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Veterans Benefits: The VA Home Loan

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Veterans Benefits: The VA Home Loan

Contributed by Alan Rohlfing

 

As members of the United States military community, we know that we have a host of benefits available to us, whether we give much conscious thought to it or not. Most of our benefits are administered by the Veterans Benefits Administration, an agency of the U.S. Department of Veterans Affairs that’s responsible for the Department’s programs that provide financial and other forms of assistance to Veterans, their dependents, and survivors. Eligibility for most VA benefits is based upon discharge from active military service under other than dishonorable conditions.

We’re most familiar with those programs that impact us personally. So many of us are well-versed in those benefits available in the healthcare arena, or in compensation and pension, or in education and training. Or perhaps it’s the insurance products, such as SGLI and VGLI, that resonate with you, or maybe it’s the burial and memorial services for which you qualify. The Veterans benefit that we’re going to spend a few minutes on now, however, is one that has a phenomenal impact on those that choose to use it…and that’s the VA home loan.

Long story short: VA direct and VA-backed Veterans home loans can help Veterans, service members, and eligible surviving spouses become homeowners (and buy, build, improve, or refinance a home). Created in 1944, the VA home loan program was part of the original Servicemen’s Readjustment Act. Also known as the GI Bill of Rights, it was signed into law by President Franklin D. Roosevelt and was considered to be part of sweeping legislation aimed to level the playing field for those who served our country during World War II. Homeownership was at the heart of those efforts, and rather than provide Veterans with a cash bonus to help with the purchase of a home, the government decided a loan guarantee was a more powerful, long-term solution. Early on, the VA guarantee was limited to 50 percent of the loan amount, not to exceed $2,000. The average home price in 1944 was about $8,600. Loans had a 4 percent interest rate cap, and the term couldn’t exceed 20 years. All loans required VA approval.

So, what’s the big deal with the VA home loan program? Well, VA loans are some of the only loans around that offer no down payment (with more conventional loans, the buyer is required to provide up to 20% down); there’s no private mortgage insurance (PMI), which can save a borrower hundreds of dollars a month over conventional loans; there is a 2-3% funding fee, but not everyone has to pay that fee (such as those with a service-connected disability); and the loan limits are pretty generous. Beginning this year, there is no maximum amount for which a home buyer can receive a VA loan, but lenders may set their own limits.

As a rule, the VA isn’t a bank or a mortgage company (except for the Native American Direct Loan Program). VA Home Loans are provided by private lenders and the VA guarantees a portion of the loan…if a VA-backed home loan goes into foreclosure, the guarantee allows the lender to recover some or all of their losses. This lets the lender view the transaction as a little less risky and give the borrower more favorable terms.

As with most benefits programs, there are some pretty tight eligibility criteria. Who’s eligible for this VA program? Well, surprising to some is that VA loans are available not only to Veterans, but also other classes of military personnel. The list of eligibles includes active-duty Servicemembers, members of the National Guard & Reserve, surviving spouses of Veterans, and a few other groups.  You’ll need a Certificate of Eligibility (COE) to demonstrate eligibility to a lender, and you’ll need to meet standard VA loan requirements, such as income and employment verifications. Just because you have a COE, however, doesn’t mean you’re guaranteed a VA loan; it just shows the lender that you’re eligible for the VA guarantee. You can obtain a COE through eBenefits, by mail, and often through your lender. Another good thing is that your eligibility never expires…Veterans who earned their benefit long ago are still using the program to buy homes.

There are several different financial products in this broad Veterans benefit. VA-guaranteed loans are available for homes that Veterans purchase for primary occupancy or to refinance, such as the Interest Rate Reduction Refinance Loan (IRRRL). The IRRRL is generally performed to lower the interest and reduce the monthly payment on the existing VA guaranteed loan. There’s also the Native American Direct Loan (NADL) Program, which helps Native American Veterans purchase, construct, improve, or refinance a home on Native American trust lands; and the Adapted Housing Grants program, where the VA helps Veterans with certain total and permanent disabilities related to military service obtain suitable housing.

