As a deployed military serviceperson, you may think you can’t buy a home until your active duty ends. But, in fact, you can buy a home while you are deployed, even if you are living across the country or outside the United States.
A new home builder can help you do it. Some builders, like Drees Homes, Schumacher Homes, Taylor Homes and Lennar Homes, have even offered special incentives for military members. Examples of builder incentives include upgrades to your new home, preferred loan terms, paid utilities for one year, cash back and gift cards to home improvement stores.
Here’s what you need to know to buy a home while you’re deployed:
Finding a Home
Before shopping for a home, you should research the costs of homeownership and think about which factors matter most to you in locations where you want to live. When you’re ready to look at specific homes, you can start with NewHomeSource listings and home builders’ websites.
If you can’t visit builders’ model homes in person, ask a builder’s sales representative, a friend or family member, or your Realtor to take you for a tour using a video-calling app like Skype, WhatsApp or Facetime. Some builders offer 3-D virtual reality tours that you can experience with a VR viewer, such as Google Cardboard.
After you sign a contract for a specific home, you should discuss any changes you want to make to the home with your builder and select the upgrades, finishes and fixtures you want from the builder’s design center. These decisions can be made remotely or you can ask your spouse, a friend or family member or your Realtor to make the decisions for you. “Put your energy into choosing the things you didn’t like in the model home because for the things you do like, there’s no point in looking at the other options,” says Candice Williams, a Realtor with RE/MAX Space Center in League City, Texas.
Getting a Mortgage
You don’t have to get a VA loan to purchase a home while you’re deployed, but there’s no reason not to consider this type of loan, which is guaranteed by the U.S. Department of Veterans Affairs.
Many banks, mortgage companies and other lenders, including those affiliated with home builders, offer VA loans. The VA guarantees a portion of the loan so the lender can give you a better rate, terms or both, and have the assurance that if you don’t repay your loan, the VA will step in and reimburse the lender for part of the loss.
With a VA Loan:
- You don’t have to be a first-time buyer.
- You’ll need to have acceptable credit.
- You can buy a house, townhome, condo or other approved property type.
- Your eligibility is based on your service record.
- Your spouse can be a cosigner.
- You won’t need to make a down payment.
- You won’t be charged for private mortgage insurance.
- Your closing costs may be lower.
- Your builder may pay some of your closing costs.
- You won’t be charged a prepayment penalty if you pay off your loan before the term ends.
- If you have trouble making your payment, the VA may be able to help you.
To apply, you’ll need a certificate of eligibility (COE), which you can get online through the VA eBenefits portal. Or your lender can request a COE for you.
You’ll have to sign a lot of documents to buy a home, but you won’t necessarily have to sign all of them in person. Instead, you may be able to sign electronically online or with a mobile device.
For documents that require a pen-and-ink, or “wet,” signature, you can designate someone else to sign for you if you can’t sign in person. To use this option, you’ll need to sign a legal form called a power of attorney (POA) to allow another person whom you select to sign legal documents for you.
“Many deployed military have a POA in place so a spouse or family member can attend closing on their behalf and sign for them,” says Sheila Foster, a Realtor with Coldwell Banker United, Realtors, in Austin, Texas.
Your POA should authorize the person you’ve selected to make real estate decisions for you. If real estate decisions aren’t specified, your builder, lender or title company may not accept your chosen person’s signature instead of yours.
“Talk to your lender and title company about their requirements for a POA as soon as you go under contract on your new home,” Foster advises. Some builders, lenders and title companies may require that you use a specific POA form that they will provide for you.
Who to Choose
Your spouse may be the obvious choice when you sign a POA, but what if you’re not married or your spouse also lives away from the area where you want to buy your home? In either case, you can choose someone else.
“Select someone you’re comfortable with and you trust, and who knows exactly what you’re looking for in a home and what features you want, and is not going to sign off on buying a higher cost home,” Williams advises.
If you don’t want to sign a POA, you can still buy a home while you’re deployed if you can sign documents electronically and in person with a notary in the area where you’re deployed. You may find a notary on your military base or at the U.S. Consulate if you’re in a foreign country.
“This may take longer as documents will need to be mailed after signature,” Foster says. “Your lender and title company can advise you on their requirements.”
If you buy a home with a VA loan, you must intend to use the home as your personal residence rather than as a rental property or a home for friends or family other than your spouse. If you’re on active duty and you’re not married or your spouse isn’t able to occupy your home soon after closing, this occupancy requirement may be difficult to meet.
“The concern is that you’re never sure when [you’re] going to come back,” Williams says. “You could be on a six-month, nine-month or 12-month deployment, but it could be extended or cut early.”
If your timeline changes, you can purchase your home and leave it vacant for a short time until you return. You’ll have to make your mortgage payment every month even if you don’t yet live in your home.
Your builder may be able to offer you other options as well, Williams says.
- If your deployment ends earlier than you expected and your home isn’t ready, your builder may let you transfer your contract and earnest money to another home that has been completed. If that’s not possible, you’ll have to find temporary housing until your contracted home is finished.
- If your deployment is extended for a short period, your builder may allow you to delay your closing even if your home is finished.
- If your deployment is extended for a longer period, your builder may let you postpone your closing date and transfer your contract and earnest money to another home that won’t be finished until later.
- If your builder won’t delay your closing date, your lender may allow you to close and use your home as a rental property until your deployment is over.
Buying a home while you’re deployed may be a bit more complicated than buying in other circumstances, but if you’re ready to purchase your first home, a move-up home or your forever home, there’s no reason to wait.
Marcie Geffner is an award-winning freelance reporter, writer and editor in Ventura, California. In the last decade, she has penned more than 1,000 published stories about residential and commercial real estate, banking, credit cards, computer security, health insurance and small business, among other subjects. Editors describe her as “detail-driven,” “conscientious,” “smart” and “incredibly versatile.” Her award-winning reporting has been lauded as “rock solid,” “spot-on relevant,” “informative,” “engaging,” “interesting” and “nuanced.” Her stories have been cited in seven published nonfiction books and two U.S. Congressional hearings.
Prior to her freelance career, Geffner was senior editor of California Real Estate magazine. Later, she became managing editor of Inman.com, an independent real estate news website. She also has prior employment experience in technical writing, corporate communications and employee communications. She received a bachelor’s degree in English with high honors from UCLA and master’s degree in business administration (MBA) from Pepperdine University in Malibu, California. She enjoys reading, home improvement projects and watching seagulls at the beach.