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ARLINGTON, Va. — The Department of Veterans Affairs wants activated reservists to know that due to their activation, they need only three months’ service, and not six years, to qualify for the VA’s home-loan benefit.

Since 1992, the VA has offered its no-down payment home-loan program to Reserve and Guard members, eligible to apply after they had served six years. But if they are called to active duty, the service time is cut to 90 days, said Keith Pedigo, director of the VA Loan Guaranty Service.

“The requirement for those who are not on active duty is they must serve six years in the active selective Reserve or Guard. After six years of people doing their summer camps [training and weekend duties], they earn enough points to qualify. For those Reservists and National Guard members who are called to active duty, once they’re on active duty, we qualify as regular active servicemembers.”

As of Wednesday, the total National Guard and Reserve members on active duty was 150,714. The total number on active duty for the Army National Guard and Army Reserve is 123,695; Naval Reserve, 2,904; Air National Guard and Air Force Reserve, 11,472; Marine Corps Reserve, 11,097; and the Coast Guard Reserve, 1,546.

Troops who logged fewer than 90 days of activated service but who were discharged because of a service-connected disability still are eligible to apply, he said.

“The reason most veterans go this route is because it affords them the opportunity to buy a home without having to make a down payment,” Pedigo said.

Each year, about 15 percent of the VA’s loans are guaranteed to active-duty personnel, and about 4 percent are guaranteed for Guard and Reserve members who qualify after their six years of service. The remainder goes to veterans.

In the past three years, the department guaranteed 1.1 million loans for a total of $134 billion. Last year, the VA guaranteed 490,000 loans totaling $64 billion, Pedigo said.

This year, however, they predict a slowdown, to about 350,000 loans.

“We’re projecting it will be down from last because the refinancing boom has quieted down.”

About 67 percent of the VA loans guaranteed last year were due to members refinancing at lower interest rates. The average interest rate reduction was 1.5 percent, and a benefit to refinancing through the VA is that members don’t have to pay out-of-pocket expenses such as appraisal or broker fees.

The VA’s foreclosure rate last year was 6.8 percent, higher than the 3 percent of the conventional loan market, but lower than the federal Housing and Urban Development’s FHA program of about 10 percent.

“By virtue of the fact that there is no down payment required, the foreclosure rate tends to be higher than the conventional loan market,” Pedigo said. “It’s the riskier part of the business. Making no down payment means you don’t have the instant equity in the property and you’re generally in a riskier position.”

The VA has several programs to help keep homeowners from losing their homes, including nine regional loan centers in the United States that offer financial counseling and payment consolidation efforts.

The VA program is available only for home sales within the 50 U.S. states and the territories of Puerto Rico, U.S. Virgin Islands, American Samoa, Northern Mariana Islands and Guam.


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