American veterans, retired personnel, and current service members may qualify for traditional low-interest Veterans' Administration loans. The loans provide qualified borrowers government-backed mortgages without their having to make a down payment or take out otherwise expensive mortgage insurance. But what about disabled veterans; are they eligible to receive VA loans?
Yes, they are. And the VA offers additional mortgage benefits when it comes to buying or upgrading a home to adapt it for use by permanently disabled vets. These benefits include:
- Funding Fee Waiver. Veterans who are 10 percent or more disabled from a service-related injury may have the VA waive its funding fees, saving from 3.3 to 5 percent on the loan amount.
- Home Improvement Grants. Two VA grant programs (detailed below) provide upwards of $50,000 to modify a home's access, doorways, bathrooms and kitchens for use by disabled residents/owners.
- State Property Tax Waiver. While it's not part of the loan agreement, some states grant property tax waivers to disabled veterans. Applicants should investigate these options at their local VA centers.
According to the VA, the basic entitlement for eligible veterans is $36,000. However, lenders typically withhold the down payment requirement on loans up to four times the applicant's available entitlement.
The Application Process
Veterans must all receive their Certificate of Eligibility (COE) from the VA to determine their qualifications for home loans and other benefits. Categories and statements of service vary and should be reviewed at the VA. Applicants can request a COE online. At the same time, borrowers should order credit scores and reports in order to document their creditworthiness to VA lenders. Lenders will look over the applicant's disability income, assets and debt for minimum benchmarks.
Housing and Adaptation Grants for Disabled Veterans
Two VA grant programs are available to qualified disabled veterans that help them build, purchase or modify a home for independent living. To qualify for these modification assistance programs, applicants must have encountered a severe and permanent loss of limbs, debilitating burns, or blindness while in the line of duty.
- Specially Adapted Housing (SAH) Grants
SAH grant funds can be used to build a new home on acquired property, remodel an existing home to provide adapted housing, or apply the grants funds to the balance of unpaid principal on an adapted home they already own. SAH grants are available up to 50 percent of the total cost of the home and may be used up to three times.
- Special Housing Adaptation (SHA) Grants
SHA grants are offered to qualifying applicants to adapt existing homes to accommodate the veteran's specific disabilities or to help veterans buy and adapt a home to provide access to those with service-connected disabilities.
In order to assess their qualifications for SAH and SHA grants, veterans and military with a service-connected, permanent disability should review eligibility requirements through the Veteran's Administration.
As with most home loans, mortgage rates may be based on the applicant's variables such as disability income and credit history. At LendingTree, veterans can view loan rates and round up competitive offers from participating VA lenders.