While the particulars of the home loan benefit have changed some over the years (and who’s to say there won’t be some modification next month or next year), here are some other factoids about the program, in excruciatingly little detail:

-A VA loan can be used to buy a detached house, condo, new-built home, manufactured home or duplex, triplex or four-unit property or to refinance an existing loan for those types of properties. You might also be able to borrow extra money to make repairs or improvements to the home; or, make it more energy efficient;

-You cannot use a VA loan to buy a home in a foreign country. You are only permitted to purchase homes located in the United States or a U.S. territory or possession;

– You can’t use a VA loan to buy a rental property, but you might be able to use a VA loan to refinance an existing rental home you once occupied as a primary home. An exception to this rule is the IRRRL, which can be used to refinance an existing VA loan for a home where you currently live or where you used to live, but no longer do;

– Federal regulations do limit loans guaranteed by the Department of Veterans Affairs to “primary residences” only, however, “primary residence” is defined as the home in which you live “most of the year;” and

– Lenders follow VA standards when making VA-backed home loans, such as requiring a high enough credit score or getting an updated home appraisal (an expert’s estimate of the value of your home). The VA does not set a minimum score for home loan approval, but experts say most lenders will require a score of 620 or higher.

I first used this benefit in the early 1990s, and I still have a VA-backed home loan today (different house, different loan). I’ve always viewed it as a great way to transition from home renter to homeowner, but I get that it’s not for everyone. If owning your own home is something you plan on experiencing in the near future, I encourage you to take a closer look at a VA home loan. I’ve read that the VA has backed somewhere in the neighborhood of 25 million home loans, and the program just turned 75 years last spring…I doubt it’s going away anytime soon. If you’re eligible for this benefit, it can help deliver the joys of home ownership to your doorstep, too.

 

Being Military Friendly

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Reflections on the Value of Being Military Friendly

Contributed by Alan Rohlfing

 

What does the term “military friendly” even mean? It wasn’t really a thing in the 80s. Not in the 90s, either. I seem to recall that it all started 10 or 15 years ago, this effort by organizations to be known as military-friendly to its customers. It’s kind of an ambiguous term, many times without much concrete detail…so it begs the question: what value does that term hold for those of us from the military community?

When we talk about a company or organization being military- or Veteran-friendly, it always seems like they fall into one of three groups: stores, schools, or employers. And while some of us get to feel the love from one of those groups just about every time we get out to run some errands, with the others we may not give it much thought if we aren’t a college student or working for some national, top-notch workforce. But let’s take a deeper dive into each of these groups, if only for a moment…

The stores. Being labeled as military-friendly in the retail environment almost always means that the store (brick and mortar or online) offers some kind of military discount. That discount usually falls in the neighborhood of 10 percent off, but there are certainly exceptions and caveats to that. Some stores offer those discounts all year long, some only on certain days of the week (Tuesdays seem to be the popular choice), and still others offer up their discounts only on major holidays, like Veterans Day or Memorial Day. Some offer their discounts only to those still actively serving, and others make their offer to both active and retired members of the US Armed Forces.

Examples abound of local, regional, and national companies that give 15-20% off, but then again, some cap it at 5%. Some companies offer up a ‘free shipping’ discount, and there’s even a cellular service provider (or two) that have a special rate plan for military folks.

Being eligible for the discount depends on the company, and sometimes it feels like we have to jump through many hoops to qualify. You may only have to show a copy of your military ID or DD-214, but some will require eligibility verification through platforms like ID.me, a service that simplifies how individuals securely prove and share their identity online (but even some brick and mortar stores require registration with them, too).

Long story short – whether you find yourself in your neighborhood big box store on a weekly basis or you only take advantage of 10% off a cup of coffee every now and then, you can save a tidy sum of money over the course of a year by ‘redeeming’ your military discount. And if you aren’t sure whether a place at which you’re doing business offers one, it doesn’t hurt to ask…some businesses don’t advertise the discount (I’m just not sure why they wouldn’t).

The schools. By that, I mean colleges and universities that offer certificate- and degree-producing programs, and there are variable criteria for them earning the military-friendly tag. After so many of us went back to college upon earning our GI Bill benefits in the 2000s and 2010s, and especially after the rash of school failures that left many student Veterans high and dry – there’s been a very concerted effort to set, measure, and publish standards for all of us to use in our “where should we study” decision making process.

Military Friendly ® is a group that does just that, by evaluating over 8,000 schools on benchmarks that measure an institution’s commitment to its student Veteran population in graduation rate, retention rate, loan default rate, and job placement rate. Check out their latest list of military-friendly schools here.

