If you’ve served in the military, you can get one of the best tangible rewards for that service by taking advantage of two big government programs: the Veterans Affairs Home Loans program or, in the case of veterans disabled in the line of duty, special grants to build or adapt homes more compatible with those disabilities.
If you’re unfamiliar with either program, this guide breaks down the basics, including benefits, eligibility, and how to apply.
Home Modification Grants for Disabled Veterans
If you or a loved were injured during military service, you may need to modify, update or renovate parts of your home in order to adapt to your new physical limitations. Fortunately, the Department of Veteran Affairs offers grants that can cover some or all of these costs.
Currently, the VA offers three housing grant programs for veterans with disabilities: The Specially Adapted Housing Grant (SAH), The Special Housing Adaptation Grant (SHA), and The Temporary Residence Adaptation Grant (TRA).
To be eligible for SAH or SHA grants, your disability must be a result of your military service, and you must be adapting your permanent home. TRA grants can be used to modify temporary residences in the event you’re staying with a family member or loved one. You can utilize these grants up to three times each.
Specially Adapted Housing Grant
With a SAH grant, veterans with disabilities can build a new, specially adapted home or remodel one to be specially adapted; they can also use grant money to help pay down the mortgage for an adapted home obtained with a non-VA home loan.
SAH grants are capped at $85,645 in 2019, and you can use a maximum of three grants. Reduced grant amounts may be available for those temporarily living with family members; amounts are capped at $37,597 per year.
Qualifying disabilities for SAH: Loss of or loss of use of both legs; loss of or loss of use of both arms; blindness in both eyes having only light perception, loss of or loss of use of one leg; loss of or loss of use of one lower leg together with residuals of organic disease or injury; loss of or loss of use of one leg together with the loss of or loss of use of one arm; certain severe burns; or the loss, or loss of use of one or more lower extremities due to service on or after Sept. 11, 2001, which so affects the functions of balance or propulsion as to preclude ambulating without the aid of braces, crutches, canes, or a wheelchair.
Special Housing Adaptation Grant
With SHA grants, veterans with disabilities can adapt their own home or that of a family member; adapt a home they or their family wants to buy; or purchase an already-adapted home.
You can use SHA funds for the same adaptations that SAH grants cover, but eligibility criteria are different (see below) and the amount you can receive is lower: SHA grants are capped at $17,130 in 2019, or $6,713 for those living temporarily with family members. As with SAH, you can use a maximum of three grants.
Qualifying disabilities for SHA: Blindness in both eyes with 20/200 visual acuity or less; loss of or loss of use of both hands; certain severe burn injuries; or certain severe respiratory injuries.
Temporary Residence Adaptation Grant
TRAs are versions of the SAH and SHA grant, except they can be used for temporary housing where a veteran or servicemember is residing. TRAs offer smaller sums than the SAH and SHA grants designed for permanent residences, capping out at $37,597 for SAH funds and $6,713 for SHAs. Using a TRA grant counts toward the maximum three usages of either SAH or SHA grant funds.
Qualifying disabilities for TRA: Because TRA grants are the same as SAH and SHA, only for use on temporary housing, the eligibility requirements are the same. In order to qualify for TRA SAH and SHA funds, you must have one of the following disabilities from the SAH or SHA requirements listed above.
|Maximum Allowed||$37,597 or $6,713, depending on which grant you qualify for|
VA Home Loans: What are the Benefits?
In the event you don’t meet the disability requirements for SHA, SAH or TRA grants, there are other ways to you can utilize your veteran status to help you purchase or modify a home.
The VA’s home loan program is a great option and can be used to buy a new property with very few up-front costs. If you’re looking to renovate your existing home instead, a VA cash-out refinance could help. These loans leverage the equity you have in your property, giving you cash for home improvements, education costs, medical bills or any other expenses you might be facing.
All in all, VA loans offer some hard-to-pass-up perks that make them an even better deal than FHA loans, one of the other major government-backed loan programs.
- No down payment: Even if you don’t have a down payment saved up, you can still get a VA loan as long as the sales price of the home is less than or equal to the home’s appraised value. FHA loans, which are also backed by the government but available to non-military buyers, still require at least a 3.5% down payment.
