5 Mortgage Assistance Programs Every Veteran Should Know About

How Veterans Can Get Help With Buying or Keeping a Home

If you're a U.S. military service member, veteran, or surviving spouse, there are special mortgage programs and grants that may help you buy, refinance, or keep your home. Some of these programs come from the federal government, while others are offered by individual states. The Department of Veterans Affairs (VA) also provides free support if you're having trouble making your mortgage payments.

This article gives a quick overview of five key mortgage programs and housing resources that many veterans find helpful:

• VA home loans: Flexible, low-cost home loans backed by the VA

• VA foreclosure avoidance help: Free financial counseling and support to avoid losing your home

• VA interest reduction rate refinancing: A simpler way to lower your mortgage rate on an existing VA loan

• Grants for disabled veterans: Housing grants to make your home more accessible if you have a service-connected disability

• State-based housing programs: Extra help from your state, such as down payment assistance or land-buying programs

Let's take a look at each option in depth.

VA Home Loans

One of the most useful military benefits is access to Veteran Affairs (VA) home loans. These loans are backed by the U.S. Department of Veterans Affairs and were created for U.S. military service members, veterans, and eligible surviving spouses.

There are several benefits of using VA loans to purchase a home:

• VA loans don't require a down payment.

• VA loans don't require you to carry private mortgage insurance (PMI). PMI can add hundreds to your monthly payment, and it only protects the lender, not the borrower.

• VA loans have competitive interest rates. Lower rates help decrease your monthly cost and can save you thousands throughout your loan.

• VA loans are available even if your credit is low. This is because a VA loan is guaranteed by the federal government and is less risky for private lenders. 

How Long Do VA Loan Benefits Last?

VA loans are a lifetime benefit for eligible service members, veterans, and some surviving spouses. You can use them more than once, and in some cases, even have two VA loans at the same time.

If you've filed for bankruptcy or gone through a foreclosure on a home with a VA loan, you may still be able to use your VA loan benefit again. Most lenders will want to see a waiting period of about two years before approving another VA loan, but this is often shorter than the wait for other types of loans.

Is a VA Loan Ever a Bad Idea?

For many people, VA loans are a helpful option when buying a home. But some eligible buyers choose to look into conventional loans instead — especially if they have strong credit and can make a down payment of at least 20%. Going this route can help them avoid the VA funding fee, which is a cost added to most VA loans.

VA Help To Avoid Foreclosure  

Veterans and surviving spouses of veterans are eligible for help from the VA, even if their home loan isn’t a VA loan.

For example, if you're a homeowner and you're having trouble making payments or facing foreclosure, you can get free financial counseling from the VA.

If you have a VA loan, you may be able to work with a VA loan technician. They can help you understand your options, talk with your lender, and provide free financial counseling. There are two ways to contact a technician:

• Call 877-827-3702 (TTY: 711) Monday through Friday, 8:00 a.m. to 6:00 p.m. ET.

• Send a message online through the VA's Loan Guaranty support portal. You’ll need to sign in or create an account first.

Interest Rate Reduction Refinance Loans (IRRRLs) 

If you already have a VA home loan, you might be able to lower your interest rate with an Interest Rate Reduction Refinance Loan, or IRRRL. This is sometimes called a VA streamline refinance because it’s faster and involves less paperwork than a typical refinance.

Many people use IRRRLs to move from a high-interest rate to a lower one. Even a small drop in your rate can save you thousands over the life of the loan. This option can also be helpful if you have an adjustable-rate VA loan and want to switch to a fixed rate, which can make your monthly payments more predictable.

In most cases, IRRRLs don’t require a home appraisal or income verification, which helps speed up the process. But if you have a second mortgage that's not a VA loan, the second lender usually has to agree to keep the VA loan as the primary mortgage.

Disabled Veteran Housing Assistance Programs

The VA provides grants for disabled veterans to build or modify a house to adapt it for their disability. If you have a service-related disability, there are four VA programs you may be eligible for: 

• Specially Adapted Housing (SAH)

• Special Home Adaptation (SHA)

• Temporary Residence Adaptation (TRA)

• Home Improvements and Structural Alterations (HISA)

If you're awarded grant money, you aren't required to use up the full amount at once. For the SAH, SHA, and TRA grants, you can use money from your grant up to six different times during your lifetime. For the HISA grant, you can use the money for multiple projects, up to the total amount of the grant awarded.

Specially Adapted Housing (SAH) and Special Home Adaptation (SHA) Grants

The SAH and SHA grants allow you to make modifications, such as installing ramps or widening doorways, to your permanent home. This grant is for a home you plan to live in for a long time, even if you don’t live in it yet.

The primary difference between the two grants is that you must own the home to qualify for the SAH grant, while you can still qualify for the SHA grant if a family member owns the home.

The current maximum award is $121,812 for the SAH grant and $24,405 for the SHA grant.

Temporary Residence Adaptation (TRA) Grant

If you're temporarily living in a family member’s home, you may qualify for the TRA grant, which allows the same modifications to a home as the SAH and SHA grants.

To be eligible for a TRA, you must first meet the criteria for either SHA or SAH. Your eligibility then determines the award amount:

• If you qualify for an SAH grant, you can get up to $49,062 through the TRA grant program.

• If you qualify for an SHA grant, you can get up to $8,760 through the TRA grant program.

Home Improvements and Structural Alterations (HISA) Grant

The Home Improvements and Structural Alterations (HISA) grant also allows you to make modifications to a home to adapt it to your disability. It has fewer restrictions on the type and severity of your disability.

If your disability is connected to your military service, you can qualify for up to $6,800 under the HISA grant. If your disability is not service-related, you may still be eligible for a $2,000 HISA grant.

State-Run Mortgage Programs for Veterans 

Many states also offer state-run mortgage assistance and home loan programs for veterans. These aren't connected to the federal VA loans.

These benefits can include lending options, tax credits, and closing costs assistance to help with your home purchase. For example, Delaware lets veterans use the first-time homebuyer tax credit even if they are not first-time homebuyers. In Texas, the Veterans Land Board (VLB) offers eligible veterans up to $150,000 to purchase land. 

If you're buying a new home or having trouble with your mortgage, you can search for local programs in your city or state. Your state’s veterans benefits website can also be a helpful place to find lenders who understand how VA loans work.

Let’s Summarize...

If you're a veteran looking to buy a home, a VA loan can be a powerful tool. With competitive interest rates and no down payment required, it can help you save a lot over time. Whether your loan is through the VA or not, the VA offers free counseling if you're struggling to keep up with payments. It’s often a good idea to reach out to them before talking to your loan servicer about things like modifications or repayment plans. Many states also offer their own programs to support veterans with buying or keeping a home, so it’s worth checking what’s available where you live.