Expanded VA Loan Eligibility for National Guard

With the passage of the Veterans Health Care and Benefits Improvement Act, National Guard troops will have expanded access to VA loan benefits.

The Act is an omnibus bill, which includes new laws in a variety of areas. The legislation is not meant to address a single issue or a single set of issues under one department. The Act is over 340 pages, and the section addressing expanded VA home loan options for Guard troops is comparatively short when viewed against the entire Act.

National Guard VA Loan Options

Before this law was passed, National Guard members had to meet one of the following requirements to qualify for a VA loan:

• Complete at least six years of honorable service
• Serve at least 90 days of active duty
• Be discharged due to a service-connected disability

The updated law, passed in early 2021, expands eligibility by recognizing more types of National Guard service. Under the new rules, members may qualify with:

• At least 90 cumulative days of full-time National Guard duty
• Including at least 30 consecutive days

These changes also apply retroactively, meaning qualifying service performed before the law was enacted may count toward VA loan eligibility.

Qualifying Military Service

To qualify under the updated rules, National Guard service must be considered active service, which generally falls into two categories: Title 10 and Title 32.

Title 10 Service

Title 10 refers to full-time federal active duty, such as deployments during wartime (including travel to and from duty), excluding training.

Title 32 Service

Title 32 includes full-time National Guard duty funded by the federal government, such as responding to national emergencies or serving as an Active Guard Reserve (AGR) member.

Eligible Title 32 service may include:

• Required drills and field exercises
• Participation in training exercises
• National Guard schools or competitions
• Certain federally authorized duties under U.S. law

However, State Active Duty does not qualify. When Guard members are activated by a governor for state-specific missions, this service is funded at the state level and is not considered eligible for VA benefits.

Notably, many National Guard members who supported COVID-19 response efforts served under Title 32 orders, allowing them to meet VA loan eligibility requirements under the updated law.

What Motivated The Changes

While there isn’t a lot of information here, the changes in favor of National Guard troops is a significant step in reducing a “benefits gap” between full-time Guard duty and the active duty equivalent. Many feel that Guard benefits should better reflect the sacrifices asked of these troops when called upon to serve.

The Congressional Budget Office issued a Cost Estimate document for this measure, which included a paragraph indicating the office expects some 2,000 Guard troops to take advantage of the expanded VA loan program over a ten-year period.

What You Should Know About VA Home Loans

Expanded VA loan access gives National Guard members the opportunity to buy a home with no down payment, limited closing costs and more flexible credit requirements thanks to the VA’s loan guarantee. Borrowers are also protected from certain fees, such as lender legal costs and prepayment penalties.

VA loans also offer flexible refinancing options through the VA Streamline Refinance (IRRRL), which must provide a clear benefit, such as:

• A lower interest rate
• A lower monthly payment
• Switching from an adjustable-rate to a fixed-rate loan

For many National Guard members, these benefits make VA loans a more accessible alternative to conventional financing, especially for those who may struggle with higher down payment requirements.