March 31, 2025
One common question about FHA loans involves whether or not military members are eligible to apply. Depending on circumstances, some military members may choose FHA mortgage options over VA loan benefits.
What do FHA loan rules tell lenders about veterans and currently serving members of the U.S. military?
HUD 4000.1 contains the rules that apply in these cases. One reason some might mistakenly assume military borrowers might not qualify for FHA mortgages is the FHA’s occupancy rule for new purchase loans and refinances.
But FHA loan rules include the following on occupancy for military applicants:
“Borrowers who are military personnel, who cannot physically reside in a Property because they are on Active Duty, are still considered owner occupants and are eligible for maximum financing if a Family Member of the Borrower will occupy the subject Property as their Principal Residence, or the Borrower intends to occupy the subject Property upon discharge from military service.”
That’s a very important clause in HUD 4000.1 to remember, but it’s also good to know ahead of your loan application that additional documentation may be needed if this rule applies to you.
“The Mortgagee must obtain a copy of the Borrowers military orders evidencing the Borrowers Active Duty status and that the duty station is more than 100 miles from the subject Property. The Mortgagee must obtain the Borrowers intent to occupy the subject Property upon discharge from military service, if a Family Member will not occupy the subject Property as their Principal Residence.”
These rules are similar to but slightly different from VA loan occupancy rules, which essentially say the same thing but have slightly differing terms.
FHA loan rules for occupancy state that borrowers must occupy the home as their primary residence within 60 days of closing and live there for at least one year.
Naturally, the information provided above would factor in as appropriate.
In general (aside from what’s written here), FHA home loans don’t offer any special terms or conditions for military borrowers. However, a particular lender may have something to offer veterans and those currently serving.
You must discuss your military status with the lender to see what’s available or possible.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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