Disabled veterans have access to special benefits when applying for VA loans. This guide explores the eligibility guidelines along with the perks 100 percent disabled veterans enjoy. You’ll also learn more about the application process, common challenges you may face and potential solutions to make the process as seamless as possible.
Can You Get a Home Loan with 100% VA Disability?
Yes, it’s possible to qualify for a VA home loan with a 100% VA disability rating. However, there are other eligibility guidelines you must meet to secure funding. More on these shortly.
How Does the 100 Percent Disabled Veteran Home Loan Program Differ from Other VA Home Loans?
As a disabled veteran, you can capitalize on several perks when you take out a VA home loan. You may find it easier to qualify for a loan as lenders recognize the stability of VA benefits. Furthermore, you won’t pay a funding fee if you have a service-connected disability. And there’s also the possibility of accessing grants if your disability requires you to modify your home so it’s more livable.
Who Qualifies as a 100 Percent Disabled Veteran?
Individuals who meet these criteria have a disability rating of 100 percent by the U.S. Department of Veterans Affairs (VA) as a result of a service-connected disability. You must present medical records and other supporting documentation to prove your case to the VA and demonstrate that your condition is linked to military service.
Eligibility Criteria
If you’re a 100 percent disabled veteran considering a VA home loan, here’s what you need to know about the lending guidelines.
Documentation Required
You’ll need a Certificate of Eligibility (CEO) to prove you meet the VA’s service requirements. Lenders will also request Form DD-2214, which details your service and discharge status, along with proof of your disability rating from the VA.
Income and Credit Requirements (or Lack Thereof)
The preferred debt-to-income (DTI) ratio for VA loans is 41%, although some lenders may be willing to go higher. This figure represents the percentage of your gross monthly income used to cover debt obligations.
Regarding credit scores, the VA does not have a minimum requirement, but most lenders prefer a score of at least 620 to qualify for a mortgage.
Benefits of 100 Percent Disabled Veteran Home Loan
Here’s a closer look at the specific benefits associated with VA home loans for 100% disabled veterans.
No Down Payment Requirement
You can get approved for a VA home loan with no money down. This means you can make your homeownership dreams a reality sooner, even if you don’t have a large amount of money saved.
No Private Mortgage Insurance (PMI)
VA loans also skip the PMI requirement you’ll find with conventional loans if you put less than 20% down. By avoiding PMI, you save hundreds of dollars each month and get more affordable mortgage payments.
Lower Interest Rates
These mortgages generally come with lower interest rates than conventional loans since they are guaranteed by the VA. The backing helps reassure lenders that they’ll be covered in the event of a default.
Closing Cost Limitations
VA loans have strict guidelines for closing costs to ensure they’re reasonable. This protects borrowers from excessive upfront costs and makes homeownership more affordable and accessible.
Property Tax Exemptions
Many states offer property tax exemptions for disabled veterans. Depending on where you reside, these exemptions can significantly reduce or eliminate your property tax bill and make your housing costs even more affordable.
Adaptation Grants for Disabled Veterans
As aforementioned, adaptation grants are available to disabled veterans. They are designed to provide the funding needed to make modifications to accommodate disabilities, like widening doorways and installing ramps.
Application Process
When you’re ready to apply, here’s what you need to know.
Steps to Apply
Start by securing your COE, as it confirms your entitlement to a VA loan. You can access it online through the VA eBenefits portal, your lender or by postal mail. Be mindful that the latter could take far more time, so applying online is ideal.
Selecting a VA-Approved Lender
Research several lenders to find the best fit. The lenders that make your shortlist should be VA-approved lenders with extensive experience in VA loans and an understanding of the unique needs of disabled veterans.
Browse reviews from past and current customers to get a feel of what to expect if you decide to do business with the lender. And pay attention to each lender’s eligibility guidelines, along with the advertised interest rates and fees. It’s also worth getting pre-approved with your top picks and comparing loan quotes to identify the most attractive loan offer.
Tips for Improving Chances of Approval
Below are some suggestions to help boost your approval odds:
- Increase your credit score. Check your credit report for errors. If you spot inaccuracies or outdated information, file disputes promptly with the proper credit bureau(s) – Experian, TransUnion and/or Equifax.
- Put money down. VA loans don’t require a down payment. But putting money down means you can borrow less and could increase the likelihood of getting approved.
- Respond promptly to lender inquiries. There’s a possibility that the lender will request additional information once you’ve applied for a mortgage. Be sure to provide what’s needed promptly to avoid delays in the processing of your loan application.
Common Challenges and Solutions
It’s also essential to understand the challenges associated with securing a VA home loan as a 100% disabled veteran and potential solutions.
Navigating the Paperwork
Understand the documentation requirements before you apply, as VA lenders require specific documents before they can approve you for a loan. Confirm they are complete and accurate to avoid delays or an inadvertent denial.
Overcoming Credit Issues
You could face hurdles when applying for a VA loan if you have a lower credit score. So, it’s in your best interest to improve it before applying to give yourself the best chance at getting approved for a mortgage with favorable terms.
Finding Accessible Homes
It can also be challenging to find a property that meets your accessibility needs if you have a physical service-related disability. But you’re not completely out of luck, as you can get a loan to fund the home purchase and renovation costs. Or you can consider building a new home that meets your needs.
Conclusion: Taking Advantage of Available Benefits
As a 100 percent disabled veteran, you have access to enhanced VA loan benefits. Contact your VA regional loan center to learn more about these perks. You can also shop around with lenders to understand your borrowing power and what to expect in terms of rates, fees and monthly mortgage payments.
Frequently Asked Questions (FAQs) About 100 Percent Disabled Veteran Home Loan
It depends on your entitlement and the value of the property you want to purchase. Get pre-approved with a VA-approved lender to get an idea of your borrowing power.
You won’t pay a funding fee as a 100% disabled veteran. However, you will be responsible for closing costs, which can be rolled into the loan amount.
Yes, you can use these benefits to refinance your current mortgage. You can choose from the Interest Rate Reduction Refinance Loan (IRRRL), also known as a VA Streamline Refinance or a VA Cash-Out Refinance.
