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The VA loan is a great option for any eligible veteran, active-duty servicemember or surviving spouse. It offers the chance to get into a home without a down payment and a one-time funding fee in place of mortgage insurance.

If you have a disability as a result of your time in the service of our country, you’ve made a special sacrifice. In recognition of this, the VA has some special loan guidelines and programs to help you when you get your VA loan.

Before we get there though, let’s discuss a basic question often asked by veterans.

Do Veterans Have To Pay Closing Costs?

There are closing costs associated with any mortgage that have to be paid by the client. VA loans are no exception, but the VA seller concessions policy allows the seller to pay for a larger amount of these costs then they could on many other loans.

There’s no limit on the amount someone can choose to contribute to the following categories:

  • Origination fees
  • Discount points-These are prepaid interest points. Prepaying some of your interest ahead of time enables you to lower your interest rate.
  • Miscellaneous fees-these include things like paying for credit reports, property surveys and appraisals

There are certain things a seller can only pay up to 4% of the purchase price or appraisal for, whichever is lower. This limit applies to escrow items (prepaid property taxes and homeowners insurance) as well as the VA funding fee.

However, you may be able to get out of the funding fee. More on that below.

In addition to the seller concessions option, you can choose to take lender credits for part or all of the closing costs. In this case, these are built into the balance of the loan and paid off over the loan term.

Who Is Exempt from the VA Funding Fee?

If you have a service-connected disability or are a surviving spouse of someone who passed in action or as a result of their service-connected disability, you can get the funding fee waived.

If you currently receive disability benefits and have not yet closed on your VA loan, your funding fee is waived and you do not have to pay it. (This is true regardless of your level of disability.)

If you close on your loan prior to receiving benefits, the funding fee may be refundable if you were in the middle of applying for disability at the time of your purchase or refinance. For example, if a first-time home buyer is purchasing a $200,000 home with a VA loan and qualifies for disability, the 2.15% funding fee will be waived – saving the homeowner $4,300. Once your disability benefits are approved, you must apply in writing to your state’s VA Regional Loan Center to initiate the funding fee refund. If you financed the funding fee, the refund amount will be removed from your principal amount due, and if you paid with cash, the VA will issue you a check.

It is important to remember that if you do not currently receive disability benefits, you must have a pending claim for disability prior to the closing date of the loan. If the application for disability is dated after closing, you may not receive a refund.

Grants for Disabled Veterans

A disabled veteran may be able to purchase a home with a fee-free VA loan, but if the home also needs accessibility modifications, the Specially Adapted Housing (SAH) grant and the Special Housing Adaptation (SHA) grant are available to help. To qualify for these particular grants, you need to have a 100% service-connected disability rating from the VA.

The SAH helps qualified veterans with one of the following:

  • Build a home with special disability-related modifications.
  • Remodel and modify an existing home to meet adapted housing needs.
  • Apply the grant against the principal mortgage balance of an adapted home that’s already been purchased without VA grant assistance.

The SHA helps qualified veterans with one of the following:

  • Adapt an existing home that is already owned by the veteran.
  • Adapt a home that the veteran intends to purchase.
  • Help a veteran purchase a home that has already been adapted.

It’s important to note that if you’re considering a grant, the maximum amount allowed for the SAH is for fiscal year 2018 is $81,080. For the SHA, the grant limit is $16,217. Additionally, veterans must have their disability benefits approved prior to applying for housing grants.

Veterans who are eligible for either of these programs may also qualify for a Temporary Residence Adaptation (TRA) grant. This allows you to get funds to temporarily adapt the residence of a family member whose home you’re temporarily living in. The maximum loan amount for an SAH eligible veteran is $35,593. If you’re eligible for SHA, the maximum TRA grant is $6,355 for 2018.

Even if you don’t qualify for any of these particular programs, check with your local VA office as well as the local branch of the Department of Health and Human Services in your area. There may be other sources of funding, veteran specific and otherwise, that will allow you to accomplish goals related to housing or anything else made more difficult by your service-connected disability.

