Q: My husband recently passed away after a long illness. He was disabled but his death was not a direct result of his disability. I want to downsize our home now that he’s gone and I’m not sure if I’m eligible to use his VA loan benefits. Can you help me?
A: The Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012 extends home loan benefits to more surviving spouses who pay the ultimate price for service. One way to honor this sacrifice is to make VA loans available for more military widows and widowers.
The new law recently expanded VA loan eligibility to more surviving spouses. As of August 6, 2012 military widows and widowers may be eligible for VA home loan benefits if:
- Spouse died as a result of serving in the military, or
- Spouse died of a service-connected disability, or
- Spouse died of any cause, was continuously rated totally disabled for a period of time determined by the VA and was eligible for disability compensation at the time of death
Before the Act was signed, only surviving spouses of veterans who died in service or from duty-related causes were eligible for VA loans. Now, eligibility has been expanded to include surviving spouses widowed by some disabled veterans who died of any cause. To qualify, a veteran must have been eligible for VA disability compensation at time of death and continuously rated totally disabled for:
- 10 or more years prior to death, or
- 5 or more year from date of discharge, or
- 1 or more years prior to death after 9/30/99 for POWs
VA Home Loan Benefits for Surviving Military Spouses
Generally, VA home loan benefits are for surviving military spouses who have not remarried.
Surviving spouses who are eligible for VA home loan benefits may obtain government-backed mortgages of up to $417,000 (more in certain high-cost counties). The advantages of VA loans can make them more attainable, and under certain circumstances, more affordable, than other mortgage programs. Surviving spouses can expect:
- VA Funding Fee Waivers
- $0 Down Option on Purchases up to $417,000
- 100% Loan to Value on Refinances May Be Possible
- No Monthly Mortgage Insurance Premiums
- Low Interest Rates that are Nationally Competitive
- No Penalties for Early Payoff or Balance Reduction
- VA Streamline Refinancing (for surviving spouses with or without VA loan benefits)
Surviving spouses who may not have been eligible in the past may qualify per the new law improving veterans’ benefits eligibility requirements. If you have questions about this topic, post a comment below.
Tim Lewis started working with iFreedom Direct® in 2008. He is group sales manager in the Purchase Division overseeing 16 VA loan professionals. Tim is a former Army Major and Veteran of Operation Iraqi Freedom. His 22-year military background along with his vast knowledge of the VA Home Loan Guaranty Program helps ensure the purchase clients of iFreedom Direct® have an experience that exceeds their expectations.