The VA loan allows for 100% financing for eligible borrowers. Active duty service members, veterans, and surviving spouses can apply for a VA loan with zero percent down.
Of course, there are additional fees involved with home loans, such as closing costs. But, there are several benefits for disabled veterans that make the VA loan even more appealing.
Keep reading to learn about the 100 percent disabled veteran home loan and the benefits you can expect.
Owning a home is part of the American dream, but it can be challenging for disabled veterans to achieve homeownership. That’s where VA home loans can help. VA home loans are mortgage loans guaranteed by the Department of Veterans Affairs that help eligible veterans, active duty service members, reservists, National Guard members, and certain surviving spouses buy, build, repair, retain or adapt a home. These loans offer significant benefits for disabled veterans looking to purchase a home.
Overview of VA Home Loans for Disabled Veterans
The VA home loan program recognizes the sacrifices made by disabled veterans and aims to help them become homeowners. Here are some key things to know about VA loans for disabled vets:
-
No down payment required – Unlike conventional loans, VA loans do not require any down payment This removes a major barrier to homeownership for veterans who can’t afford a down payment.
-
No mortgage insurance – VA loans do not require private mortgage insurance, saving borrowers thousands of dollars over the life of the loan.
-
Lower interest rates – VA loans often have lower interest rates compared to other types of loans, making them more affordable.
-
Relaxed credit guidelines – VA has more flexible credit guidelines than conventional loans. Lower credit scores may be accepted.
-
No prepayment penalties – Borrowers can pay off a VA loan early with no penalty, allowing refinancing if rates drop
-
Can be used multiple times – The VA home loan benefit can be used more than once, to purchase multiple homes over time.
VA Loan Types for Disabled Veterans
The VA offers several loan programs that disabled veterans can utilize:
-
VA Purchase Loan – This loan helps veterans buy a primary residence through competitive interest rates and no down payment in most cases. It can be used for new construction, existing homes or condos.
-
VA Cash-Out Refinance – This option allows you to refinance an existing VA loan and take cash out of the home equity for other purposes, such as home improvements.
-
Interest Rate Reduction Refinance (IRRRL) – Also called a “streamline refinance,” this lets you refinance an existing VA loan at a lower interest rate to reduce your monthly payment.
-
VA Direct Loans – Available for Native American veterans buying homes located on trust lands. Offers competitive rates and no down payment.
-
Adaptive Housing Grants – Severely disabled veterans can qualify for grants to adapt a home to their disability through wheelchair ramps, widened doors, etc.
VA Home Loan Eligibility for Disabled Veterans
To qualify for a VA home loan as a disabled veteran, you must meet the following criteria:
- Served at least 90 consecutive days of active duty during wartime
- Received an honorable or general under honorable conditions discharge
- Have a VA service-connected disability rating, or qualify for VA disability compensation
- Obtain a Certificate of Eligibility from VA
The length of service requirements are waived if you receive VA disability compensation or have a service-connected disability.
Surviving spouses of disabled veterans may also be eligible for VA home loans.
How Disabled Veterans Get Started with a VA Home Loan
Here are the key steps disabled veterans should take to get started with the VA loan process:
-
Get your Certificate of Eligibility (COE) – This can be obtained from VA through eBenefits, or your lender can request it. The COE proves to lenders that you qualify.
-
Shop and apply for loans – Research multiple lenders and apply for pre-approval and the loan once you choose a lender.
-
Find a home and make an offer – Once pre-approved, start searching for a home within your budget and make an offer when you find one you like.
-
Submit VA paperwork – Your lender will submit the VA loan paperwork and can guide you through the process. You’ll order an appraisal and provide documents verifying your income and assets.
-
Close on your home – After underwriting approves the loan, set a closing date with your lender to sign documents and get the keys!
The VA loan process is streamlined for disabled veterans to help you buy your dream home. With competitive rates, flexible guidelines and no down payment, VA loans give disabled vets an accessible path to homeownership. Reach out to a lender to learn more and get started!
Frequently Asked Questions About VA Loans for Disabled Veterans
Can I get a VA home loan with a disability rating of 0%?
Yes, you can qualify for a VA home loan with a 0% disability rating from VA. The key is having a service-connected disability, even if it is rated at 0%. This makes you exempt from VA’s length of service requirements.
What documents do I need to provide for a VA loan?
Common documents needed for VA loans include: DD214 discharge papers, Certificate of Eligibility, tax returns and W-2s, paystubs, bank statements, debt information, VA disability award letters, and identification.
Is income verification required for VA loans?
Yes, lenders will require you to provide documentation to verify your income in order to qualify for a VA-backed loan. This includes pay stubs, tax returns, and W-2s. Alimony, disability, retirement, and investment income may also need to be documented.
Can I use a VA loan for an investment property or vacation home?
No, VA home loans can only be used to buy or refinance a primary residence that you intend to live in. They cannot be used for rental properties, second homes or vacation properties.
What credit score is needed for a VA loan?
VA does not set a minimum credit score requirement, but most lenders want at least a 620 FICO score. Some lenders may approve VA loans with scores in the 500s. Weaker credit means higher interest rates.
Can I refinance a conventional loan into a VA loan?
Yes, VA loans can be used to refinance non-VA loans, including conventional, FHA, and USDA loans. This allows you to convert to a VA loan and take advantage of benefits like no monthly mortgage insurance.
VA home loans give our disabled veterans increased homebuying power. If you have any questions or need guidance through the VA loan process, don’t hesitate to reach out to a VA-approved lender. They can walk you through every step to help you buy your dream home.
VA funding fee exemption
While all eligible VA loan borrowers can take advantage of the VA loan zero down payment requirement and competitive interest rates, the 100 percent disabled veteran home loan allows disabled borrowers to avoid the VA funding fee and save thousands of dollars on their loan.
The VA funding fee is a one-time payment to the VA loan to help fund the program, lowering the cost of these types of loans for taxpayers since this program doesn’t require down payments or mortgage insurance. This fee costs 2.15 percent of the loan amount and is due at closing. However, every subsequent VA loan after your first comes with a 3.3 percent VA funding fee. Borrowers can reduce their funding fees by making larger down payments, so your actual costs may range from 0.5-3.3 percent of the loan amount.
Borrowers receiving VA compensation for a service-connected disability or those eligible to receive compensation for a disability aren’t required to pay the VA funding fee.
In addition, borrowers may be eligible to receive a refund if they paid a VA funding fee and later were given VA compensation for a service-related disability.
The funding fee exemption can help save disabled veterans thousands of dollars in closing costs. For instance, if your home loan is $300,000 and this is your first time using your VA loan, the funding fee would be $6,450. If you have an exemption, you can save over six thousand dollars when purchasing a home with a VA loan.
If you’re unsure whether you’re eligible for the exemption, we recommend contacting the VA or letting us know, and we’ll work with the VA directly to ensure you get all the benefits the VA loan program has to offer.
Download the Griffin Gold app today!
Take charge of your financial wellness and achieve your homeownership goals Use invitation code: GRIFGOLD to register.