That is besides the point but general background information. I’m separated from my husband but we have since resolved our issues. Still, after losing command sponsorship, we are in separate states.
If I use my VA home loan eligibility under my name, yet I stay at home and go to school, can the BAH I get from my husband count as an income? I saw that you put at the lender’s discretion, they may consider this..Where do you think my situation falls on the hypothetical spectrum of getting approved without my husband on the loan (by choice)?”
There are two types of BAH–the military housing allowance–that might be at work in these circumstances. The BAH that a military member gets for serving in an area where that allowance is paid is one type, and then there’s a housing stipend paid through the Post 9/11 GI Bill that is equivalent to the BAH paid at a specific pay grade (see current GI Bill rules to learn more specifics on that detail) and is based on zip code.
Where VA loan rules for income are concerned, the housing stipend from the Post 9/11 GI Bill would not be allowed as effective income. This is due to the temporary nature of the income and the fact that it is not “likely to continue” in the eyes of the VA. The housing stipend has a specific end–once the GI Bill entitlement has been used up, that income is no longer available.
The reader seems to be asking if BAH paid to her as part of a separation agreement or other arrangement might count as income. This would be at the lender’s discretion and the lender would need to make a determination as to whether that income was likely to continue–how long the income has been received may play a role in that determination.
It’s impossible to speculate what an individual loan officer might decide, but it’s important to know that a determination must be made–acceptance or rejection of such income is never automatic.
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