VA Home loan for HPSP on deferment?

[Pendraegon]

Hey guys, I'm sure this has been asked before but I couldn't find it after a quick search.

Do HPSP student qualify for a VA home loan? I've gotten a civ deferment for residency, but I'd like to take advantage of the program if I can. I just got off the phone with one of the representatives and he said you have to have 90 consecutive days of AD, which I did last year, but that nothing counts until I'm actually in my payback period. Thanks for any light you guys can shed on this.

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[ValeRx]

Not too sure how it works in this situation but to even be looked at for VA benefits, you have to be a VETERAN. Just being in doesn't even necessarily qualify you as a veteran.

 

[Pendraegon]

I'm pretty sure that this is given to active duty as well as veterans.

 

[ValeRx]

The VA has specific criteria for determining whether or not you are a veteran. On top of that, there are also criteria for getting the VA home loan.

 

[Pendraegon]

*
From the web site.

"Active Duty Service Personnel

If you are now on regular duty (not active duty for training), you are eligible after having served 181 days (90 days during the Gulf War) unless discharged or separated from a previous qualifying period of active duty service."

So I guess I can get this once I'm on active duty but not now, bummer.

 

[notdeadyet]

So I guess I can get this once I'm on active duty but not now, bummer.

I know for National Guard, we're eligible after six years even if we haven't done 6 mos active duty. I don't know if this holds true for HPSP and if time counts towards that 6 mos. But I guess HPSP counts as IRR time, no?

 

[Pendraegon]

it does but we do 45 days of AD every year

 

[notdeadyet]

it does but we do 45 days of AD every year

I don't think that will qualify. When the VA uses the six months of duty as a marker for programs, it almost always excludes time that can be construed as training. I think the ADTs fit that bill.

 

[NavyFP]

I believe it is 181 consecutive days of active duty. And agree with above active duty for training does not count.

 

[Pendraegon]

yeah, that's in my quote from the VA website. I really wish the military would treat us more as part of the service, it might help with retention...

 

[notdeadyet]

I really wish the military would treat us more as part of the service, it might help with retention...

From my understanding of HPSP, you don't drill or have any military responsibilities during the four years aside from ADT, right? It'd be hard to ask for the same fringe benefits and perks as active duty folks.

I feel for you, though. That home loan would be nice. I have to wait over five years to qualify for it myself...

 

[IgD]

Mortgage rates are pretty cheap right now. Have you looked at Navy Federal Credit Union? They have no money down loans for service members that are reasonable. NFCU never seems to have the best rates but has a reputation for being a rock solid institution.

 

[notdeadyet]

Mortgage rates are pretty cheap right now. Have you looked at Navy Federal Credit Union? They have no money down loans for service members that are reasonable. NFCU never seems to have the best rates but has a reputation for being a rock solid institution.

I'll check them out. I think it's a great time to buy a home, but it's slightly maddening for me personally, as I'm in 3rd year of medical school. If I knew I was going to be here in two years, I'd buy in a heartbeat. But buying a home and then having to sell it in two years could be a disaster. Lots of folks are stuck with homes they can't get rid of.

 

[Droopy Snoopy]

Mortgage rates are pretty cheap right now. Have you looked at Navy Federal Credit Union? They have no money down loans for service members that are reasonable. NFCU never seems to have the best rates but has a reputation for being a rock solid institution.

USAA is down around 4.25-4.5; most places are.

 

[ValeRx]

yeah, that's in my quote from the VA website. I really wish the military would treat us more as part of the service, it might help with retention...

No offense but if all you've done is gone to do some hospital rotation during the summer for a few weeks, you haven't done anything to earn those benefits.

 

[iamgoaloriented]

I'm an HPSP student finishing this year and was going to try to buy a house with a VA loan. It has just recently occured to me that I may not qualify. If you go to the va website it seems that the eligibility requirements are quite variable and potentially flexible. Consider this:

Eligibility may also be established for:

Certain United States citizens who served in the armed forces of a government allied with the United States in WW II.
Individuals with service as members in certain organizations, such as Public Health Service officers, cadets at the United States Military, Air Force, or Coast Guard Academy, midshipmen at the United States Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with WW II service, and others.

What does "and others" mean? I am unaware of any HPSP student being accepted or denied.

