VA loans

VA Loan Rules For Non-Military Employment Income

October 15, 2012

VA Loan Rules For Non-Military Employment Income

VA borrowers who are still serving on active have a comparatively easy time verifying income and employment.

That’s not to say they don’t have paperwork to fill out and details to provide, but anyone serving on active duty has the benefit of electronic Leave and Earnings Statements, physical hard copies of same, and other proofs of employment such as a valid military ID card and military references.

Those who aren’t serving on active duty have a bit more to provide when it comes to verifying employment income. What does the VA Lender’s Handbook say about furnishing proof of non-military income and what is your lender required to do with the information you provide?

According to Chapter Four of VA Pamphlet 26-7, the lender must:

“Verify a minimum of 2 years employment.

If the applicant has been employed by the present employer less than 2 years:

  • Verify prior employment plus present employment covering a total of 2 years,
  • Provide an explanation of why 2 years employment could not be verified,
  • Compare any different types of employment verification obtained (such as, Verification of Employment (VOE), pay stubs, and tax returns for consistency), and
  • Clarify any substantial differences in the data that would have a bearing on the qualification of the applicant.”

Notice that there is no statement anywhere in the above quote that says you cannot get a VA home loan without two years of employment. The VA requirements simply instruct the lender to explain why two years of employment from non-military sources cannot be verified. In some cases this is because the military member recently separated from the military or retired. In other cases it may be due to school or training.

Don’t assume that you can’t qualify for a VA mortgage just because you don’t have two years of non-military employment on your record yet. Let the lender make a determination based on your specific circumstances and background.

Do you have questions about VA home loans? Ask us in the comments section.


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