The workforce. This is a really subjective one, because how we feel about our places of work typically depend on much more than whether they meet a few military-related criteria. Perhaps the most well-known list of these employers also comes from Military Friendly ®. Just as they did for colleges and universities, the group organizes a yearly list of Military Friendly Companies and Military Spouse Friendly Employers.

If you work for a company that hasn’t “made the list,” what does that mean? Well, I doubt many of you will give notice and start the job search all over again, but it may make you look critically at how you can improve upon your employer’s culture. Most of the people who might find value in a list of military-friendly companies, though, are undoubtedly job-seekers, and I know more than a few over the years who have actively sought work with a verified, certified  military- and Veteran-friendly employer.

 

National lists like those don’t account for many of the smaller, more local companies; if you’d still like to size up your own workplace, here are some things you might consider: Has the company taken on a specific hiring initiative? Do they reach out to separating Service members  and Veterans Service Organizations, looking for job-seekers? Do they have an onboarding program specifically for those from the military community? Do they have Veterans groups in-house already? Do they welcome members of the National Guard and Reserve to their workforce, and keep their families close when deployments crop up? These ‘criteria’ aren’t from any official list, but they’re a good start…

 

At the end of the day, whether or not you find any substantive benefit from an organization claiming to be military-friendly, know that there’s still a ‘sea of goodwill’ out there. If it’s only to get a free meal on a national holiday, or 10% off my home improvement supplies, or to try and get on with an employer that really understands the military community…I appreciate the gesture, and I imagine most of you do, too.

 

The Veterans Service Organization

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The Veterans Service Organization

Contributed by Alan Rohlfing

 

The Veterans Service Organization has long been a part of the American landscape. For many of us, the groups that fall in this particular category have been recognized as cornerstones in our communities for decades. We grew up in their halls, going to all-you-can-eat pancake breakfasts in the morning and playing bingo at night.

Some of them host karaoke and trivia nights, while others focus on baseball or dart leagues. By and large, though, they all have a higher purpose that resonates with those of us in the military community…and that’s to serve.

There are many – oh, so many – organizations that seemingly help with Veterans’ causes. A quick Google search of Veterans Service Organizations (VSO, for short) yielded about 156,000,000 results in 1.07 seconds. I don’t mean to imply that there are 156 million such groups, but you’ll probably need to dig a little deeper to really see what your options are.

Most of these organizations compete with each other – for members, for publicity, and for money. It seems they’re all vying for that federal grant, or that private foundation award, or for your hard-earned twenty bucks. Some have a great track record of using those donated dollars wisely, and others not so much, but you’ll have to decide where that ranks for you, when choosing where you should donate your time, talent, or treasure.

So, if you’re looking to connect with one, you’re going to have to wade through more than just the first few pages of your vague online query to find your next VSO home. Narrow your search a bit more…are you looking for one that’s local, regardless of their national footprint, or do you need a group to be Congressionally chartered before you’ll support it? Maybe you’re looking for one (or more) that has someone that can help with processing a VA claim.

If that’s the case, then that’s a whole other search, and an entirely different article. The other VSO is an acronym for Veterans Service Officer, not Veterans Service Organization. A VSO, in that sense of the word, can help you with the preparation, presentation, and prosecution of claims...and can be worth their weight in gold, if they know what they’re doing. Connect with a good VSO (organization) and they’ll help connect you with a good VSO (officer).

Getting back to your search for the right Veterans Service Organization, a really good place to start is the US Department of Veterans Affairs’ 2019 Directory of Veterans and Military Service Organizations. Found at va.gov/vso, this particular listing is provided as an informational service and is arranged in five parts: 

  • Part I is a listing of Congressionally chartered Veterans Service Organizations that are also recognized by the Department of VA Office of General Counsel for the purpose of preparation, presentation, and prosecution of VA claims;
  • Part II is a listing of Veterans Service Organizations that are Congressionally chartered but that are NOT recognized by the VA for the purpose of preparation, presentation, and prosecution of Veteran’s claims;
  • Part III is a list of Veteran organizations that are not Congressionally chartered but that are officially recognized by the VA for the purpose of preparation, presentation, and prosecution of Veteran’s claims; 
  • Part IV lists those Veteran organizations that are neither Congressionally chartered nor officially recognized by the Department of Veterans Affairs for the purpose of preparation, presentation, and prosecution of Veteran’s claims, but that represent the interest of American Veterans; and
  • Part V, a section focused on Intergovernmental Affairs and official resources at the state level.

