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.

Unlike conventional loans, the VA doesn’t set a maximum loan amount for veterans with full entitlement, and there’s no limit on how many times you can use the benefit.

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.

Entitlement: full vs. remaining

Your VA loan entitlement determines how much you can borrow without a down payment:

• Full entitlement — If you’ve never used a VA loan (or have fully restored it), there is no loan limit. You can borrow as much as a lender approves without any down payment.
• Remaining entitlement — If you have a current VA loan or haven’t restored your entitlement from a previous loan, conforming loan limits apply to the remaining portion. In 2026, the baseline conforming loan limit is $832,750 in most counties, with higher limits in high-cost areas.

To restore full entitlement after selling a VA-financed home, submit VA Form 26-1880 and provide proof of sale or payoff.

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. On a $500,000 home, that’s $6,250 to $16,500.

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.

Funding fee by loan type and usage (2026):

If you paid the funding fee before receiving your disability rating, you may be entitled to a refund. Contact the VA at 1-800-827-1000 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 — for veterans who need wheelchair ramps, widened doorways, roll-in showers, or other major structural modifications
• SHA Grant: Up to $25,350 for FY 2026 — for veterans who need less extensive modifications such as grab bars, accessible fixtures, or pathway adjustments
• HISA Grant: HISA has separate lifetime caps and should be verified with your VA facility before relying on a specific amount — available to veterans with any service-connected disability who need modifications to their home

SAH and SHA grants can be used in combination with a VA loan. If you’re buying a new home and anticipate needing modifications, apply for the grant before closing so you can factor it into your budget.

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 in minutes)
• If you have a disability rating, ensure it’s reflected on your COE for the funding fee exemption

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
• VA disability compensation counts as qualifying income and is tax-free, which lenders may gross up by 25% for qualification purposes

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)
• Condos must be on the VA-approved condo list or get project approval

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)
• Sellers can pay your normal closing costs (no VA-imposed limit) and offer up to 4% of the purchase price in additional concessions (rate buydowns, prepaid expenses, etc.)

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 (minimal paperwork, no appraisal required in most cases)
• Native American Direct Loan (NADL) — For eligible Native American veterans to buy, build, or improve a home on Federal Trust Land
• Adapted housing grants — SAH, SHA, and HISA grants for home modifications (can be combined with a VA purchase loan)

Using your VA disability compensation to qualify

Your VA disability compensation is a significant advantage in the lending process:

• Tax-free income — Lenders can gross up tax-free VA compensation by 25%, meaning $3,000/month in VA pay can be treated as $3,750/month for qualification
• Stable income — VA compensation is considered reliable, permanent income by lenders (especially with P&T designation)
• Combined with employment income — You can combine VA compensation with salary, wages, or retirement pay to qualify for a larger loan
• Use our VA disability calculator to see your estimated monthly compensation, which you can then include in mortgage qualification discussions

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. The appraisal ensures the home meets VA MPRs and verifies value, but it won’t catch everything.
3. Not claiming your funding fee exemption — Make sure your lender knows about your disability rating before closing. If your rating is pending, you can still close and request a retroactive exemption once the rating is awarded.
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.
5. Not restoring entitlement — After selling a VA-financed home, submit VA Form 26-1880 to restore full entitlement before your next purchase.
6. Ignoring state-level property tax benefits — A property tax exemption can save you hundreds or thousands per year depending on your state and rating level. Check your state benefits before choosing where to buy.

How your disability rating connects to home loans

• Qualifying compensation or exemption status — Funding fee may be waived, saving thousands at closing
• 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
• Tax-free income — All VA disability compensation is tax-free, and lenders can gross it up for qualification
• 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.