Do Military Families Get Better Mortgage Rates?

Chelsy Meyer  | 

The short answer is yes, military families do get better mortgage rates. However, just being in the military isn’t enough to qualify for these perks. You also have to have good credit, a good debt-to-income ratio, and residual income. Lending to anyone is always a risk, and lenders always want some reassurance that they will be repaid. Military borrowers must still go through an application and qualification process, even if there are better terms available to them.

There’s a ton of resources available to help military families find a home, as well as a slew of loan options. Military families are offered many perks for their service, including better mortgage rates, due to the complicated (and sometimes dangerous) nature of a military career and the country’s desire to make sure military families have comfort and security. There are requirements to meet, but generally there are ways to make sure servicemen and women can easily purchase a home.

Homeownership Benefits

Whether each service member is active, overseas, or a veteran, the military has paved a path virtually free of complications to allow them to own a home. Homeownership is an amazing accomplishment for any family, and for military families, there are benefits associated with owning a home with military status and using a VA loan program:

  • No down payment required – Buying a home involves saving money, which can be easier within a military career, but with a military home loan you won’t have to come up with the usual down payment.
  • No mortgage insurance – Many conventional loans require mortgage insurance, but military home loans do not.
  • Lower average interest rates – With interest rates being lower than average, homeownership is easier to afford and sustain.
  • Limits on closing costs – A military home loan limits closing costs for you as well, taking away one more cash variable to home buying.
  • Lenient credit requirements – You do have to prove a semblance of good credit for any loan, including a military home loan, but the requirements are much more lenient for a military home loan than a traditional loan. Thankfully, many aspects of a military can help your credit score, but if yours isn’t perfect you aren’t automatically rejected.  

Loan Options

The VA loan program is not a program designed just for veterans, it’s also meant for all types of military personnel. The VA loan program is responsible for home loan options designed to make owning a home possible for all military service members and their families. Getting a military loan with bad credit isn’t impossible, and the home loans available through the military is an example of that. The reason for this is because, despite having bad or low credit, a military career is a secure paycheck in many cases. There are loans designed for veterans running small businesses, personal loans, and home loans all designed for those that have served our country – though not all of them are offered through the VA.

Meeting the Requirements

Despite the lenient requirements for a VA home loan, the added advantages, and the loan being designed specifically for military personnel, there are still a few requirements. Before deciding on buying a home, be sure you are able to meet the requirements:  

  • Occupancy – The homebuyer or spouse and children will need to occupy the home full time, this makes it so these home loans are used for primary homes, not to buy vacation homes.
  • Service requirements – You have to have served in the military to qualify for these loans. Typically, the requirements are 90 consecutive days active duty during wartime,  181 consecutive days active duty during peacetime, or 6 years in the National Guard or Reserves.
  • Power of Attorney – Since there are occupancy requirements, this may be tricky for deployed soldiers. Power of attorney paperwork is one way to make homeownership possible even for those that are deployed.

The other requirements for getting a military home loan with better mortgage rates than the average civilian differ based on each circumstance. However, you’ll basically need to have money saved, acceptable credit (what is considered acceptable varies), a good debt-to-income ratio, and residual income. Again, residual income is not often an issue for active members despite some saying that some active members are paid less than minimum wage. In truth their income is steady, stable, and they are given housing allowances making them better than the average person asking for a loan.

Military members are often sent away from their families, required to move around a lot, or deployed in dangerous conditions. Their job is physically, mentally, and emotionally demanding. Their families ride the roller coaster of emotions as well, and for that reason, military personnel are given many advantages as a thank you for serving their country. One of those advantages is better mortgage rates under the VA loan program. There are also other benefits to this program, other loan options, and limited requirements to meet in order to qualify. This way, military service men and women have more access to the security of a home that they own when they are able to be with their families.


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Chelsy is a writer from Montana who now lives in Boise, Idaho. She graduated with her journalism degree from the University of Montana in 2012. She enjoys talk radio, cold coffee, and playing Frisbee with her dog, Titan. Follow Chelsy on Twitter @Chelsy5

This post was updated August 28, 2017. It was originally published September 3, 2017.