I could take up a lot of digital real estate listing out some of these groups, but I won’t do that here. Just know that most of the organizations you’ve already heard of are on this list, as well as many of the ones you haven’t…from The American Legion, VFW, and DAV, to The Mission Continues and The National Association of Atomic Veterans. If this directory is still a little too much, get in touch with your state’s Department or Commission on Veterans Affairs and let them help you navigate these waters.

So, I challenge you to get involved. Join one or two Veterans Service Organizations whose mission connects with you. Whether you’re joining to start really giving back to the military community, or for the camaraderie and sense of belonging, I think you’ll be glad that you did.

Until next time…

Veterans’ Preference in the Job Search

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Veterans’ Preference in the Job Search

Contributed by Alan Rohlfing

 

If you’re part of the Military community and you’ve spent any time at all looking for a job, you’re probably at least vaguely familiar with the term “Veterans’ Preference.” For most of us, though, that’s the extent of it…we have a vague familiarity with the words, something that gives us a conceptual warm and fuzzy, but we’re not quite sure why.

Simply stated, Veterans’ Preference is a policy that may allow an applicant to receive preference in the hiring process over non-Veterans. State and local public-sector programs and companies in private enterprise may have their own preference policies in place, but for the rest of this post, we’ll be talking about Veterans’ Preference in the federal jobs environment.

According to OPM (the US Office of Personnel Management that serves as the country’s chief Human Resources agency and that oversees its federal hiring processes), Veterans of the US Armed Forces have been given some degree of preference in appointments to federal jobs since the Civil War. Veterans’ Preference was used to “recognize the economic loss suffered by citizens who have served their country in uniform, restore Veterans to a favorable competitive position for Government employment, and acknowledge the larger obligation owed to disabled Veterans.” In its current form, the policy has its roots in the Veterans’ Preference Act of 1944 (codified in Title 5, United States Code).

If you really want to do a deep dive on the subject, you should supplement your education with a visit to OPM’s web page for HR professionals at https://www.opm.gov/policy-data-oversight/veterans-services/vet-guide-for-hr-professionals/. While you’re there, you’ll find that, by law, preference in hiring “applies to permanent and temporary positions in the competitive and excepted services of the Executive branch,” but that the Legislative and Judicial branches of the Federal Government are exempt, unless made subject to the Veterans’ Preference Act by some other law. If you find yourself longing for more on the topic, I’d also visit https://www.fedshirevets.gov/job-seekers/veterans-preference/. You’ll be able to really get in the weeds about when preference applies and the type you’re eligible for, which we’ll just touch on here and now…

Types of Veterans’ Preference (Federal level). Veterans’ Preference eligibility can be based on dates of active duty service, receipt of a campaign badge, receipt of a Purple Heart, or a service-connected disability, but know that not all active duty service qualifies for Veterans’ Preference. Only Veterans discharged or released from active duty under honorable conditions are eligible for veterans’ preference. Military retirees at the rank of Major, Lieutenant Commander, or higher are not eligible for preference in appointment unless they are disabled veterans (but this doesn’t apply to gray-area retirees, those Reservists who won’t draw military retired pay until age 60.) There are three types of preference eligibility: sole survivorship (0-point preference), non-disabled (5-point preference), and disabled (10-point preference). Here are a few of the details:

…0-point preference eligibility. You were released or discharged from a period of active duty from the armed forces, after August 29, 2008, by reason of being the only surviving child in a family in which the father or mother or one or more siblings: 1) Served in the armed forces, AND 2) was killed, died as a result of wounds, accident, or disease, is in a captured or missing in action status, or is permanently 100 percent disabled or hospitalized on a continuing basis (and is not employed gainfully because of the disability or hospitalization); WHERE the death, status, or disability did not result from the intentional misconduct or willful neglect of the parent or sibling and was not incurred during a period of unauthorized absence. (While no points are added to a scored application for 0-point eligibles, they are listed ahead of non-preference eligibles with the same score or in the same quality category.)

…5-point preference eligibility. You served on active duty in a war, campaign or expedition for which a campaign medal or badge has been authorized; OR for more than 180 consecutive days, other than for training, during various periods of time over the last 65 years or so. (I refer you back to the OPM webpage earlier in this post for the exact dates.)