There Are Tax Credits and Exemptions with Homeownership

Once you use your VA loan benefit to buy a new home, you’re eligible for some very useful tax credits and exemptions that could help quite a bit. The Disabled Veterans Property Tax Exemption can help reduce the amount a disabled veteran pays per year in taxes. The amount varies by state, so it’s important to check with your local VA office in person or through their website to find out about your state-specific benefit. For example, some states offer a 100% tax exemption to all veterans, while others restrict it to 100% disabled veterans.

With a VA loan, you may also be eligible for a Mortgage Credit Certificate (MCC). The MCC is issued on the state level that allows you to claim a tax credit for a portion of the mortgage interest paid per tax year. The credit amount is determined on the state level, but is definitely a benefit worth taking advantage of.

Disability Payments Can Help You Get a VA Loan

If you’re currently receiving disability compensation from the VA, it can be counted as income, which, in turn, helps you meet VA loan income requirements. To be eligible for a VA loan, income must meet three standards – it must be stable, reliable and expected to continue. The key factor in using disability pension toward a VA loan is that your payments are likely to continue.

If you’re interested in your own VA loan, you can get started online or go ahead and give one of our Home Loan Experts a call at (800) 785-4788. We’re happy to help!

VA loans are in place to help veterans of the armed forces, so make sure to take advantage of these benefits if you qualify. Do you have any questions about these benefits? Ask in the comments below!

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This Post Has 196 Comments

  1. Hi, I’m a retired Army veteran. I’m in the process of purchasing a home. I have a 60% disable rating from the VA. I live in IL and I am exempt from $6,000 in property taxes. My lender qualified me for the house and put the property taxes on the initial disclosure form. I asked him about the exemption and he told me, “you have to file that on your own with the county, once you are in the house.” That seemed illogical. Why wouldn’t I do get the exemption initially? I wanted to fact check my lender, is this accurate? And if so, do I get credited or reimburse for any taxes I would pay until my exemption got approved?

    1. Hi Charles:

      Thank you for your service! I’m going to take these a bit point by point.

      What the lender is telling you is accurate. Tax foreclosure is one of the things that puts your lender’s investment in the home at risk so mortgage investors want to make sure you get the exemption before they assume it within your escrow account. Unfortunately, what this means is that you could end up paying property taxes for up to a full year at the higher rate because your mortgage servicer does escrow analysis once per year typically. However, you would get that extra money back in the form of a check when the escrow analysis was completed. One thing you might be able to do is request that your servicer do a special escrow analysis once you’re approved for the exemption so that you could get the adjustment in your monthly payment sooner.

      The one thing I can’t tell you is whether you would get a credit from the County for the amount of time you were in the home before they processed your exemption. That really is up to local authorities. I hope this helps!

  2. Hello, Is there anyway I can get a bank to consider that I will be exempt from paying real estate/property taxes to help me qualify fora home loan?

    1. Good morning, Shanelle:

      Thank you for your service! It’s true that many states and/or local taxing authorities offer exemptions from local real estate and property taxes if you’re a disabled veteran. I recommend you speak with one of our Home Loan Experts at (888) 980-6716. I’m not sure whether we can take this into account on your approval amount before the loan is made, but we would be able to go over the process with you in any case. I hope this helps and have a good day!

  3. I am a veteran with 100% service connected disability, I need a home within 22 days My credit is 450-475, because I dont have any history to speak of. I currently receive 3500 approximately monthly from benefits… I make plenty of money but cant get financing any suggestions?

    1. Hi J.C.

      Thank you for your service! I’m going to try to give you some advice that could help you out. However, I would advise that you see if you can look for a place to rent or find other living arrangements. You will need a credit history in order to get any kind of financing for a home and it’s not the type of thing you can build up in less than a month. You’re probably looking at a process that would potentially take at least a couple of years. However, I can offer a few suggestions to help you get started on the right path.

      First, you’ll want to talk to your bank and tell them you’re interested in opening a secured credit card. With a secured card, you deposit some of your own money as the credit line. Once you do that, you can then make charges to it and pay it off every month. Your lender will report the payments and you start to build credit history. Another thing you can take a look at that many banks offer are small personal loans expressly for the purpose of building up credit. After six months or a year of making payments on the secured card, you can look into getting a regular credit card because you’ll be more likely to be approved. You can also take a look at possibly getting something smaller like a car loan. The whole key here is that lenders want to see how you handle both revolving payments (credit cards) and installment loans (car, student loans, personal loans or a mortgage). Here’s a really good article on building credit for the first time.

