The VA loan is a great option for eligible veterans, active-duty members, or surviving spouses. It offers the chance of home ownership without a large amount of costs like those normally associated with conventional loans. VA loans offer no down payment, no mortgage insurance, and lower interest rates. If you have a service-connected disability as a result of your time in the service, the VA has some special loan guidelines and programs to help you achieve your dream of home ownership. Here are some key VA loan benefits for disabled veterans.
Exempt from VA funding fee.
Typically, with a conventional or FHA loan, if you pay less than 20% down, you’re responsible for paying mortgage insurance. This can add a couple hundred dollars onto your monthly mortgage and can quickly add up over time. With a VA loan, you’re entitled to a one-time funding fee in place of mortgage insurance. The funding fee is generally 2.15% of the purchase price of the home. As a disabled veteran of 10% or more, or a surviving spouse of someone who passed in action, you can get the funding fee waived. This is one of the major VA loan benefits for disabled veterans because it can save thousands up front.
Grants for disabled veterans
If you have a service-connected disability, the Special Adapted Housing (SAH) grant and the Special Housing Adaptation (SHA) grant are available to help. The SAH helps build a home, remodel and modify and existing home, or pay against the principal mortgage balance of an adapted home that’s already been purchased without a VA grant for veterans with disabilities. The SHA helps adapt an existing home, adapt a home that the veteran intends to purchase and helps veterans purchased and already adapted home. Veterans must have their disability benefits approved before applying for these grants. It is important to note, that even if you don’t qualify for these grants (i.e. didn’t receive a 100% service-connected disability rating) check with your local VA office and lender. There may be other sources of funding that will help you achieve your goal of home ownership using a VA home loan.
Disability payments
If you’re receiving disability compensation from the VA, it can be counted as income which helps reach VA loan income requirements. The income can also be “grossed” up by 25% to qualify for the income requirements for a loan. VA disability payments are 100% tax free. The three guidelines for income to qualify for a VA home loan – it must be stable, reliable and expected to continue, with an emphasis that your payments are expected to continue. Using your disability payments as income is one of the top VA loan benefits for disabled veterans.
As a disabled veteran myself, I have utilized my VA loan benefits numerous times throughout my home buying over the years. Feel to reach out so I can get you into your home!
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