What Is the SCRA and How Can It Save Military Families Money?

by Cindy LaDuke

What is the SCRA?

The Servicemembers Civil Relief Act (SCRA) is a federal law designed to protect active-duty military members from financial and legal hardship while serving the country.

SCRA protections apply when a servicemember:

enters active duty
receives PCS orders
is deployed
experiences a material change due to military service

The law exists to ensure military members can focus on service, not financial penalties.

How does the SCRA save military families money?

SCRA can save military families thousands of dollars over time through several key protections.

🔹 1. Interest Rate Cap (6%)

One of the most powerful SCRA benefits is the 6% interest rate cap on pre-service debts, including:

mortgages
credit cards
auto loans
personal loans

If a loan was taken out before active duty, the lender must:

reduce interest to 6%
forgive (not defer) the excess interest
adjust payments retroactively to the start of service

👉 This alone can save thousands per year on a mortgage or consumer debt.

🔹 2. Mortgage Protections & Foreclosure Delays

Under SCRA:

Foreclosures require a court order
Protections extend during service and after service
Courts can pause proceedings if service affects the ability to pay

This gives military families breathing room during deployments, PCS moves, or temporary income disruption.

🔹 3. Lease Termination Without Penalty

SCRA allows servicemembers to terminate leases early when they receive:

PCS orders
deployment orders
relocation exceeding 90 days

This applies to:

rental homes
apartments
vehicle leases

👉 No early termination fees when done properly.

🔹 4. Protection From Default Judgments

If a servicemember is sued while on active duty:

courts must verify military status
default judgments can be delayed or reopened

This prevents legal action from proceeding without the servicemember’s knowledge or ability to respond.

How does SCRA apply to mortgages specifically?

SCRA impacts mortgages in four major ways:

✔ Interest Rate Reduction

Applies to mortgages originated before active duty.

✔ Payment Adjustments

Lenders must recalculate payments based on the reduced rate.

✔ Foreclosure Protection

Foreclosure requires court oversight and can be delayed.

✔ Post-Service Protection

Some protections continue after leaving active duty.

💡 Important: VA loans already offer favorable terms, but SCRA still matters for:

non-VA mortgages
refinances
second homes
prior civilian loans

Additional State Benefits (PA, LA & Ohio)

Some states provide extra protections on top of federal SCRA.

🇺🇸 Pennsylvania (PA)

If you lived in Pennsylvania, additional benefits may include:

State-level tax relief for active-duty military
Residency protections while stationed elsewhere
Military-friendly foreclosure procedures

PA often aligns closely with federal SCRA but adds tax and residency clarity, especially for homeowners who PCS out of state.

🇺🇸 Louisiana (LA)

Louisiana offers strong military protections, including:

Expanded foreclosure delays
Additional consumer protections during deployments
State-level judicial discretion favoring servicemembers

Louisiana courts are historically military-friendly when SCRA is properly invoked.

🇺🇸 Ohio

Ohio provides:

Additional safeguards against foreclosure
Tax considerations for military income
Recognition of military service in housing-related proceedings

Ohio servicemembers often benefit from layered protection when federal and state rules overlap.

How do you apply for SCRA benefits?

You do not apply through the government you invoke SCRA directly with lenders or landlords.

Step-by-Step:

1️⃣ Obtain military orders or proof of active duty
2️⃣ Submit a written request to:

lender
landlord
creditor
3️⃣ Include:
copy of orders
request for SCRA relief
4️⃣ Keep records of submission

Most lenders have SCRA departments specifically for this.

💡 Many benefits apply retroactively even if you didn’t know earlier.

Common mistakes military families make

❌ Not asking for SCRA benefits
❌ Assuming VA loans replace SCRA
❌ Missing retroactive refunds
❌ Not coordinating SCRA with PCS housing decisions

This is where experience matters.

Why working with a military-experienced real estate professional matters

Understanding SCRA, PCS timelines, VA lending, and state-specific rules helps military families:

time home sales properly
avoid penalties
reduce interest costs
relocate smoothly

Real estate decisions are often financial strategy decisions for military families.

Work With Someone Who Understands SCRA & PCS Realities

Cindy LaDuke is an Associate Broker REALTOR® with Cindy’s Realty Group by eXp Realty and a military spouse of over 20 years. She understands PCS relocations, SCRA protections, VA considerations, and the real-world logistics of buying and selling homes during military service.

She serves military families across Georgia, Alabama, and Puerto Rico, helping them relocate, sell, and buy homes with clarity and confidence.