VA Loan Benefits For Disabled Veterans
To give back to the people that served our country, the Veterans Administration guarantees VA loans. VA loans tend to have lower mortgage rates and relaxed eligibility standards when compared to other mortgage products.
On top of those benefits, some veterans can get additional help when it comes to buying a home. Specific benefits are added for some surviving spouses, certain active duty military and disabled veterans.
Any disabled veterans that think they’re unable to buy a home may want to think again. VA loans provided perhaps the easiest route to getting approved for a mortgage and into a new home.
Here are the biggest benefits offered to disabled veterans:
VA funding fee exemption
The VA funding fee is an additional fee that is tacked on at closing. This helps pay for the process of the mortgage, and while some VA home buyers can roll this fee into their mortgage or convince the seller to cover it, it still has to be paid.
However, disabled veterans are exempt from the funding fee. This might not seem like a big deal, but it can end up saving the veteran thousands on their home.
First home VA home buyers will pay a VA funding fee of 2.15% of the loan. If the size of the loan is $200,000, then the home buyer can expect to pay an additional $4,300 at the closing. The VA funding fee jumps to 3.3% for any future home loans the veteran gets.
Avoiding this fee is a big money saver, and it’s a benefit that’s only offered to surviving spouses and disabled veterans.
Property tax exemption
While you might not be able to get rid of all your property taxes, you can easily reduce the annual cost of owning a home.
Disabled veterans are eligible for tax credits and exemptions, made available through the Disabled Veterans Tax Exemption program. Depending on the sate you live in, you could be entitled to a large exemption, reducing payments made toward taxes. The amount you can save varies from state to state, so be sure to check with an experienced VA lender to find out how much you can save.
Specially Adapting Housing Grant
If a disabled veteran has trouble with accessibility, then they could be eligible for a Specially Adapting Housing (SAH) Grant. This grant can be used toward making modifications to a home to make it more accessible, or toward buying an already adapted home.
Currently, the VA states that the maximum grant allowable is $63,780. The VA also will only cover up to 50 percent of the cost of the renovation or house, up to the maximum amount. Regardless, this is an excellent way to purchase an already updated home with some extra assistance from the VA.
Also, since it is a grant, veterans will not be required to pay the money back to the government.
Veterans that receive disability income are able to include that income when applying for a mortgage. This is useful, since being eligible for a VA loan doesn’t ensure that the veteran will get approved.
On top of having a healthy DTI ratio and a credit score of around 620 or higher, veterans will need to prove that they’re able to afford the house – both now and in the future – by verifying their income. The higher the cost of the home, the more money the veteran will need to have in income.
Fortunately, disability income can be included when calculating total income. For some disabled veterans, this is the difference between being able to afford a home and not being able to.
Depending on the state you live in, you could be entitled to additional benefits – some of which could help you secure a VA home loan.
While going through the home buying process, be sure to ask your lender what benefits might be available. For disabled veterans, it could be worth finding an experience VA lender who has had experience working with disabled veterans in the past.