I am going to call them tomorrow and see what they say. Hopefully they can give me an answer. If not I guess I will just try and see what happens. I will let you all know what comes of it. I was hoping maybe someone in the same situation has gone through the process and has found out one way or another.

 

[notdeadyet]

Call and let us know what you hear. But I really don't think HPSP will qualify.

I called if National Guardsmen qualified for the loan and was told that since we were drilling reserves, we only qualify after 6 years. Given that in HPSP you are technically IRR, I don't think you'd qualify until after your six months of active duty came up.

The VA uses different definitions of "veteran" based on their different programs (home loan vs. healthcare vs. job training, etc.), but you're not going to find them particularly flexible on, well, pretty much anything.

 

[WACAT]

HPSP does not qualify, I'm buying a house and they would not let me because, as previously stated on this thread, you have to be on active duty for six months consecutively. Its just not an option, however, VA loans have a 3% origination fee anyway so there may be better options out there at these low rates.

 

[Pendraegon]

not really asking for full benefits, but all I'm saying is that as far as loans and things go, it's not like we're not going to pay them back. The other issue is time in service. None of what we do counts for time in service (which I can understand) but how many people are going to stay 16 years for retirement when you can have a better retirement by going private after your commitment is up. I can totally understand the point of view that we aren't there everyday doing work for the country but we are doing training for the work that we will be doing in the service. On the other hand if they did offer all those benefits our contracts would probably be 8 years long instead of 4. I'm not trying to start anything here, just wish I got some benefits. (we can all dream right?)

 

[iamgoaloriented]

I called the VA loan customer service number and they told me they didnt think I would be approved. I told them my specific situation, being an HPSP student, having been in the reserves for the last 4 years with 4 seperate active duty tours adding up to 180 days.

They said that once I start active duty I should be eligible after 90 days. For a reservist you need 6 years or if you have done 181 days of active duty you also have to be discharged.

WACAT, did you actually go though the process and get denied? In any case, what the lady on the phone told me confirms what you have said and what the eligibility requirements say.

I too am annoyed that it is so hard to get loans at this stage in our lives. We have gauranteed good income and are obviously pretty reliable. People like us are the perfect people to lend to. We will have the money to pay them off, but in the meantime they will make money on the interest that accumulates. In the short term we get the help that we need, and in the long run they make money. Why cant they see that? The country is in a financial mess because they gave loans to people who never had any hope of paying, but they cant give a loan to someone who will be a doctor and air force captain in a few months!

Doing 20 years is definitely something I am considering. You dont make as much money as you would if you went into private practice, but you get a pension for the rest of your life and can still work after you are done. I like the security. I cant say at this point that I will want to do it, but it is definitely something I am considering.

 

[pgg]

Doing 20 years is definitely something I am considering. You dont make as much money as you would if you went into private practice, but you get a pension for the rest of your life and can still work after you are done. I like the security. I cant say at this point that I will want to do it, but it is definitely something I am considering.

Be aware that retirement pay is a percentage of base pay only ... not a percentage of total pay. And most physicians who stay in past their obligations and sign MSP contracts will earn far more in bonuses/allowances than base pay.

So it's not going to be 50% of the total you might make as a retirement-eligible O5 ... it's going to be 50% of that O5's base salary. Crunch the numbers for your specialty and you might find that 50% shrinking to less than 20%.

Forgoing extra 10-12 years of higher civilian pay (while you're at an age when retirement investments have time to grow) may not make much sense when the retirement reward is just $3-4K/month in 2009 dollars.

 

[iamgoaloriented]

Be aware that retirement pay is a percentage of base pay only ... not a percentage of total pay. And most physicians who stay in past their obligations and sign MSP contracts will earn far more in bonuses/allowances than base pay.

So it's not going to be 50% of the total you might make as a retirement-eligible O5 ... it's going to be 50% of that O5's base salary. Crunch the numbers for your specialty and you might find that 50% shrinking to less than 20%.

Forgoing extra 10-12 years of higher civilian pay (while you're at an age when retirement investments have time to grow) may not make much sense when the retirement reward is just $3-4K/month in 2009 dollars.

I see what you are saying. I still like the idea of having a gauranteed source of income and free health care for the rest of your life after putting in 20 years. I will only stay in military medicine if I like doing it though. So far my experience has been limited only to my ADTs, but it has been good.

