From home-buying grants to veterans’ home buying-assistance programs, there are lots of resources available to military members and veterans looking to purchase a home. Our VA home buying guide breaks it all down.
Homeownership has long been an integral part of the American Dream for many people. That includes military members and veterans who have sacrificed so much to protect that dream.
But buying a new home is no simple feat—whether you’re a first-time homebuyer or experienced when it comes to homeownership. Fortunately, service members have access to a few unique programs that can alleviate that burden and make achieving the American Dream easier. This VA home loan guide will explain it all.
In this guide:
Pros & cons of homeownership
Homeownership certainly comes with some key opportunities, but it’s not without difficulties. Make sure to consider both sides carefully before making any moves.
- You can build equity: No more throwing rent into the proverbial black hole. With each mortgage payment you make, you gain a larger stake in your property—and its sales profits later on.
- You can alter your home as you wish: Forget landlord rules about paint colors, nail holes, and other alterations. As part of homeownership, you can make any changes to your property you see fit.
- You’re eligible for certain tax deductions: Homeowners get to leverage tax deductions for their mortgage interest, property taxes, home office costs, and other expenses, in certain cases. Some of these write-offs aren’t available for renters.
- You’re responsible for all maintenance: One of the biggest perks of renting is that the bulk of your repair and maintenance tasks fall on the landlord. When you own a home, these tasks (and their costs) are up to you.
- You’ll have additional expenses: A home comes with a number of expenses that just aren’t there with a rental—things like property taxes, HOA dues, maintenance costs, closing costs, and more. You may also have to pay for private mortgage insurance (PMI), depending upon the terms of your home loan.
- It’s often a long and daunting process to buy a home: It can take a significant amount of time and energy to buy a house. You have to get your finances in order, apply for a mortgage, find the right property, get it inspected, and complete a number of other to-dos before the home is yours.
Veteran Home Buying Assistance: Tips & tools to know about
If you’re set on buying a home, there are a number of veteran assistance programs you can leverage along the way. See below to learn more about each one.
VA loans are mortgages just for veterans, military members, and their spouses. To qualify, you need to meet certain military service requirements set by the Department of Veterans Affairs. Some Reservists and members of the National Guard may also be eligible for VA loans.
VA loan process
To get a VA loan, you’re going to need a Certificate of Eligibility from the VA, which essentially proves you meet the service requirements to qualify for the loan. To get your COE, you need to head to your eBenefits account and apply there. It can often take more than a month to receive this document, so apply well ahead of your planned home purchase.
Once you have a COE in hand, you’ll need to get pre-approved for your VA loan with a mortgage lender. Be careful here: Not all lenders offer VA loans, so make sure the one you’re considering offers them before submitting an application.
After you’ve been pre-approved, you can find the right property, sign your sales agreement, and fill out your lender’s full application. In addition to your COE, you’ll need to provide various financial documents (bank statements, W-2s, paystubs, etc.), as well as submit to a check of your credit score.
How to buy a house with a VA loan
The exact underwriting and approval process for your VA loan will depend on your mortgage lender, but you can generally expect it to take anywhere from four to six weeks.
You’ll need to submit your application, provide all the requested financial documentation, and work with your VA loan officer to address any concerns that might crop up along the way. Your home will also need to be appraised by a VA-approved appraiser to make sure it meets certain safety requirements.
Finally, at closing, you will need to pay your VA funding fee, a one-time payment on the VA loan designed to offset the cost of the loan program to U.S. taxpayers. You can also choose to roll this into your loan balance. VA loans are the only type of mortgage product that requires a funding fee (most others require mortgage insurance).
VA renovation loans
VA renovation loans allow you to purchase a home and fund its rehabilitation and renovation all at once. You can also use a VA renovation loan if you want to refinance your existing mortgage to help fund any upgrades or repairs your property may need.
Though VA renovation loans are fairly flexible, they can only be used to tackle certain approved renovation projects, so make sure yours are on the list before choosing one of these loans for your property. Our guide to VA renovation loans can help.
The GI Bill is designed to provide service members returning home from active duty with much-needed education and training as they restart civilian life. It affords vets money for tuition and educational fees, as well as a monthly housing allowance while they attend school.