- No mortgage insurance: Mortgage insurance, which you typically pay when you make a down payment under 20% of the home’s purchase price, can tack on a lot to your monthly payment. VA loans don’t carry this requirement, while FHA loans do.
- No or low closing costs: VA loans cap what you’ll pay in closing costs, and allow the seller to pay them instead of the buyer.
- No early-payment penalty: If you pay off your 30-year mortgage in 20 years, your lender won’t penalize you because it’s losing interest.
- Payment assistance: You may be eligible for VA loan assistance programs if you fall behind on your mortgage.
- Loans are assumable: A qualifying home buyer can assume your VA Loan instead of obtaining a new one.
What’s the catch? Most recipients will have to pay a funding fee to close their VA loan. The exact percentage, which ranges from 1.25% to 3.3% of your loan amount, varies according to your eligibility, whether this is your first or a subsequent VA loan, and what down payment (if any) you will be offering. You can roll it into the loan or pay for it in cash at closing.
Eligibility for VA loans
With benefits like that, Uncle Sam wants to make sure only those who are truly eligible can get a VA loan.
First, you must be obtaining a VA home loan for a qualifying purpose: buying a home; buying a condo in a development approved by the VA; buying and improving a home; making improvements related to energy efficiency; or buying a manufactured home and/or lot.
Second, you must be able to obtain a certificate of eligibility (COE) to get a VA loan. To get the COE, you’ll have to meet the following requirements:
- Active-duty military members must have been in service for a minimum of 90 continuous days.
- Veterans must not have been dishonorably discharged. They must have served for specified minimum time periods that vary according to whether their service was during wartime or peacetime. Requirements, spelled out on the VA homepage, range from 90 total days to 24 continuous months.
- Members of the National Guard or Reserves must have either 90 days of active Gulf War service, or six years of other service and meet select requirements regarding the end of their service, such as honorable discharge, detailed at the link above.
- Veterans’ spouses may also be eligible. They must be 1) unmarried after their veteran spouse died in service or from a service-related disability or 2) remarried at age 57 or older, on or after Dec. 16, 2003. Spouses of servicemembers who are missing in action or are prisoners of war may also be eligible. Spouses of some totally disabled veterans may qualify as well, even if the disability was not their cause of death.
Certain other individuals, including military academy cadets, officers of the National Oceanic & Atmospheric Administration and U.S. citizens who served under an allied country during World War II, may also be eligible.
You’ll need to gather different evidence of eligibility depending on which category applies. You can apply for your COE online, through your preferred lender, or by mail.
Note that you can have a COE and still be turned down if you don’t meet a lender’s criteria for making the loan. You’ll likely still need to have a certain minimum credit score (this will vary, but 620 is a common cut-off) and have a favorable debt-to-income (DTI) ratio, meaning you aren’t already burdened by too many debt payments. In most cases, VA lenders are going to want to see a DTI of 41% or less, meaning your required debt payments don’t exceed 41% of your gross income each month.
Where to Get a VA Grant or Home Loan
Grants: Eligibility for SAH, SHA and TRA grants is determined through the Veterans Service Center. To apply for a grant, log into your ebenefits portal, apply by mail or visit your local VA office.
Loans: You can work with any VA-approved lender to obtain a VA home loan — simply ask whether the lender has completed the VA certification process. However, you may want to consider a military-focused lender that will likely have a lot more experience with VA loans than other institutions. Here are several options to investigate:
- USAA is consistently among the top-ranked banks for customer service for most loan types, including mortgages. It’s the fourth-largest lender of VA loans by loan amount. USAA membership is restricted to military members and their families.
- Navy Federal Credit Union is the nation’s largest credit union and the sixth-largest lender of VA loans. Membership is open to active military members, certain Department of Defense civilian employees, and their families.
- Veterans United Home Loans is a lender that works solely with VA home loans and refinancing loans. It is now the third-largest lender of VA loans.
- iFreedomDirect specializes in VA and FHA loans. It’s among the top 40 largest lenders of VA loans.
- The Federal Savings Bank is a veteran-owned lender specializing in VA loans. It is among the top 15 VA lenders.
Though not solely focused on the military or VA lending, other institutions that are among the largest lenders of VA loans include Freedom Mortgage, Quicken Loans, and Wells Fargo. These lenders may be able to help you with home improvement loans or refinancing as well.