Vets and Servicemembers Seeking Homes: VA Housing Benefits
The U.S. Department of Veterans Affairs offers a variety of housing benefits to eligible veterans and service members, including mortgages that don't require a down payment, housing grants for veterans with service-related disabilities and rental assistance for veterans in need. Whether you're a renter, you have plans to buy a home or need housing assistance, help should be within reach.
VA loans are available to eligible borrowers getting a mortgage to buy or refinance a primary residence. (The program does not finance rental properties or vacation houses.) The VA doesn't actually lend money to homebuyers; the agency guarantees loans made by private lenders to eligible borrowers. The VA sets the minimum loan qualification requirements, and it doesn't guarantee mortgages with risky provisions or loans to applicants with insufficient income or poor credit.
A VA loan can help you move into the home of your dreams, assuming your dreams are in your price range. "There is no VA loan limit, per se you can borrow as much as you'd like," says Dan Green, loan officer at Waterstone Mortgage and author of The Mortgage Reports. "However, because VA loan guidelines enforce a maximum debt-to-income ratio (DTI) for all approved loans, your maximum loan size will be capped by household income and your debts."
The VA requires that you apply for a certificate of eligibility (COE). You can apply for a COE via mail or fax. Or you can do it the easy way and have your VA lender get it for you using an online system available to lenders, which takes just a few minutes in most cases. You must meet minimum terms of service for different peacetime/war years to qualify.
Options for disabled veterans
The federal government offers grants to eligible veterans blinded, paralyzed and otherwise disabled in the U.S.'s wars and military actions to help them buy, build or adapt homes that accommodate their disabilities. The Specially Adapted Housing (SAH), Special Housing Adaptation (SHA) and Temporary Residence Assistance (TRA) grants were created to help disabled veterans lead more independent lives.
The SAH and SHA are similar, with the main difference being that the SHA grant can be used for a home in which the veteran lives but does not own. SAH grants can be used to construct a specially adapted home on a new lot, build specially adapted housing on land already owned or remodel an existing home for specially adapted housing. Disabled veterans can also apply the grant against the unpaid principal mortgage balance of an adapted home already acquired without the assistance of a VA grant.
In addition to adaptive housing grants, disabled veterans who apply for VA-backed mortgages can get their funding fees waived. The VA also offers rental assistance for those who do not own or wish to own their homes. Organizations like Building Homes for Heroes also build or buy homes and give them to eligible veterans and families.
Resources for more housing help
Able-bodied vets might find a fit with one of the many programs available to moderate or low income homebuyers, first-time homebuyers and buyers in redevelopment areas. These include Mortgage Credit Certificates (MCCs), which refund part of the mortgage interest paid by qualified homebuyers, down payment assistance (DPA) programs and programs that help with closing costs, such as the Military Housing Assistance Fund.
Various state programs help veterans with housing-related costs. For example, the Texas Veterans Land Board supplies low-interest property, residential and home improvement loans that require little or no down payment, along with cemetery plots. The home loan program also offers an interest rate reduction to qualifying veterans with a disability. Separately, the PenFed Foundation offers grants to veterans who are also first-time homebuyers.
One of the best resources available for vets looking to buy or build a home is the U.S. Department of Housing and Urban Development (HUD). Its State Pages provide comprehensive lists of housing agencies and charitable programs, including those set up for veterans and military families. That's where you'll find programs like CalVet, a California program offering below-market interest rates to qualified veterans.
Help for renters or homeless veterans
If you're not a homeowner or in a position to become one, you may be able to find rental assistance. The VA and other government and charitable agencies offer a wide variety of programs for disabled and able-bodied veterans who need help.
The U.S. Department of Housing and Urban Development and VA Supportive Housing Program (HUD-VASH) offers rent subsidies. The amount of the subsidy is paid directly to the landlord, and the veteran pays the difference. In addition, the HUD-VASH program supplies other supportive services to women veterans, veterans who have recently returned from combat zones and veterans with disabilities.
The VA's 26 Cities Initiative has spawned efforts across the country to end veteran homelessness in many large cities. Bonuses and incentives are provided to landlords to offer rentals to veterans, and to brokers who connect veterans with subsidized housing projects like Section 8. Participants in the 25 Cities Initiative include Atlanta, Baltimore, Boston, Chicago, Denver, Detroit, Fresno, Honolulu, Houston, Las Vegas, Los Angeles, Miami, New Orleans, New York City, Orlando, Philadelphia, Phoenix, Portland, Riverside, San Diego, San Francisco, Seattle, Tampa, Tucson and Washington, DC.
With so many options available, a little expert advice will go a long way. Contact your local VA, explain your housing situation, and find out what the agency can do for you. After all, you've earned it.
VA Home Loans. US Department of Veterans Affairs. http://www.benefits.va.gov/HOMELOANS/index.asp
Housing Help for Veterans. USA.gov. https://www.usa.gov/veteran-housing
VA 25 Cities Initiative. US Department of Veterans Affairs. https://www.va.gov/homeless/25cities.asp/