Buying a Home as an Active Duty Service Member

Frequent moves are a fact of life for active duty military personnel. On average, most service members and their families can expect a PCS move every one to four years.

If you plan to stay in the service for any length, that can create ongoing challenges when deciding to rent or buy as part of the PCS process.

Because of mobility challenges, it’s estimated that about two-thirds of all active duty military members rent or live on base housing. In contrast, the remaining members take the plunge and own a home while in the service.

Fortunately, there are several programs to assist military homebuyers and veterans. While the prospect of owning a home is exciting, it can also be daunting, especially for first-time buyers who must simultaneously navigate two major life events.

Perhaps you’re looking at a PCS in the coming months but haven’t decided whether to buy or rent. If that’s the case, here are some factors to consider.

• If you buy a home, the property can appreciate in an up market.
• You will get tax benefits from owning a property property.
• When you move, you can transform the property into a rental to offset ownership costs.
• If you sell the home when you move, you can roll any home appreciation amounts into a bigger downpayment for another home. Any capital gains will be minimized if you roll that amount into another home purchase. 
• Renting may be cheaper than buying, allowing service members to pocket more money each month, but with the trade-off of not enjoying the potential investment appreciation that comes with owning a home.
• If you buy a home, it may be difficult to find a property that will produce a favorable financial outcome if you sell it two or three years after you move. You may break even in unfavorable conditions or not recoup your initial investment. 
• Buying a home has several costs to consider, including upfront fees and closing costs, coming up with a downpayment in some cases, and ongoing insurance payments and property taxes. You may also pay monthly HOA fees and other local assessments depending on where you buy.
• You are responsible for repairs and maintenance. A home inspection may spot troublesome issues you can use as a negotiation point when buying. Others will crop up over time, especially if you keep the home when you move again.
• If you decide to sell the house when entering your next PCS, you will deal with a big move and a large financial transaction at the same time. The house may be difficult to sell in a challenging market with high interest rates and may sit empty for some time after you move.
• If you decide to keep the house, you may rent it out. However, you’ll be a long-distance landlord or need to find a service to handle your property at a charge to you. You could wind up with poor tenants who do not take good care of the property. You may also suffer financially with unreliable income if there is an ongoing tenant turnover issue.

Working With a Specialized Military Housing Service Provider

A smart way to help you decide whether to buy is by working with a service provider specializing in military housing rentals and home purchases.

The Automated Housing Resource Network (AHRN) is among the best. Rick West is the President of AHRN, served 32 years in the Navy, and retired in 2013 as the 12th Master Chief Petty Officer of the Navy (MCPON).

He fully understands the wants and needs of military personnel facing housing issues as part of their service.

Base installations have several housing resources to assist families with PCS moves, but you may want an extra level of free personalized service that AHRN can provide. That’s where AHRN comes in.

The service is free and can assist you whether you decide to rent or buy. In addition to a wide range of rental listings for properties near bases, AHRN also has a robust offering of insightful articles and tools such as PDF budget estimator sheets and the comprehensive PCS Military Move in 2023: Complete PCS Guide with Tips.

AHRN has also partnered with a network of local and knowledgeable Real Estate Agents who are military and VA Home Loan savvy at Veterans United Realty (VUR). This service has over 7,000 agents across the U.S. who are ready and able to handle various situations.

If you own a home but are facing a PCS and want to keep your home, AHRN also offers valuable services to landlords and property managers. By listing properties on AHRN, they can reach a large, targeted audience of military members and their families, ensuring that dependable tenants occupy their homes.

Most landlords who list properties on the site are prior military or property managers who are repeat customers and value and support the military family. 

Programs for Service Members Buying a Home

If you’re leaning toward buying a home, you can tap into several homebuying assistance programs for military members and veterans, the most notable being the VA Home Loan Program.

VA home loans are a government-backed program that allows military members and veterans to buy, build, or refinance a home. VA loans are issued by private lenders but guaranteed by the VA.

That guarantee means that the VA protects the lender if the borrower stops making payments, removing much of the risk a lender might otherwise need to consider.

VA loans help service members qualify for more expensive homes, purchase a home with no downpayment in many cases, and get lower interest rates for loans. Closing costs are limited, and no Private Mortgage Insurance (PMI) is required.

Perhaps the best part of VA home loans is that this is a lifetime benefit. That means you can use the benefit multiple times. 

When you purchase a home with the VA loan, you are agreeing to occupy that home as your primary residence for at least one year. Beyond that, you can do what you want with the home, which includes converting it into a rental property with some restrictions. 

You can also refinance a VA loan into a conventional loan to free up your VA entitlement, known as a “One Time Restoration,” meaning you can only do this once. There is no limit to the number of properties you can own with a VA loan at one time, but you might run out of VA entitlement at some point.

To receive full VA loan benefits, veterans must have served at least 90 days during wartime or 181 days during peacetime. 

In addition to home purchase loans, the VA has several other housing-related benefit programs. 

Cash Out Refinance loans allow you to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements. 

Interest Rate Reduction Refinance Loans (IRRRL) are also called Streamline Refinance Loans and can assist current owners with a lower interest rate by refinancing an existing VA loan. 

Native American Direct Loan (NADL) Program assists eligible Native American Veterans in financing the purchase, construction, or improvement of homes on Federal Trust Land or reducing the interest rate on a VA loan. 

Specially Adapted Housing (SAH) Grants assist Veterans with a permanent and total service-connected disability purchase, build an adapted home, or modify an existing home to account for their disability. 

State Level Programs

Several states also offer programs to assist with military homeownership.

For example, Texas offers a $5,000 grant for a down payment and closing cost assistance for eligible service members and veterans. The $5000 Military Homeownership Assistance Program comes with no strings attached, and any eligible homebuyer should take advantage of it regardless of circumstance.

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