…10-Point preference eligibility.  You served at any time, AND 1) you have a service-connected disability, OR 2) you received a Purple Heart.

How Veterans’ Preference is applied & other things you’ll need. When applying for Federal jobs, eligible Veterans should claim preference on their application or resume; when agencies use a numerical rating and ranking system to determine the best qualified applicants for a position, an additional 5 or 10 points are added to the numerical score of qualified preference-eligible Veterans. When claiming Veterans’ Preference, you’ll typically need to provide a copy of your DD-214, Certificate of Release or Discharge from Active Duty, or other acceptable documentation. Applicants claiming 10-point preference will usually need to submit form SF-15, Application for 10-point Veterans’ Preference, or other acceptable documentation (such as a letter from the VA that contains details on dates of service, discharge status, and disability rating).

 

The informal feedback I’ve received over the last decade indicates that most of us in the general population of job seekers have mixed feelings about Veterans’ Preference. I, for one, appreciate the gesture our national leadership put in place all those years ago, but I can’t say as I’ve ever benefited from being awarded those preference points in the application process. I’ve heard many folks say they’ve applied to countless position and (even with points applied) have never even been called for an interview, and therefore are less than enamored with the policy. Still others make no bones about their dislike and distrust of the process, believing that nepotism and the ‘good old boy’ system is still alive and well, regardless of what OPM has to say.

My take is that you’d have to have a look deep under the hood to gauge whether or not Veterans’ Preference in the federal hiring arena has had the kind of impact its writers had hoped it would. But if you’re applying for a position or a program that uses Veterans’ Preference and you’re eligible, I encourage you to use it to your advantage – you’ve earned it. Remember that Veterans’ Preference doesn’t guarantee a job to those that qualify, and it typically doesn’t apply to internal agency actions like promotions, transfers, reassignments, and reinstatements.

Personally, I never thought Veterans’ Preference would be that ‘X’ factor that got me the job, but rather that it might be what gives me that competitive edge one day, and propels me to the interview phase of the job search. And here’s hoping that it will for you, too.

Until next time…

 

 

Major Events in October with Free Tickets for Service Members, Veterans, and Families

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By Debbie Gregory.

Veteran Tickets Foundation (VetTix), a national 501(c) 3 nonprofit founded by veterans, is dedicated to supporting and honoring the U.S. military community, veterans and their families.

Vet Tix has provided veterans, service members, caregivers and the family members of those killed in action with more than three million free tickets since 2008. Events include major sports games, concerts and a diverse mix of other ticketed activities. And because they’re a non-profit, individual ticket holders and businesses can receive tax deductions for their donated tickets.

So, if you’re looking for some fun things to this month, check out Veteran Tickets Foundation.

Here are just some of the hundreds of events available at VetTix.org.:

October 7: Denver, Colorado: Rocky Mountain Audio Fest

October 7: Houston, Texas: Houston Museum of Natural Science

October 8: Peekskill, New York: Buddy Guy – Live in Concert

October 13: San Diego, California: Top Gun Party and Movie Night

October 14: Hagerstown, Maryland: Bach to Beethoven and Beyond!

October 14: Fresno, California: Fresno State Bulldogs vs. New Mexico Lobos NCAA Football

October 14: Bloomington, Indiana: Indiana University Hoosiers vs. University of Michigan Wolverines NCAA Football

October 14: Durham, North Carolina: Duke University Blue Devils vs. Florida State Seminoles NCAA Football

October 21: Manchester, Maryland: Autumn Armageddon 2017 – Live Professional Wrestling Presented by Maryland Championship Wrestling

October 21: East Lansing, Michigan: Michigan State Spartans vs. Indiana Hoosiers

October 22: Peekskill, NY: Steve Solomon’s My Mother’s Italian, My Father’s Jewish and I’m in Therapy

October 27: Washington, DC: Washington International Horse Show 2017 – Military Night

October 28: Richmond, Virginia: University of Richmond Spiders vs. Stony Brook Seawolves NCAA Football Homecoming

October 28: Rosemont, Illinois: Chicago Wolves vs. Milwaukee Admirals AHL

To become a Vet Tixer and request tickets to these and hundreds of other events, which are free except for a very small delivery fee, visit VetTix.org to create a free account. Once you’ve created an account and verified your military service, you can review hundreds of upcoming events across the country.

Military Connection salutes and proudly serves veterans and service members in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve,  and their families.

 


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