According to the United States code 38, a veteran is a person who has served in the active military, naval, or air service. They were discharged or released from duty under conditions other than dishonorable.
In this article, we will look at ways in which veterans and their spouses can access home financing to become home owners. We look at noncommercial, traditional, and nontraditional ways veterans can obtain financing to support their housing needs. At the center of this search for proper housing for veterans, their spouses, and children is the U.S. Veterans Affairs (VA).
Housing benefits available to veterans
The VA home loan program is most recommended, as the federal government is the loan certifier. Since it is a guaranteed commercial loan, the borrower may not require a down payment because underwriters fully acknowledge the VA guarantee.
The Federal Housing Administration (FHA) also provides active or former servicemen and women, as well as seniors, the chance to purchase a home, renovate one, or make improvements to achieve energy efficiency.
Cash-out Refinance Loans (CRL) are a substitute to standard home equity loans. Though mostly charged at lower rates of interest, the borrower incurs carrying or closing costs. The benefits of the lower rate must outweigh the pain of closing costs for a cash-out refinance loan to be a reasonable option.
The Interest Rate Reduction Refinance Loan (IRRRL) is another option. It is also known as a “VA Streamline”. It converts a VA home loan guaranteed by the U.S. Department of Veterans Affairs into a fixed or other type loan.
The Native Americans Direct Loan (NADL) is a direct loan for eligible veterans, who are Native Americans living on federal trust land, for the purpose of acquiring a home. This could cover buying as well as renovation.
Adapted Homes for Disabled Veterans can also be funded. The VA provides grants to veterans with specific service associated disabilities to build an adapted home, install ramps, widen doors, or make any modification required to live more independently. There are three grants: specially adapted housing, special housing adaptation, and temporary housing adaptation.
To learn more about housing benefits available to veterans, you visit:
- The home loans section of Veterans Affairs. Benefits to veterans
- Virginia Department of Veterans Services: Home loan guarantees
- com’s report on the program for Native Americans.
- The University Missouri page on adapted housing grants for wounded warriors and disabled veterans.
VA Mortgage Guarantee program
This is a mortgage loan designed to offer long-term financing to eligible American veterans or their surviving spouses. They are provided by private lenders such as banks and mortgage companies. Since the loan is VA Guaranteed, the lender is able to provide more favorable terms. The amount to lend is therefore much higher than a conventional loan.
History of the program
The program dates back centuries ago to 1636 when the Pilgrims of Plymouth were at war with the Pequot Indians. The pilgrims passed a law that stated disabled soldiers will be supported by the colony. In the 17th century, the program provided pensions to disabled soldiers. In the 18th century, the federal government authorized domiciliary and medical facilities for veterans. In the 19th century, the nation’s veterans’ assistance program was expanded under the Servicemen’s Readjustment Act of 1944 which authorized the VA to guarantee or insure home, farm, and business loans made to veterans by lending institutions.
Also, the Veterans Housing Act of 1970 removed all termination dates for applying for VA-guaranteed housing loans, as well as providing for VA-guaranteed loans on mobile homes. Later, the Veterans Housing Benefits Improvement Act of 1978 expanded and increased the benefits to many veterans. More recently, the Veterans Home Loan Program Amendment of 1992 passed, which expanded eligibility to include Reservists and National Guard personnel.
To learn more about the history of the VA Mortgage guarantee program, visit
- Veterans United: Seven decades of success: A brief history of the VA loan
- Federal Housing Finance Agency: History of government financing
- At a state level, you can read about what FloridaVets.org has been doing on their About us
To learn more about what they are doing today, visit:
- Vets First: Knowledge books
Advantages and Disadvantages of the VA Program
- Taking care of disabled or unemployed veterans housing needs.
- Stepping in to assist a homeless veteran with getting back on his or her feet.
- Practicality stemming from the low cost of the loan.
- No need for a down payment or loan insurance.
