The VA loan is offered to most veterans – disabled or not. There are certain requirements regarding the amount of time spent in the military before a Certificate of Entitlement is offered, but in general, most veterans are eligible. To take matters a bit further, however, some veterans have additional benefits as a result of becoming disabled during active duty. These benefits may be available before they ever close on the purchase of their home or later on if the disability was not fully documented at the time of closing.
Who gets a Certificate of Entitlement?
It is fairly easy to get your Certificate of Entitlement to obtain a VA loan. In general, you must serve 90 days if you are serving during a period of war. If you are serving in the military during a non-war period, you must serve at least 181 days in order to qualify. If you were in the National Guard, a period of 6 years of service is required in order to obtain the certificate. These requirements apply to those that had an honorable discharge or general discharge though. If you had a dishonorable discharge, you will not be eligible for a Certificate of Entitlement under any circumstances. If you have a questionable discharge, such as a Bad Conduct discharge, it is up to the VA to decide if you are entitled to a certificate – there is no cut and dry answer; your situation must be evaluated.
Waiving the VA Funding Fee
If you have yourCertificate of Entitlement and are disabled, you may be eligible to have your VA Funding Fee waived. This is dependent on certain circumstances though. You must currently receive disability benefits in order to have the fee waived. The disability must be in place before you close on the purchase of your home. If you are disabled, yet it has not been fully approved and/or recognized by the VA, meaning you are not receiving disability benefits before you close on your loan, then you will have to pay the funding fee at the closing, however you may be eligible for a refund in the future. The key factor is that you have a claim already started with the VA regarding your disability in order to have the funding fee possibly waived and/or refunded in the future if you are not currently receiving benefits. If you apply for disability after you close on the purchase of your home, you will not be eligible for a refund.
How to Get a VA Funding Fee Refund?
Getting a VA Funding Fee refund on a VA loan is not something that happens automatically. If you are not deemed disabled and receiving benefits before you close on the loan, you will have to do the legwork to get your refund after everything is approved. You will have to send in a written request for the refund to your Regional VA Center to get the process started. Once the request is received and approved, you will have two options for the refund to be applied:
- If you paid for the funding fee with your own cash at the closing, meaning you wrote a check at the closing rather than rolling it into your loan; you can receive cash back to you for the amount of the funding fee. For example, if you paid 2.15% of a $175,000 loan, you would receive $3,762.50 back in cash from the VA.
- If you rolled the funding fee into your loan amount and are financing it through the term of your mortgage, you will not receive cash back. Instead, the refund will be applied directly to the principal amount of your loan. This means in the above example, that $3,762.50 would be applied to your principal, knocking it down by that amount.
Making your House Adaptable
If you are purchasing a home with a VA loan and are certified as disabled by the VA, you may be eligible for grants to help make your home accessible. The Specially Adapted Housing Grant may help you to have the funds necessary to make your home easier for you to navigate. The modifications can be made to an existing home that is already built or a home that is being built for you in order to make it easier and more comfortable for you to live in as a result of your disability.
In addition to the above savings, as a disabled veteran, you may be eligible for certain tax savings. In addition to be able to write off the interest you pay on your VA loan, there are certain other protections that may help you save money as a result of your disability. There is the Disabled Veterans Property Tax Exemption to help you afford the property taxes and help increase your disposable income. There is also the Mortgage Credit Certificate, which allows a credit for the interest you paid on your VA loan. This amount varies by state, so you will need to check your individual state’s requirements to see what you are eligible to receive.
It is important for you to determine all benefits you have regarding your VA entitlement. Aside from being able to obtain an affordable VA loan, there are many other ways that the federal and state government are willing to help you in exchange for the sacrifice you made for our country. Your disabled status will help you to obtain a home that is easy to live in despite your disability as well as help you to afford the loan a little easier. Talk to your lender and or VA specialist about what you are eligible to receive in order to ensure that you have used your benefits and are maximizing your disposable income in the end.