Disabled Veterans and VA Loans: Extra Perks to Know About
VA loans have long been one of the most valuable benefits available to U.S. military veterans and active-duty service members. These loans offer affordable homeownership by eliminating the need for a down payment and private mortgage insurance (PMI) and often provide below-market interest rates.
But for veterans living with service-connected disabilities, there are even more advantages–some of which are lesser known but very impactful. Plus, many of these advantages apply to any service-connected disability rating, meaning you don’t need a 100% disability rating to qualify.
Check your VA home buying eligibility. Start here (Jul 14th, 2025)Special Perks for Disabled Veterans
1. VA Funding Fee Waiver
Normally, VA loans include a one-time funding fee ranging from 1.25% to over 3% of the loan amount, which helps sustain the VA loan program. However, veterans receiving VA disability compensation may be exempt from this fee. This exemption can save you thousands of dollars upfront. You can also be exempt if you are receiving retirement or active-duty pay or if you are a surviving spouse of a veteran.
Veterans may be able to have a VA funding fee refunded if they receive their disability rating after their loan closes. If you believe you qualify for a refund, contact your lender and reach out to your VA Regional Loan Center to get started.
Tip: Be sure your Certificate of Eligibility (COE) reflects your disability status to automatically apply the waiver.
2. Easier Income Qualification
For disabled veterans, VA disability income is considered qualifying income with mortgage lenders and can be used to qualify for a loan. Other loans consider debt-to-income (DTI) ratios when assessing qualification. With VA disability payments considered in the full value of this calculation, you may qualify for a larger loan or lower interest rates. This perk can be especially helpful if you are retired or don’t have a traditional job.
Other perks:
- Some lenders may allow more flexible debt-to-income (DTI) ratios with VA loans.
- You may be able to count additional income like caregiver stipends or spousal benefits.
3. Property Tax Exemptions
Many states offer partial or full property tax exemptions for disabled veterans. While the specifics vary by state and local jurisdiction, these exemptions can reduce your annual property tax bill. Some states offer 100% exemptions for veterans with a 100% disability rating. Others provide scaled reductions based on the level of disability or income thresholds.
Tip: Contact your local county assessor’s office to see what exemptions you may qualify for.
Check your VA home buying eligibility. Start here (Jul 14th, 2025)4. Housing Grants for Modifications
Disabled veterans with qualifying service-connected injuries can apply for two major grant programs. These grants can help make a home more accessible by funding modifications such as wheelchair ramps, widened doorways, roll-in showers, and accessible kitchens.
- Specially Adapted Housing (SAH) Grant can provide up to $121,812 for the 2025 fiscal year.
- Special Housing Adaptation (SHA) Grant can provide up to $24,405 for the 2025 fiscal year.
Additional Resources and Benefits
Disabled veterans may also qualify for:
- Free homeownership counseling through VA or HUD-approved agencies
- Interest Rate Reduction Refinance Loans (IRRRLs) for lowering existing VA loan rates
- Local and state homeownership grants or closing cost assistance.
How to Start the Process
Here are the steps to access your benefits:
- Get your Certificate of Eligibility (COE) from the VA.
- Confirm your funding fee exemption is noted.
- Apply with a VA-approved lender.
- Ask your local assessor about property tax exemptions.
- Apply for SAH or SHA grants through the VA if home modifications are needed.
The VA loan provides veterans with exclusive benefits to make the path to ownership easier, and a disability rating unlocks even more advantages in the VA loan system. From waived fees to adaptive housing grants and tax breaks, these benefits can make a significant difference in your path to homeownership.
You’ve earned these benefits–make sure to use them.