      Additionally, as you do this, you’re going to want to start monitoring your credit. Not only is this a good way to track your progress over time, but it’s one of the best ways to combat identity theft because you’ll know quickly if there’s anything on your report that you don’t recognize. Our friends over at Rocket HQ give you access to your VantageScore 3.0 credit score and report every week from TransUnion. You’ll also get personalized tips on how to improve your score based on the information that’s in your report. I hope this helps!

  4. Hello. Can someone with 30% rating (possibility of increase), but less than 2 years of military service, be eligible for the VA loan? Where can one find the answer to that question?

    Thank you!

    1. Hi Christie:

      I believe you are referring to the veteran’s disability rating. If they were discharged early due to the service-connected disability, they are eligible for the VA loan. If they would like to go over their options, they can do so at (888) 980-6716. Thank you for reaching out!

      1. Thank you for replying. What happens if the rating came a year and a half after he got discharged? Is he still able to be re-eligible for the VA loan?

  5. Thank you for sharing these tips on how disabled veterans can gain loan. This is a nice option by the way. I think it is worth the try.

    1. Hi Michelle:

      I’m glad you found the post useful. If you would like to get started, you can do so at Rocket Mortgage® or by giving one of our Home Loan Experts a call at (888) 980-6716. Thank you for your service and have a wonderful day!

  6. I’ve been told going thru USAA for a VA loan is best way. Of course I am working with QL. why would working thru QL be better than USAA????

    1. Hi Frank:

      While I can’t comment on the services of a competitor, I can talk about our services.

      When it comes to VA loans, if you need to get your certificate of eligibility, we can pull that for you and help you with the entire process. We will work with you every step of the way.

      We have earned J.D. Power’s highest ranking in customer satisfaction for primary mortgage origination each of the last 8 years running. We also service 99% of the loans we originate, so your relationship with us doesn’t end at the closing table. We have the J.D. Power Award for the highest-ranking in customer satisfaction for mortgage servicing for the last five years as well. Because we have that servicing relationship with you, if there’s an opportunity to get you a better deal down the line based on your goals, we will reach out and let you know.

      We don’t charge any fees for paying off your loan early. We also offer services like biweekly payments which enable you to save money over time by making one extra payment toward
      principal each year. Finally, we don’t charge any fees to pay online or over the phone.

      I hope this helps! Have a good day!

    1. Hi Chris:

      I’m going to advise you to talk to one of our Home Loan Experts because every situation is different. It’s included in your debt-to-income (DTI) ratio for sure, but if you have any court orders or other issues because you’re behind, that could work a little bit differently as well. You can get in touch with us at (888) 980-6716. I hope this helps! Thank you for your service!


  7. I am an 80% disabled Veteran receiving benefits & currently have a conventional loan with Wells Fargo with a current balance of around $120,000. Their Interest Rate on my ARM has increased from 3.25% to over 4% & our payment from $599.00 to $662.38. I am still working & will be 70 years old April 21, 2018. My FICO Score ranges between 813 to 826, I’ve never missed a payment on ANYTHING, EVER but would like my payments to be no more than $500. per month since I will be retiring within 1 Year following my Birthday in April. We live on the lake & our house is valued at approximately $400,000. To $450,000. I would prefer a 15 year ARM which seems to have the lowest Int Rate according to the rate charts I’ve seen recently. I do not want people calling me – I prefer answers via email & also questions from you via email. I am at work 5 days a week & travel from job to job as a Bridge Superintendent so phone calls are not an option at present. Many Thanks.

    1. Hi Larry:

      At this time, we only offer ARMs with 30-year terms. It’s worth noting that while you’re correct that you pay less interest with a shorter-term, the monthly payments are lower on longer-term loans. I’m going to give you a couple of options here so you can check out what we offer. We have a completely online processed through Rocket Mortgage where you can get a full refinance approval if you choose. The other option would be to give us a call at (888) 980-6716. I know you said phone calls are normally not an option, but once you talk to someone and we know what state you’re in, we can work with you via email as much as possible. It shouldn’t be a problem. You can also call us at your convenience. We have Home Loan Experts available at the following times:

      Monday – Friday, 9:00 a.m. – 10:00 p.m. ET
      Saturday, 9:00 a.m. – 8:00 p.m. ET
      Sunday, 10:00 a.m. – 7:00 p.m. ET

      Hope this helps! Have a great day! Thank you very much for your service!


