VA Home Loan & Housing Benefits
How VA Disability Benefits can connect to Housing Benefits
VA Housing Benefits is more than a Home Loan
VA housing benefits include several programs designed to help eligible Veterans, service members, and certain surviving spouses with homeownership and housing needs.
The best-known benefit is the VA-backed home loan, which can help eligible borrowers purchase, build, improve, or refinance a home. VA also provides specialized housing grants for certain Veterans with qualifying service-connected disabilities.
VA home loan benefits and VA disability benefits are different programs, but a service-connected disability can affect eligibility for certain housing benefits and exemptions.
What is a VA Home Loan?
A VA-backed home loan is made through a private lender, such as a bank, mortgage company, or credit union. VA guarantees part of the loan, subject to program requirements.
VA-backed purchase loans can be used for qualifying home purchases, certain condominiums, manufactured homes or lots, construction, and certain improvements. VA also offers refinancing programs, including cash-out refinancing and the Interest Rate Reduction Refinance Loan (IRRRL).
Why Veterans use the VA Home Loan Benefit
No Down Payment Option
Eligible borrowers may be able to purchase a home without a down payment, depending on entitlement, lender requirements, purchase price, and other factors.
Funding Fee Exemptions
Certain Veterans receiving, or eligible to receive, VA compensation for a service-connected disability may be exempt from the VA funding fee.
No Monthly Mortgage Insurance
VA-backed loans generally do not require monthly private mortgage insurance, although other loan costs can apply.
Refinancing Options
Eligible borrowers may have VA refinancing options subject to applicable requirements.
Use the Benefit Again
Depending on entitlement and the circumstances, a Veteran may be able to use a VA home loan benefit again.
Purchase, Build or Improve
VA loan programs can support certain home purchases, construction, and qualifying improvements.
Who may Qualify for a VA Home Loan?
VA home loan eligibility depends on service history, duty status, character of service, and other program requirements. Different rules can apply to Veterans, active-duty service members, National Guard members, Reservists, and certain surviving spouses.
A Certificate of Eligibility (COE) establishes eligibility for a VA-backed home loan. Your lender may be able to request the COE for you.
Lenders also consider credit, income, debt, and other financial factors when deciding whether to approve a loan and its terms.
VA Funding fee & closing costs
A VA funding fee may apply when you use a VA-backed or VA direct home loan. The amount depends on factors such as the loan type, loan amount, whether it is a first or subsequent use, and the down payment.
Some Veterans are exempt from the funding fee, including certain Veterans receiving VA compensation for a service-connected disability and others who meet VA’s exemption rules.
Other closing costs may include lender fees, appraisal fees, title expenses, taxes, insurance, and recording fees. Costs vary by transaction and location.
Housing Grants for Veterans with service-connected disabilities
Specially Adapted Housing — SAH
Special Home Adaptation — SHA
Temporary Residence Adaptation — TRA
How VA Disability Benefits can connect to Housing Benefits
VA home loans do not require a Veteran to have a service-connected disability. However, a service-connected disability can affect other aspects of VA housing benefits.
For example, certain Veterans receiving or eligible to receive VA disability compensation may qualify for a funding-fee exemption. Veterans with certain severe service-connected disabilities may also qualify for adapted housing grants.
If your disability has not been properly recognized by VA, the underlying disability claim can therefore be important when evaluating the benefits available to you.
What If a VA Housing Benefit is Denied?
If VA denies an application for a housing grant or makes a decision affecting your VA benefits, the decision letter should explain the determination and available review options.
Depending on the type of decision, you may have options such as a Supplemental Claim, Higher-Level Review, or an appeal to the Board of Veterans’ Appeals. The appropriate option depends on the decision and evidence involved.
When a housing benefit depends on an underlying service-connected disability, it may also be important to examine the disability decision itself.
