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5 Mortgage Assistance Programs Every Veteran Should Know About

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In a Nutshell

If you are a US military service member, a veteran, or a surviving spouse you may have access to special mortgage assistance programs and grants that can be helpful in buying, refinancing, and modifying a personal home loan. These homeownership programs exist at both the federal and state level. Additionally, the Department of Veterans Affairs provides assistance and counseling if you have difficulty making mortgage payments. This article gives a brief overview of five mortgage assistance programs every veteran should know about.

Written by Attorney Aan Malahia Chaudhry
Updated September 29, 2021

If you are a US military service member, a veteran, or a surviving spouse you may have access to special mortgage assistance programs and grants that can be helpful in buying, refinancing, and modifying a personal home loan. These homeownership programs exist at both the federal and state level. Additionally, the Department of Veterans Affairs provides assistance and counseling if you have difficulty making mortgage payments. This article gives a brief overview of five mortgage assistance programs every veteran should know about.

VA Home Loans

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

There are many benefits of using VA loans to purchase a home. The principal benefit is that VA loans require no down payment. Additionally, VA loans do not require you to carry private mortgage insurance (PMI). PMI is attached to most other mortgages with a down payment of less than 20%. PMI can add hundreds to your monthly payment and they only protect the lender, not the borrower. With a VA loan, even with a  down payment of $0, you avoid having to pay PMI. 

VA loans also have competitive interest rates. Lower rates help bring down your monthly cost and can save you thousands throughout your loan. Additionally, 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. 

VA loans are considered a lifetime benefit and can be used again and again as long as you remain eligible. Under certain circumstances, you may even have two VA loans at the same time. They are accessible even if you’ve filed bankruptcy or if your VA mortgaged home was foreclosed. In either case, mortgage lenders will typically require a two-year wait before you can get a VA loan. This waiting period tends to be shorter than for other conventional loans. 

VA loans can be a very powerful tool in the home buying process. However, eligible individuals may consider conventional loans if they have a high credit score and can put 20% down. In this case, they will avoid VA funding fees that are applied to VA mortgages. 

VA Help To Avoid Foreclosure  

If you are a veteran or the surviving spouse of a veteran, you are eligible for help from the VA, even if your home loan isn’t a VA loan. For example, if you are a homeowner who is having trouble making payments or is facing a foreclosure, you can get free financial counseling from the VA. If you do have a VA loan, you can also connect with a VA loan technician who can help in dealings with your lender and provide financial counseling. 

In July 2021, the VA announced the COVID-19 Refund Modification Option to provide relief to borrowers experiencing financial hardships related to the coronavirus pandemic. Under this modification, veterans can receive a 20% (or more) reduction in their monthly mortgage payments. Additionally, the VA will also purchase past due payments and up to 30% of unpaid principal. 

The amount purchased will be secured by a junior lien on the property. The lien will not accrue interest and won’t need to be repaid until the refinance or sale of your property. Borrowers can also modify existing loan terms to extend the loan repayment period by up to 10 years. This modification will be available until October 28, 2022.

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Interest Rate Reduction Refinance Loans (IRRRLs) 

If you have a VA home loan, you may be able to benefit from Interest Rate Reduction Refinance Loans, or IRRRLs, also known as VA streamline refinancing. If you are paying a high interest rate on your current VA loan, you can use IRRRLs to refinance to a lower rate. Even a one-point reduction can save you thousands throughout your loan term. IRRRLs can also be beneficial if your VA loan has an adjustable interest rate. In this case, you can switch to a fixed rate, which can stabilize your monthly payments. 

IRRRLs are efficient because they require less paperwork than conventional refinances and usually do not require an appraisal. However, if you have a second, non-VA loan on your home, then you must have the lender agree to allow the VA loan to be the first mortgage listed. 

Disabled Veteran Housing Assistance

The Department of Veterans Affairs 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), and 

  • Home Improvements and Structural Alterations (HISA).

The SAH and SHA grants allow you to make modifications, such as installing ramps or widening doorways, to your permanent home. This is 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 $100,896 for the SAH grant and $20,215 for the SHA grant.

If you are temporarily living in a family member’s home, you may qualify for the TRA grant. The TRA grant 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. If you qualify for the SAH, your total award under the TRA can be up to $40,637. If you instead qualify for the SHA, the TRA can provide up to $7,256.

The Home Improvements and Structural Alterations (HISA) grant also allows you to make modifications to a home to adapt it to your disability but 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 the HISA grant. However, you will not have access to the full grant maximum, but instead will be limited to a lifetime limit of $2,000.

If you are awarded money under these grants, you are not 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 6 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.

State-Run Mortgage Programs for Veterans 

Many states also offer state-run mortgage assistance and home loan programs for veterans. These are not connected to the federal VA loans and are state-based veteran housing benefits. 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 home buyers. In Texas, the Veterans Land Board (VLB) offers eligible veterans up to $150,000 to purchase land. 

If you are buying a new home or having trouble with your mortgage, it’s always a good idea to search for local programs in your city or state. Veterans benefits sites for your specific state can also be good resources and provide references to lenders knowledgeable in VA loans. 

Laws and Programs That Aren’t Just for Veterans: Bankruptcy, Forbearance, and Repayment Plans

Some people find that filing bankruptcy can help them stay in their homes by giving them the ability to keep current with their mortgage payments. A Chapter 7 bankruptcy allows you to eliminate unsecured debts like credit card debt and medical debt which can free up cash to make your mortgage payments. Upsolve is a non-profit that offers a free online tool to eligible individuals wishing to file Chapter 7 bankruptcy without a lawyer. 

If you’ve already fallen behind on your mortgage, you may be able to make use of a forbearance or repayment plan with your lender. Veterans can call 877-827-3702 to speak with a VA loan technician to get advice before calling their mortgage servicer.

Let’s Summarize...

If you are a veteran buying a new home, a VA loan can be a great option. With no down payment requirements and low-interest rates, this is a benefit that can save you a lot of money. Whether you have a VA loan or a non-VA loan, the VA offers counseling to veterans struggling with their mortgages. Before you ask your loan servicer for a modification or payment plan, it’s smart to talk to the VA first as they can help you navigate technical details. Many states also offer programs that provide veteran housing benefits in different ways. Upsolve is here to help you learn about mortgages and what to do if you are struggling with your home loan or other types of debt.

Written By:

Attorney Aan Malahia Chaudhry


Aan Malahia Chaudhry is a Los Angeles-based attorney who works in the field of Legal Tech. She graduated from Thompson Rivers University, Faculty of Law in Canada in 2020 and was admitted to the Massachusetts State Bar. During law school, she participated in a variety of extracur... read more about Attorney Aan Malahia Chaudhry

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