  8. I had a VA loan 10 years ago that went into foreclosure. The foreclosure ended up being an illegal foreclosure and several banks such and BofA, Wells Fargo, JP Morgan, settled and had to pay veterans back for the foreclosure. My question is would that be grounds to request full reinstatement of your VA loan eligibility?

    1. Hi Luis:

      Unfortunately, I think that’s more of a question for the VA. I would start by contacting your Regional Loan Center in your area and going from there. I hope this helps!

      Kevin Graham

  9. I am 60% disabled and it is my only income. Would I qualify for a loan? I have excellent credit (over 800) and zero debt. I would be able to put down 20% if needed.

    1. I can’t tell you whether you would or wouldn’t qualify on the blog. That depends on a variety of factors. What we can do is make sure we look into all your options. With that in mind, it would be best to start by talking to one of our Home Loan Experts by calling (888) 980-6716. Hope this helps!

      Kevin Graham

  10. Hi,
    I am helping my dad who is a disabled veteran. He is currently living in a house out in the country in a town where there isn’t even a gas station and doctors and facilities are about 25-30 minutes away. So he is getting ready to list his house but wants to know if he can pre-qualify/get pre-approved for a VA home mortgage loan to make an offer on another place in town when he gets an offer that he can accept on his place. Is there something out there that can work with him? He currently owes $115,000 on his home now but the house will be listed for around $230,000 so after all is paid off, commissions, etc…he would be putting around $60,000+ down on his new place that would have a listing price of around $125,000 or so. Is there a program or something he can do for that? He does not know his credit score but believes he is above that 620 mark and should be good….


    1. Hi Becky:

      You can certainly get a preapproval on a VA home loan. If you want to have your father go ahead and reach out to us by calling (888) 980-6716, one of our Home Loan Experts can absolutely walk him through the process and go over his options. Have a great day!

      Kevin Graham

  11. I am a disabled veteran…with a school loan that is in rehabilitation have paid 5 payments. Also owe some back taxes which i have been making monthly payments still owe around 7 thousand credit scores above 620…would I have problems getting a loan

    1. Hi Patsy:

      We can certainly look into your options, but your situation is too complex for me to give any kind of guidance here. I suggest you speak with one of our Home Loan Experts. They’ll be able to fully analyze your financial profile and give you advice on next steps. You can get in touch with them by filling out this form or calling (888) 980-6716. Thank you very much for your service!

      Kevin Graham


    1. Hi Doug:

      Thank you for your service. Every situation is different, but I’m going to recommend two things. You can get a look at your credit score our friends at QLCredit. You can also get tips from here on how to improve your score. Also, if you have any way of documenting that the support payments were made, you may be able to get the derogatory marks removed from your report by going to the credit bureaus. One of our home loan experts may be able to look into your situation and offer additional advice if you give us a call at (888) 980-6716. Hope this helps!

      Kevin Graham

  13. Hello Mr Graham,

    I have a large tax lein on my credit, can I still get a VA loan? I have 734 credit but the tax lein shows up. I have spoken with the IRS and they have reviewed by account and concluded that I have enough income to support my self/family, but not enough for them to levy or come after, is there a solution for me??

    Thanks, George

    1. Hi George:

      In most cases, liens are required to be paid off prior to or at close. We might be able to help you with an FHA loan, but you do have to be on a repayment plan at the very least. It doesn’t sound like that’s the situation at this point. I’m sorry we can’t help you at this time, but hopefully, this lets you know where you stand.

      Kevin Graham

  14. I’m looking for a loan to buy a pool for my backyard. I’m 100% disabled veteran an need water to help my spine. I suffer from PTSD, MST hepertention and can not stand to be around people I don’t know it scares me into a panic. So please help.

    1. Hi Cynthia:

      Thank you for your service. In terms of this grant program for disabled veterans, you really need to start with the VA and go from there. They determine the qualifications on those grants. I recommend getting started with your VA Regional Loan Center in your area. I wish you good luck and I hope this helps!

