The Forces Help to Buy scheme was launched in 2014 and allows service personnel to borrow up to 50 per cent of their gross annual salary, up to a maximum of £25,000.
The loan is repaid in equal instalments over a 10-year period and is subtracted from their salary with a small insurance premium.
The loan can be used towards a deposit and other costs such as solicitor’s and estate agent fees.
Both Virgin Money and Clydesdale Bank said that the loan and insurance payments should be included as expenditure in an application so they would know what the customer was paying.
They both said they didn’t need the customer’s personal information note from the Ministry of Defence which confirms the loan.
The scheme aims to address low rates of home ownership among the armed forces and aims to recognise the “positive impact” home ownership can have on a mobile career, according to the government website.
The scheme was made permanent at the end of last year, having initially been set to close at the end of December last year following an extension the year prior.
According to Criteria Brian, there are 33 lenders who do accept Forces Help to Buy loan as a source of deposit compared to 38 lenders who do not.
Simone Riley, founder at Elite Force Mortgages, said: “The news that Virgin Money is now accepting Forces Help to Buy is very welcome. Forces Help to Buy was made an enduring Ministry of Defence policy on 1 January 2023. It is fantastic that Virgin Money is now offering its support to members of the Armed Forces who are planning on buying a home of their own.
“As an RAF family mortgage broker, I am thrilled that they have started accepting this source of deposit, with a clear straightforward policy.”