- In the event of refinancing there is an option of avoiding closing costs, while some closing costs on conventional loans are disallowed in VA Loans.
- There is added advantage of inspection of the property by a VA inspector to ensure the property meets requisite standards of living. Evaluation is thoroughly done and a VA certificate issued suggesting reasonableness of the property value.
- Assisting the spouse and children of veterans with acquiring a home. There is also offered vocational rehabilitation and assistance in finding employment for veterans.
- Negotiated interest rates make the loans affordable.
- Strict eligibility criterion.
- Limited guarantee as there is a limit on the amount of liability VA can assume on any given loan borrowed.
- Sellers preferring to avoid VA loans.
To learn more on the advantages of VA loans:
- Forbes: The many advantages of VA loans
- Tarrant County: VA home loan benefits
- Mecklenburg County: Home loan guaranty benefits
- Petersburg College: VA home loan guaranty program
Qualifying for a VA Home Loan
One must have a suitable credit score, sufficient income, and valid Certificate of Eligibility (COE). On top of that, the home must be for personal use. The person should be: a service member; a veteran discharged in an honorable stature, unmarried spouse, a spouse of a service member missing in action, a surviving spouse who remarries past 57 years of age from December 16, 2013, or a surviving spouse of a totally disabled veteran.
To learn more on eligibility for a VA loan, visit:
- Congressional Research Service: Who is a “veteran”? Basic eligibility for veterans’ benefits
- North Seattle College: Financing residential real estate
- Lifeline for Vets: VA guaranteed home loan
Adaptive Housing grants
This is a VA provided grant to veterans with specific service associated disabilities to build an adapted home or install ramps, widen doors, or make any modification to live more independently. There are three types of adaptive grants: specially adapted housing, special housing adaptation, and temporary housing adaptation.
To learn more on adaptive grants, visit:
- Senior Veterans Service Alliance: Home renovation grants
- Vets 101: FAQ
- Ohio Benefits: Veterans adaptive housing
- United Spinal Association: Home modifications
Emergency Help to Homeless Veterans
The VA conducts outreach programs seeking out distressed veterans. It connects homeless and at-risk veterans with housing solutions and other required support. They collaborate with other players within and outside of the government to expand employment and affordable housing options for homeless veterans.
To learn more on homeless veterans’ assistance visit:
- National coalition for Homeless Veterans: Immediate help
- Veterans Multi-Service Center: Homeless veteran services
- Arizona Department of Veterans’ Services: Handbook for homeless veterans and service providers
- Veteran’s suicide prevention services can be reached at 1-800-273-8255
The VA cautions borrowers to act quickly at the first sign of trouble. This include taking action to modify the loan, using conventional loan assistance, and providing an interest rate reduction refinance loan or short sale.
To learn more on foreclosure prevention by VA, visit:
- US Department of Housing and Urban Development: Avoiding foreclosure
- Home Guides: Foreclosure help for retired veterans
- NOLO: Help for veterans struggling with mortgage payments
States can assist veterans in obtaining benefits and to help them obtain and prepare evidence that proves their entitlement. They may also provide temporary financial assistance to veterans and their dependents.
To learn more on how states are assisting veterans, visit:
- Washington State Department of Veteran Affairs home page
- Department of Veterans Assistance- State of West Virginia home page
- Pennsylvania Department of Military and Veterans Affairs home page
- National Resource Directory search feature
Potential Reasons to use Traditional Financing
- For purpose of avoiding foreclosure.
- The veteran is unable to meet eligibility criterion to access a VA guaranteed loan
- Income eligibility.
- The access and availability of traditional financing.
To learn more, visit:
- USA.gov: Mortgages
- Consumer Finance: Loan options
- Federal Reserve: Refinancing
- Benefits for elderly and disabled veterans can be found through Area Agency on Aging.
- Employment of veterans can be learned about via the S. Department of Labor.
- Health care for veterans information can be found at RAND.