Understanding VA Loan Eligibility for Retired Veterans

March 11, 2024 - 6 min read

As you approach retirement, a world of possibilities can open up. For example, there’s often more time to enjoy hobbies and other interests, and you might even look into a second career.

Additionally, some retirees enter this stage of life celebrating the end of mortgage payments, whereas others downsize or relocate to a new city altogether.

But what if you no longer have a steady paycheck, or you’re transitioning to a fixed income? Does it become tougher to qualify for a VA loan?

Verify your VA loan eligibility. Start here

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Can you get a VA loan if you’re retired?

One common question that comes up during retirement is: Can you use a VA loan after you get out of the military?

The answer is a resounding yes.

Verify your VA loan eligibility. Start here

Although retired veterans might no longer receive active-duty pay, they still have access to a range of VA loan benefits, including mortgage programs.

Understanding the benefits available to you is key as you navigate homeownership after retiring. VA loans offer numerous advantages, such as a competitive interest rate, refinancing options, zero down payments, and lenient credit requirements. For retirees with fixed or limited income streams, these benefits can make homeownership more accessible and affordable.

Whether downsizing to a smaller, more manageable property or relocating to a popular retirement destination, you can utilize VA benefits to get favorable financing terms.

Checking your VA mortgage eligibility

Understanding VA loan requirements is the first step to securing a mortgage after retiring. Eligibility is based on several factors, including the length of your service and whether you received an honorable discharge.

Minimum service requirements typically involve serving for 90 consecutive days during wartime or 181 days during peacetime, as well as six years of service for National Guardsmen and Reservists.

It’s important to review your discharge paperwork carefully and consult with a VA representative for clarification, if needed.

Verify your VA loan eligibility. Start here

Qualifying for a VA loan using retirement income

Qualifying for a VA loan requires understanding the types of retirement income and documentation accepted by VA lenders.

Acceptable income sources include pensions, Social Security benefits, other retirement income, annuities, W2 compensation, support payments, and self-employment income. Keep in mind that your income must be reliable, stable, and likely to continue for the foreseeable future.

Verify your VA loan eligibility. Start here

Be prepared to provide documentation to verify your retirement income. This can include:

  • Pension statements
  • Social Security statements
  • Retirement account statements (e.g., 401(k), IRA)
  • Annuity statements
  • Tax returns
  • Disability income documentation
  • Proof of rental income (if applicable)
  • Bank statements

When applying for a VA loan with a joint borrower, both individuals must provide income information. Even if one borrower has enough income to meet the financial requirements, mortgage lenders consider both incomes.

Borrowers must also meet the minimum 620 credit score requirement for a VA loan, as well as the occupancy requirement.

VA loan benefits

One benefit of using a VA loan in retirement is the opportunity to purchase a home with little to no down payment. This can be advantageous if you don’t have substantial savings for a down payment.

Verify your VA loan eligibility. Start here

Likewise, competitive VA loan rates can result in a lower monthly mortgage payment compared to a conventional loan. This might provide some financial relief when living on a fixed income.

Another advantage of VA loans post-retirement is the absence of mortgage insurance. Unlike conventional loans—which often require PMI when borrowers purchase without a 20% down payment —VA loans don’t charge this added expense.

This can lead to big savings over the life of the loan, further increasing affordability.

Flexibility of VA loans

VA loans offer retirees a range of options to meet their unique housing needs. This includes using the loan when purchasing a primary residence, a second home, and even an investment property (if buying a multi-family home and residing in one of the units).

Verify your VA loan eligibility. Start here

VA loans also offer refinancing opportunities through the VA’s Interest Rate Reduction Refinance Loan (IRRRL) program.

This streamlined program lets you refinance an existing VA loan and get a lower interest rate. With minimal paperwork and no appraisal (in many cases), the IRRRL simplifies the process and helps reduce housing costs in retirement.

Along with purchasing and refinancing, you can also use a VA loan to access your equity through cash-out refinancing.

