A military service casualty impacts surviving spouses and their families in many ways. For surviving spouses, the VA provides many benefits including the federal home loan guarantee. A surviving military spouse may be eligible for a VA-guaranteed mortgage if:
- He or she survived a veteran who died in service or from a service-connected injury and has not remarried
- He or she survived a service person missing in action (MIA) or a prisoner of war (POW) (this benefit is limited to one-time use)
Qualifying surviving spouses can use their VA home loan benefits over and over again as long as they have ample entitlement. Generally, full entitlement will provide a VA-eligible borrower with the government backing on a loan of up to $417,000 (more in some high-cost U.S. counties).
The home loan benefits for surviving spouses provided by the VA are much like those received by veterans and active duty military personnel; although there are notable differences.
- Qualified surviving spouses are exempt from the VA funding fee which is between .5 and 3.3%
- A spouse who obtained a joint VA mortgage with a veteran prior to the death, regardless of whether the death was duty related, may be eligible for a VA Streamline refinance (the surviving spouse need not be VA-eligible)
When a surviving spouse repays a VA mortgage in full and disposes of the real estate property, he or she may have entitlement restored and use the program again and again (MIA and POW survivors are limited to one use). Restoration of entitlement can be obtained by submitting VA Form 26-1880 to the Department of Veterans Affairs.The advantages of VA loans for surviving spouses include:
- No down payment/100% financing
- No private mortgage insurance (PMI)
- No VA funding fee
- Relaxed qualifying standards
- Competitive interest rates
- No penalties for mortgage pre-payment
- Cash-out and debt consolidation
- VA Streamline refinance (even for some spouses who are not VA-eligible)
For more information about VA loans for surviving spouses, contact an experienced VA mortgage professional.