VA Home Loan Benefits for Disabled Veterans

Overview

The VA home loan is one of the most powerful benefits available to veterans. It allows you to buy a home with no down payment, no private mortgage insurance (PMI), and competitive interest rates. For veterans who qualify for a funding-fee exemption, the benefit can be even more valuable.

Key advantages

Eligibility

You’re eligible for a VA home loan if you meet service requirements:

• Active duty: Currently serving or served at least 90 continuous days during wartime or 181 days during peacetime
• Veterans: Met minimum active duty service requirements based on era of service
• National Guard/Reserves: 6+ years of service, or 90+ days of active duty under Title 10 orders
• Surviving spouses: Un-remarried spouse of a veteran who died in service or from a service-connected disability

You’ll need a Certificate of Eligibility (COE) to prove your eligibility to lenders. Apply at VA.gov/housing-assistance/home-loans/how-to-request-coe or through your lender.

Disability rating advantages

Funding fee exemption

The VA funding fee is a one-time charge that typically ranges from 1.25% to 3.3% of the loan amount. On a $300,000 home, that’s $3,750 to $9,900.

Veterans who meet the VA’s funding-fee exemption rules do not have to pay this fee. That usually includes veterans receiving disability compensation and certain other qualifying borrowers.

If you paid the funding fee before receiving your disability rating, you may be entitled to a refund. Contact the VA at 1-877-827-3702 to request a retroactive refund.

Property tax exemptions

Many states offer property tax exemptions for disabled veterans. The exemption amount varies by state and disability rating. Veterans rated 100% often receive full property tax exemption. Check your state benefits page for details.

Specially Adapted Housing (SAH) grants

Veterans with certain severe service-connected disabilities may qualify for grants to modify or build an adapted home:

• SAH Grant: Up to $126,526 for FY 2026
• SHA Grant: Up to $25,350 for FY 2026
• HISA Grant: HISA has separate lifetime caps and should be verified with your VA facility before relying on a specific amount

How to get a VA home loan

Step 1: Get your Certificate of Eligibility (COE)

• Apply online at VA.gov
• Or ask your lender to obtain it (most can pull it electronically)

Step 2: Get pre-approved

• Shop multiple VA-approved lenders (rates and fees vary)
• Provide income verification, credit check, and COE
• Compare loan estimates from at least 3 lenders

Step 3: Find a home

• Work with a real estate agent experienced with VA loans
• The home must meet VA Minimum Property Requirements (MPRs)
• VA appraisal is required (different from a home inspection)

Step 4: Close on your loan

• VA appraisal and any required repairs must be completed
• Review and sign closing documents
• No down payment required (though you can put money down to reduce the loan amount)

VA loan types

• Purchase loan — Buy a home with no down payment
• Cash-out refinance — Refinance your current mortgage and take cash from your home equity
• Interest Rate Reduction Refinance Loan (IRRRL) — Streamline refinance of an existing VA loan to a lower rate
• Native American Direct Loan (NADL) — For eligible Native American veterans to buy, build, or improve a home on Federal Trust Land

Common mistakes to avoid

1. Not shopping multiple lenders — VA loan rates and fees vary significantly between lenders. Even a 0.25% rate difference saves thousands over the life of the loan.
2. Skipping the home inspection — The VA appraisal is not a home inspection. Always get an independent inspection.
3. Not claiming your funding fee exemption — Make sure your lender knows about your disability rating before closing.
4. Assuming VA loans are harder to close — Modern VA loans close at similar speeds to conventional loans. Educate your real estate agent if needed.

How your disability rating connects to home loans

• Qualifying compensation or exemption status — Funding fee may be waived
• Higher ratings — Higher monthly VA compensation gives you more income to qualify for larger loans
• 100% P&T — May qualify for SAH/SHA grants for home modifications
• Use our VA disability calculator to see your monthly compensation, which lenders include as qualifying income

This content is for informational purposes only and does not constitute legal or medical advice. For personalized guidance, consult a VA-accredited VSO, attorney, or claims agent.