 

[notdeadyet]

Forgoing extra 10-12 years of higher civilian pay (while you're at an age when retirement investments have time to grow) may not make much sense when the retirement reward is just $3-4K/month in 2009 dollars.

Agreed. Folks don't always do the numbers on that. Someone not long ago crunched them and figured for his specialty (EM, I think it was), it made more sense to pull the plug after 15 or 16 years. The extra four or five years of civilian wages offset whatever he would have made via military retirement.

Not sure how long he was planning on working and YMMV, but the retirement thing isn't always as golden a ticket as some folks think it might be.

 

[pgg]

Not to mention that some of those retirement benefits - particularly health care - are vulnerable to modification or elimination at the whim of a government that is presently taking on extraordinary amounts of debt with no end in sight.

I wouldn't count on the federal government to give me anything in my old age, whether I'd earned it or not.

 

[iamgoaloriented]

You guys raise a lot of good points, but I still really like the idea of a pension. I'm not saying I would do 12 years that I didnt want to just to get it, but in the case of the person only needing 4 more years I might consider it. You could make a lot of money during those 4 years that you could save or invest, but savings can be depleted, investments can go wrong, and stock markets can crash. I would see it as taking a temporary pay cut for added security before moving on and still being able to make lots of money later. If they even got rid of pensions though, in that case the extra time would indeed be down the drain.

In any case, I wouldnt put in 16 years unless I really liked military medicine, and in that case I'd probably end up doing 20 anyway. Some people really seem to like it.

 

[NJEMT1]

I am coming on active duty this summer from civilian deferment and trying to figure out if I could get a VA loan now. I don't think so but wanted to check//

Looks like you need 90 consecutive days of active duty during wartime, which I don't have as my HPSP ADTs were all less than 90 consecutive days.

I am also seeing that you are eligible with 6 years in the selected reserves. I have almost 8 years in the IRR. Am I correct that the IRR does not count as selected reserves so I would not be eligible?

Thanks

 

[DeadCactus]

I have to wait over five years to qualify for it myself...

You posted this three years ago but anyway: they're not counting the ASR time as qualifying?

 

[Barium56]

You posted this three years ago but anyway: they're not counting the ASR time as qualifying?

Deadcactus, I just tried to apply for the VA Loan. Our ASR orders (Title 32) do not qualify. We can only qualify after 6 years in the NG or reserves.

 

[DeadCactus]

Bummer, could have been nice for residency...

 

[Droopy Snoopy]

Bummer, could have been nice for residency...

Maybe, but one thing that's often overlooked is that there is a VA funding fee associated with the loan. Basically it takes the place of PMI to 'invest' you into paying back the loan. First go-around it's something like 1.5% of the purchase price; after that it hikes up to 3.5%.

So let's say you buy a home during residency for $150K, fee = $2250. Later on you want to buy a home on that attending salary for $350K, fee = $12250 (rather than $5250 at the lower rate).

 

[DeadCactus]

Maybe, but one thing that's often overlooked is that there is a VA funding fee associated with the loan. Basically it takes the place of PMI to 'invest' you into paying back the loan. First go-around it's something like 1.5% of the purchase price; after that it hikes up to 3.5%.

So let's say you buy a home during residency for $150K, fee = $2250. Later on you want to buy a home on that attending salary for $350K, fee = $12250 (rather than $5250 at the lower rate).

My logic was that no down payment and a relatively low monthly payments during residency make it more reasonable for most residents to get into a home. As an attending, a reasonable down payment should be possible and a 15 year fixed rate mortgage would probably be a better option than the USAA loan...

 

[colbgw02]

My logic was that no down payment and a relatively low monthly payments during residency make it more reasonable for most residents to get into a home. As an attending, a reasonable down payment should be possible and a 15 year fixed rate mortgage would probably be a better option than the USAA loan...

Yeah, as compared to the down payment required for non-VA loans these days, the funding fee isn't a big deal. Also, assuming that the price of the home isn't maxing out the allowable VA loan for the area, the funding fee can be financed. Considering the ridiculously low interest rates, I'm not sure why you wouldn't go that route.

 

[Old Grunt]

Never mind.