How to use the GI bill to buy a house
Naturally, many veterans wonder if they can use their GI Bill housing allowance to buy a home of their own. Unfortunately, for the most part, lenders won’t consider your GI income when qualifying you for your home loan—largely because it’s short-term. To prove you have the capability to repay your home loan, lenders generally want to see consistent, long-term income.
You could find a rental property for less than your monthly housing allowance, though, saving the leftovers to put toward a down payment, closing costs, or other fees associated with your home purchase. This could help you buy a home sooner or achieve a lower monthly mortgage payment.
Dream Makers program
The Dream Makers program is a grant program that veterans and military members can use to lower the costs of buying a house. It offers up to $5,000 in matching grants to be used toward closing costs or a down payment.
The total amount for which you can qualify depends on the earnest money and down payment you put up. The program will match your contribution at a 2-to-1 rate. Your down payment has to total at least $500, and applications can be submitted through the PenFed Foundation.
Special Housing Adaptation grant
SHA grants can be used to buy, build, or update your permanent place of residence in order to accommodate a service-caused disability. You can apply for up to three grants, totaling $17,130.
To be eligible, you or your veteran spouse must have one of the following service-related injuries:
- Loss (or loss of use) of both hands
- Severe burns
- Severe respiratory or breathing injuries
- Blindness in both eyes
Specially Adapted Housing grant
If you’re living with a loved one (i.e., not on your own property), then you can use a SAH grant to increase the home’s accessibility. These grants offer up to $37,596 in assistance.
To qualify, you need to have one of the service-related disabilities noted above (under SHA grants) and be living temporarily in a family member’s home.
Many states also offer veteran and military homebuying assistance programs, so be sure to check with your state housing agency, too. In Texas, for example, veterans’ down payment assistance is offered through the Texas State Affordable Housing Corporation.
As the days shorten, you can mitigate many mid-winter headaches with some preemptive prep. Proper weatherizing can help protect your home from preventable damage, save money on energy costs, and, most importantly, keep you and your loved ones safe and warm throughout the winter season. Here is a useful checklist to manage your weatherization project. Setting aside some time on a couple of weekend days should be more than enough to knock this out:
Cracks & Leaks
Examine your entire house for any cracks and leaks, from your roof to your baseboards, to your basement and foundation. With unpredictable winter weather, these cracks and leaks are how the outside gets in, causing cold drafts and water damage.
Luckily, most cracks don’t require a professional to handle it. Depending on your house type and age, it’s likely you’ll be able to do it yourself with supplies from your local hardware store.
Windows & Doors:
Gaps and breaks in windows and doors is another way to let the winter in your home, and they can let heat escape, raising your heat bill throughout the season.
Make sure seals are tight and no leaks exist. If you have storm windows, make sure you put them on before the cold season begins. Additionally, add weather-strips and or a door sweep to prevent drafts and keep the heat in.
Clean your rain gutters of any debris. In colder climates, the buildup will cause gutters to freeze with ice, crack and then leak.
Once you have removed the residue from the drains, test them by running hose water to make sure cracks and leaks have not already formed. Even in warmer locales, the buildup can put undue stress on your roof and home.
Protecting your pipes from freezing should be your number one priority this winter. A burst pipe can quickly become a disaster in any home.
Remember to turn off your exterior water source and take in your hose. Internally, wrapping your pipes is a recommended precaution to take.
Annual checks are vital in avoiding dangers such as house fires. Replace filters if you use a furnace and clear out any vents and ducts that carry heat through them. If you have baseboard heat, wipe them of dust and remove any debris that might catch fire.
Fireplace & Wood Burning Stoves:
Make sure to have chimneys and air vents cleaned early in the season if you are planning on warming your home with a wood-burning source. When your fireplace is not in use make sure to close the damper, some resources estimate an open damper can increase energy consumption by as much as 30%, increasing your bill about $200.
Bring your patio furniture inside or cover it for the winter. Don’t forget other, smaller items such as your tools, including the hose and planting pots. Clear out any piles around the side of your house, checking for cracks and holes in your home and foundation as you go so to avoid providing shelter for unwelcome guests over the cold season.
If your property has large trees check for loose branches and call someone to trim back any limbs that may fall in your yard, on your roof or even damage a window.
Lastly, make sure your emergency kit is up to date with provisions, batteries, fresh water, food for animals, entertainment for kids – especially if you live in an area prone to power outages.