22 Apr Home Loans For Disabled Veterans: What Additional Benefits Are Available?
Active military personnel, Veterans, and their families can own a home with affordable financing through the VA loan program. This program may provide additional benefits to veterans who have sustained injuries or disabilities during service. Veterans often have questions regarding VA loans, and here are some answers.
- Veterans with disabilities are exempt from the VA funding fee?
- When applying for a VA loan, can Veterans use their disability income?
- Are there any tax benefits available to disabled veterans?
- Are there any specialized home improvement programs or grants available to disabled Veterans?
VA Loan Benefits For Disabled Veterans
While all eligible veterans can benefit from home loan advantages such as no down payments, competitive interest rates, and credit score options, disabled Veterans may also qualify for additional VA loan benefits, including:
- VA funding fee waiver
- Disability benefits for veteran income
- Special housing grants
- Property tax exemptions
VA Funding Fee Exemption
Typically, borrowers of VA loans are required to pay a funding fee, which VA uses to cover potential losses on defaulted loans. However, Veterans receiving or entitled to VA compensation for a service-connected disability may be exempt from the funding fee. Surviving spouses of Veterans who passed away during their service or due to a disability related to their service are also eligible for this exemption.
Moreover, Veterans with a pending disability claim at the time of loan closing may qualify for a refund of the fee under specific circumstances.
The funding fee amount varies based on the down payment and the duration of service. For first-time buyers who do not make a down payment, the funding fee is typically 2.3% of the loan amount. Therefore, a Veteran who borrows $200,000 would need to pay a funding fee of $4,600. Thus, being eligible for a VA funding fee exemption can result in substantial savings for disabled Veterans.
VA Disability Benefits for Veteran Income
Disabled Veterans may also benefit from including their disability compensation as income towards a mortgage in many cases. While Veterans are still required to follow the standard process of applying for a VA mortgage, documenting their income, including disability compensation, may increase their available revenue, increasing their likelihood of loan approval.
VA Loan Benefits: Grants For Disabled Vets
Disabled veterans have the opportunity to receive grants that can assist them in purchasing, constructing, or modifying their permanent residence to meet their unique requirements and enable them to live more independently. As of the fiscal year 2023, veterans with a qualifying service-related disability may qualify for a Specially Adapted Housing (SAH) grant of up to $109,986. In addition, veterans who meet the eligibility criteria may be eligible for a Special Home Adaptation (SHA) contribution of up to $22,036 in the fiscal year 2023. These grants may cover a range of modifications, such as installing a ramp for easy access to the home, adding bathroom handles or widening doorways to accommodate a wheelchair.
Tax Credits & Exemptions: VA Loan Assistance For Veterans
Property tax exemptions and credits vary by state and depend on the veteran’s disability rating. It is common for veterans with 100% disability ratings to receive maximum benefits. However, some states may allow a lower percentage of service-connected disabilities to qualify. These tax breaks may save veterans thousands of dollars, so it is crucial to explore all options. However, tax laws are subject to change, so consulting a tax advisor can ensure you take full advantage of the applicable laws.