You can convert a portion of your home’s equity into cash, and then use funds for home improvement, debt consolidation, etc.

The bottom line

As a retired veteran, you can use a VA loan for various housing needs, from purchasing a primary residence to refinancing and tapping your equity. Speak with a VA-approved lender to explore your options and learn how to get the most out of your VA benefits.


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Can you get a VA loan if you are retired?

Yes, retired veterans are eligible for VA loans. As long as you meet the VA’s minimum service requirement, obtain a Certificate of Eligibility (COE), and can provide proof of sufficient income, you might qualify for a VA loan. Retired veterans often find these loans advantageous due to their competitive interest rates, no down payment, and flexible credit guidelines.

How many retirement points are needed for a VA loan?

Veterans who served for a minimum period during active duty and received an honorable discharge are generally eligible for VA loans. Usually, you’ll need to have earned at least six years’ worth of points, with each year equal to at least 50 retirement points.

What are the benefits of using a VA loan as a retired veteran?

VA loans offer numerous benefits, including zero down loans, competitive mortgage rates, no mortgage insurance, and flexible credit requirements. These advantages make VA loans an attractive option for retired veterans looking to purchase a home or refinance their existing mortgage.

How do I obtain the Certificate of Eligibility (COE) as a retired veteran?

You can apply for your COE online through the VA’s eBenefits portal or by submitting a paper application through your lender. To qualify, you’ll need to provide documentation of your military service with your application.

What type of retirement income is accepted for VA loan qualification?

VA lenders accept various types of income. This includes pensions and other retirement income (401K and IRA), Social Security benefits, and annuities. You must provide documentation to verify the stability and reliability of your income (retirement account statements, bank statements, tax returns).

Can I purchase a vacation home or investment property using a VA loan after retirement?

Yes, VA loans can be used to buy a primary residence, vacation home, and a multi-family investment property (if you’re planning to live in one of the units). However, there are occupancy requirements for these types of residences. You’ll need to certify that you intend to occupy a primary residence for at least 12 months or use a second home for most of the year.

Can I use a VA loan to refinance my current mortgage after retirement?

Yes, VA loans offer refinancing options. Refinancing replaces an existing mortgage with a new one. You can refinance to lower your mortgage rate, reduce your monthly payment, modify your loan terms, remove a name from the mortgage, as well as cash out your equity.

What is the Interest Rate Reduction Refinance Loan (IRRRL) program, and how can I benefit from it as a retired veteran?

The IRRRL program, also known as a VA streamline refinance. Veterans can use this program to refinance their existing VA loan and get a lower interest rate and mortgage payments. It offers a simplified application process with minimal paperwork and no appraisal, making it a convenient option for retirees looking to save on their mortgage.

How can I leverage my VA loan benefits to improve my retirement cash flow and reduce housing costs?

By using a VA loan to purchase a home or refinance an existing mortgage, retirees can lower their monthly housing expenses and free up cash for other retirement needs. With features like no down payment and competitive rates, VA loans offer retirees a cost-effective way to achieve homeownership.

Can I use my VA loan benefit multiple times after retirement?

Yes, you can use your VA loan benefit multiple times throughout your life, including after retirement. As long as you meet the eligibility requirements for each loan—such as sufficient entitlement, income, and creditworthiness—you can use your VA loan benefit to purchase or refinance a home as needed.

Valencia Higuera
Authored By: Valencia Higuera
The Mortgage Reports contributor
Valencia Higuera is a freelance writer from Chesapeake, Virginia. As a personal finance and health junkie, she enjoys all things related to budgeting, saving money, fitness, and healthy living.
Aleksandra Kadzielawski
Reviewed By: Aleksandra Kadzielawski
The Mortgage Reports Editor
Aleksandra is the Senior Editor at The Mortgage Reports, where she brings 10 years of experience in mortgage and real estate to help consumers discover the right path to homeownership. Aleksandra received a bachelor’s degree from DePaul University. She is also a licensed real estate agent and a member of the National Association of Realtors (NAR).