      Kevin Graham

  15. Is there a definition of what is considered a special adaptation for the house? For example, part of my rehab for a wounded shoulder is swimming. Can it be used to purchase a pool?


    1. Hi Robert:

      That’s something you would have to probably ask the VA. I’m not sure if the disability would have to be permanent in order to get the grant. My thought is that the worst they can do is say no.

      Kevin Graham

  16. Hi,
    We tried getting refinanced through Rocket, but it didn’t work out. Then, we tried through Loan Depot, and because of the appraisal, they said that we would have to come to the table with $40,000. Now, we’re working with Allied Bank, and I think it’s going to go through, but on our current mortgage, we have a balloon payment due on 1/6/2017. That’s just a couple days from now. What should I do if the refi takes longer. I have spoken with the mortgage company, but they won’t give us an extension.

    1. Hi Angelia:

      I’m sorry to hear it didn’t work out, but I’m going to do my best to help you right now. Typically, there’s a grace period when any mortgage payment is due before it’s considered late. The industry standard is 15 days, but the length of your grace period would be spelled out in the original loan documents for the mortgage you’ll be making the balloon payment on. I would see if you get one and find out exactly how long you have. You should also make the lender for the refinance aware that you have this timeline. They may be able to move things along.

      Kevin Graham

    1. I can help you get started! If you want to share some basic information about your income, assets and credit online, we can get you a preapproval or full refinance approval in minutes through Rocket Mortgage. Otherwise, one of our Home Loan Experts will be happy to reach out to you at (888) 728-4702. Hope this helps!

      Kevin Graham

  17. I am a 100% disabled veteran with a 717 credit score. I am receiving benefits due to mst secondary to ptsd that happened in the navy and this affected my performance significantly but they gave me an honorable discharge then stated that I was a burden to command due to substandard performance how can I get a va home loan

  18. I am 100% service connected due to mst secondary to ptsd which took place in the navy and this affected my performance significantly, but they gave me an honorable discharge, but, yet said I was a burden to command due to substandard performance when in fact it was due to the mst military sexual trauma

  19. I am 100% Service Connected disabled Veteran who is married. We have a combined income of Approx.. $90,000 . We currently have a mortgage on a house valued at $200,000. There is $84,000 left on this loan. It is at 4% with 9 years left on the balance. I would like to refinance this at a lower rate. Our combined credit score is around 700.
    I would appreciate any information.

    Thank You.

  20. Hi, I’m 90% disabled and about to be 100%. My credit is in the mid 500 and only because my ex wife destroyed my credit when i was down range. I cant seem to find any options from anyone at the VA. Im stuck living with my parents and need some tips on anything i can do to get approved for a VA loan. I have already went through Camden Credit services to get my credit from 4’s to mid 5’s. Can somebody please help me out with getting approved? Don’t know if it will help being 90% disabled and a single father. Thanks alot all who help.

    1. Hi James:

      I can tell you that we require a credit score of at least 620 to qualify for a VA loan. However, if you speak to one of our Home Loan Experts, we may be able to look further into your credit history and determine the best way for you to proceed. You can get in touch with them by filling out this form or calling (888) 728-4702. In the meantime, you can check out this post on tips to build your score up. QLCredit is a credit monitoring service that might be useful to help you track your progress. Good luck!

      Kevin Graham

  21. I am a 100% disabled veteran trying to start the process in buying a home loan and am having difficulty finding lenders that understand the VA HOME LOAN benefits for disabled veterans.
    I have a 740 credit score. I’m looking to purchase a $315,000 home. I have read that I should be eligible to have the lending fees waived, as well as not having to have private Home Owners insurance and the Disabled Veterans Property tax exemption.
    Are those all things I have to pay upfront and then get reimbursed for?? If so how do I get reimbursed for them.
    I’m also trying to figure out how much my monthly payments would be.
    Any Help would be appreciated.

    1. Hi Carus:

      I don’t know about the other two benefits for sure, but with the ability to have the fee waived, that’s automatic as long as you’re already receiving disability benefits. If you’ve been approved for benefits, but you haven’t started receiving them yet, that’s when you could apply for a refund after the fact. The other two benefits are either handled by the VA itself or the county you would be paying property taxes to.

      Kevin Graham

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