Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 23, 2012

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Unfortunately, service members of the National Guard and Reserves are not immediately eligible for military loans.

Active duty military members are eligible for military mortgages if they have received an honorable discharge. After 90 days of continuous active duty service military members are eligible for a military loan.

In contrast to this, members of the National Guard or Reserves must serve six years in order to be eligible for a mortgage guaranteed by the government. Fortunately, other options are available for members of the National Guard and the Reserves.

A home loan from the HUD or FHA may be the best option for a veteran of the National Guard or Reserve. Borrowers of FHA loans may be able to apply for a VA refinance loan. Mortgages from the HUD and FHA are similar to military loans in some respects since all three are guaranteed by the government. HUD and FHA loans can later be refinanced into military loans once a member of the National Guard or Reserves has served the required six years. Under this strategy a borrower can obtain a home loan and then later turn it into a military home loan.

Members of the National Guard or Reserve who are approaching their six year anniversary in the service should consider waiting in order to acquire eligibility for a military loan. These mortgages offer a huge amount of benefits to their borrowers.

Military loans offer good interest rates, lower down payments, and a large amount of assistance in the event of default. That assistance includes mediation and financial advising, a luxury that typical borrowers usually go without. Likewise, since these loans are guaranteed by the government, lenders face less risk in lending them to veterans. However, National Guardsmen and Reservists should understand that simply serving for six years is not the only requirement necessary to borrow a military mortgage.

Interested applicants must also ensure that their credit is up to par with lenders’ requirements. Even though military home loans permit lower credit scores that does not mean that all applicants qualify or that the requirements of specific lenders do not matter. Likewise, a borrower’s debt-to-income ratio is important. A debt-to-income ratio is the balance between how much income a borrower earns compared to the borrower’s outstanding debts. Lenders are more inclined to reject high-debt and low-income applicants.