There are thousands of military veterans and active-duty service members in the United States, and many need financial assistance to purchase a home. The U.S. Department of Veterans Affairs (VA), state and local governments, as well as various foundations guarantee or offer programs specifically designed to help veterans who are in this predicament.
Some of these programs include:
Not only are veterans and active-duty service members eligible for a VA loan, but some surviving spouses, reservists and Natural Guard members are, too. This loan is guaranteed by the VA and offered by mortgage lenders. One of the major advantages of obtaining a VA loan is that a down payment is typically not required, which is extremely helpful for home buyers, as they don’t have to worry about being able to pay a certain percentage of the loan to qualify. (Still, there are other upfront costs to keep in mind, such as home inspections, appraisals and funding fees.)
Since people who receive a VA loan aren’t usually obligated to put money down, you may think they would need to pay private mortgage insurance (PMI). However, this isn’t the case due to the fact that the VA guarantees the loan, as aforementioned.
VA loan requirements are also a bit more lenient than conventional mortgage loans, in terms of credit and income. This makes it easier for applicants to get approved.
Specially Adapted Housing Grant
The Specially Adapted Housing (SAH) grant is also a product of the VA. Its purpose is “to help disabled Veterans by providing a barrier-free living environment, such as a wheelchair accessible home, that affords them a level of independent living they may not otherwise enjoy,” as the VA describes.
In fact, service members and veterans with disabilities connected to their time in the service “may be entitled to a grant for the purpose of constructing or modifying a home to meet their adaptive needs, up to the current maximum of $81,080.”
For instance, someone who became blind in both eyes and lost the use of at least one lower extremity would likely qualify. Other conditions apply, as well.
Those who obtain a SAH grant can utilize the funds in a variety of ways. For instance, VA states on its official website that the grant can be used to “build a home on land already owned if it is suitable for specially adapted housing” or “remodel an existing home if it can be made suitable for specially adapted housing."
Special Housing Adaptation Grant
The Special Housing Adaption (SHA) grant sometimes gets confused with the SAH grant, but they are two different programs to help veterans buy a home.
“The SHA grant can be used to increase the mobility of eligible” applicants “throughout their residences,” explains the VA. Veterans and service members living with “specific service-connected disabilities may be entitled to this type of grant” and can receive “up to the current maximum of $16,217.”
Someone who suffered from a “severe burn injury,” for example, is eligible for a SHA grant.
There are three main ways this grant could help military home buyers. These are: adapting “an existing home the Veteran or a family member already owns in which the Veteran lives,” adapting “a home the Veteran or family member intends to purchase in which the Veteran will live,” and helping “a Veteran purchase a home already adapted in which the Veteran will live.”
The Dream Makers program, which specifically targets veterans, active-duty service members, reservists and National Guard members, was developed by the PenFed Foundation. As explained by the national nonprofit, “The Dream Makers program offers grants for down payment and closing costs to first-time homebuyers of modest means who valiantly work to protect our country’s national security.”
“The amount of the grant is determined by a 2-to-1 match of the borrower's contribution to their mortgage in earnest deposit and cash brought at closing with a maximum grant of $5,000,” regardless of the type of mortgage loan an applicant obtains.
In terms of financial requirements, applicants must be able to “contribute a minimum of $500,” and their gross annual income must be "no more than 80% of area median income, adjusted for household size,” states the foundation.
There are some restrictions to keep in mind. You can find out more about them on the PenFed Foundation’s officiate website.
Homes for Veterans Program (New York State)
Many state and local governments offer financial support for service members and their families trying to buy a home.
For example, together with New York State’s VA division, the State of New York Mortgage Agency (SONYMA) offers the Homes for Veterans Program. While primarily focused on helping first-time home buyers, this program can also help certain applicants who are looking to move.
There are several benefits for people stationed in New York State who utilize the Homes for Veterans Program. The low interest rates associated with it and the elimination of points or origination fees are two advantages, both of which can help save home buyers money. This program also offers “Down Payment Assistance of $3,000 or 3% of the home purchase price (not to exceed $15,000).”
Learn more about eligibility and terms, here.
Contour Mortgage has been offering mortgage loans to home buyers since 1993. We are especially proud to work with those who are serving or have served in the U.S. military, assisting them as they apply for a VA loan and navigate through the rest of the home-buying process. Contact us today to find out how we can help you.