VA Loans and Service Related Disabilities
A VA home loan is a way for many active duty and former military personnel to obtain a home loan with a low interest rate, no down payment, and zero mortgage insurance. VA home loans are available to discharged, retired, and active military personnel and reservists who qualify, regardless of whether they have a service-related disability.
The VA home loan programs can offer additional benefits to veterans with a service-related disability. Any service personnel with a service-connected disability from former or active duty military service, reserve service, or National Guard duty, should inquire about the special benefits available to them. The following are some benefits of the VA home loan programs and a description of any impact a service-related disability can have on them.
1. Zero Down Payment on a VA Home Loan
One of the important benefits of a VA home loan is that an eligible former or active duty military, reservist, or National Guard member may purchase a home with 100% financing. That means if you are qualified, no down payment is required, and the VA home loan mortgage will cover the entire eligible appraised home price. This loan limit is $417,000; however in some areas this may be higher. A service-related disability does not affect this benefit.
2. No Monthly Mortgage Insurance Premiums
Unlike FHA and many conventional home loan programs, the VA home loan guarantee program offers mortgages which require no monthly mortgage insurance premiums to be paid. Disability also has no impact on this benefit.
3. VA Loan Funding Fee Waived for Disabled Vets
Veterans who have a service related disability might be eligible for a waiver of the VA loan funding fee, which can equal up to 3.3% of the loan amount. The funding fee is required by the VA as a part of the VA home loan programs and is paid to the VA, not the lender. Veterans who are as 10% or more disabled from a service-related injury can potentially have this fee waived.
Veterans who are still on active duty, but are qualified to receive compensation for a service connected disability, may be eligible for the funding fee waiver, even if they close on a home before being released from the military. Additionally, funding fee waivers can now be given to veterans rated disabled at the time of pre-discharge exam, so check with your lender to see if this applies to your situation.
Property Taxes may be Waived for Disabled Veterans
Under the laws of some states, disabled veterans may qualify for a waiver of property taxes. A borrower with a VA home loan should check with the laws of their state to see if they qualify. This benefit is not directly related to the VA home loan programs.
Disabled Vets may Qualify for VA Grants for Accommodation
Veterans with severe disabilities who have conditions requiring accommodations may be eligible for a grant from the VA in addition to a VA home loan. The Specially Adapted Housing (SAH) grant program was designed for the purpose of modifying existing homes, or constructing new homes to meet the needs of the disability. A grant of up to $50,000 may be awarded for the purpose of adapting a home to meet the needs of a veteran who has suffered a debilitating service-related injury. Possible housing accommodations may include ramps, modifications to doorways, walkways and rooms, and special improvements to kitchens and bathrooms to help accommodate a disabled veteran.
The VA mortgage programs have helped many veterans and military personnel obtain a home loan. Such programs are offered only by VA-approved lenders. And with the additional benefits for those individuals with service-related disabilities, eligible veterans can enjoy the independence and joy of home ownership as a reward for service to their country.
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