Veteran Housing Assistance Options: Grants, Loans And Programs

Our nation’s veterans risked the ultimate sacrifice in order to ensure the safety and security of all Americans. In return, they deserve all the thanks and resources we can provide.

Among the many programs available, there are various forms of veteran housing assistance. VA loans offer one of the most affordable financing options available anywhere. There are also grants for veterans who need adapted housing as a result of a service-connected injury and options for those struggling to find affordable housing.

Veteran Mortgage Loans

Let’s begin by talking about one of the best mortgage options out there: VA loans. Offered through the Department of Veterans Affairs, not only is this usually a zero-down payment option, but it’s available to the broadest audience of any program we’ll talk about. The loan options are available to any veteran, active-duty service member, reservist or National Guard personnel in any branch who meets minimum service requirements.

There’s a funding fee that’s paid at closing or built into the loan amount. Service-time requirements are based on both when you served as well as your service status. Both funding fee and service-time requirements are waived if you’re receiving VA disability or the surviving spouse of a veteran who passed in the line of duty or who had a service-connected disability.

Purchase Loan

A purchase loan from the VA allows you to buy a single-family home with up to four units. Additionally, you can buy a condo as long as the project is VA-approved or use your loan to purchase a manufactured home.

Although Rocket Mortgage^® doesn’t offer these at this time, you can also use VA loans to build a new home or renovate a home you’re purchasing.

Requirements

The VA doesn’t set specific requirements regarding credit score, but lenders typically do. Rocket Mortgage requires a qualifying credit score of 580 or better. Your house payment can’t comprise more than 38% of your overall debts and your debts can’t exceed 45% of your monthly income.

It’s worth noting that there’s more flexibility in terms of debt-to-income ratio (DTI) if your score is 640 or higher, depending on the size of your down payment, if any.

VA Cash-Out Refinance

A VA cash-out refinance involves converting the existing equity in your home into money that can be used for home improvements, consolidating debt or whatever else you might wish to do with it. The key difference between VA loans and most cash-out refinances is that you can convert the entire value of your home to cash if you qualify.

Requirements

Lenders will have different requirements, but we can speak to Rocket Mortgage. Taking out the full amount of your equity in cash requires a 620 credit score with 45% DTI. Otherwise, you have to leave 10% equity in the home when refinancing. There’s more DTI flexibility if you’re score is 640 or better.

VA Rate-And-Term Refinance

The rate-and-term refinance keeps your mortgage balance the same but allows you to refi for the purposes of lowering your rate and changing your term. You would use this particular option if you were going from another type of loan like a conventional or FHA loan into a VA loan.

Requirements

The way to think about this is that the requirements to qualify are essentially identical to what they would be on a purchase.

VA Jumbo Loans

VA loans generally don’t have a loan limit. There is an exception if you have impacted entitlement, but that only applies if you’re trying to get another loan while still paying the existing one off or you’ve defaulted on a prior VA loan. However, the VA doesn’t cover the full loan amount if you default. Because of this, VA jumbo loans account for higher risk.

Most lenders set the threshold for jumbo limits at conforming loan limits for Fannie Mae and Freddie Mac. That’s $766,550 for a one-unit property in most areas of the country. As with regular VA loans, you can finance the entire home value if you qualify.

Requirements

The minimum credit score on loans up to $1.5 million is 640. You can get loans up to $2.5 million with a score of 680 or higher.

Interest Rate Reduction Refinance Loan (IRRRL)

A VA IRRRL loan serves the same purpose as a rate-and-term refinance loan except there’s less paperwork because income and asset documentation often doesn’t need to be verified and you may not need an appraisal. In addition, the funding fee is only 0.5%.

Requirements

There are several requirements with this loan:

• The previous loan must also be from the VA.
• If you’re going from a fixed rate to another fixed rate, the new rate must be 0.5% lower than the original. If you’re going from a fixed-rate mortgage to an adjustable-rate mortgage (ARM), the rate must be 2% lower than your prior loan.
• There has to be a period of 180 days between the first payment due date on your previous loan to the application date on the new loan.
• Further, 212 days must pass between the due date of the first payment on your prior loan and the due date of your initial payment on your new mortgage.

Native American Direct Loan (NADL)

This home loan for Native Americans is available directly from the VA for those buying, building or improving a home on tribal lands. You have to be a Native American who has met service eligibility requirements or married to one, but one of the big benefits of this in addition to not requiring a down payment in most cases is that the interest rate starts at 2.5%.

Because these loans are directly from the VA, neither Rocket Mortgage nor any other lender offers them.

Requirements

This also has several requirements:

• You must be a qualifying Native American veteran or otherwise eligible service member or their spouse.
• You have to meet VA requirements for credit and debt and show you can make the payment.
• The tribe whose land on which you’re building, purchasing or refinancing must have a memorandum of understanding with the federal government.

Disability Housing Grants For Veterans

The VA offers several grants for disabled veterans who have sustained a service-related injury while on duty. There are four related to housing that we would like to go over.

Specially Adapted Housing (SAH) Grant

The grant provides money to veterans with service-connected disabilities to help them fund home renovations that accommodate their needs.

The VA offers grants of up to $117,014 in the 2024 fiscal year to help purchase or construct an accessible home or retrofit it to be more accessible to your needs. Money from the grant can be used up to six times throughout the life of the veteran, or until you run out of money from the initial grant.

Qualifying Service-Connected Disabilities

To qualify for a grant, you must currently own a home or will own it in the future, and you must have a qualifying service-connected disability, including:

• The loss, or loss of use, of more than one limb
• The loss, or loss of use, of a lower leg, along with the lasting effects of natural disease or injury
• Blindness in both eyes (defined as having 20/200 eyesight or less)
• Certain severe burns
• The loss, or loss of use, of one foot or leg after September 11, 2001, that requires the use of braces, crutches, canes or a wheelchair for independent mobility

Only 120 veterans per fiscal year can qualify for an SAH grant due to the loss of function in a lower extremity after September 11, 2001.

Special Housing Adaptation (SHA) Grant

If SAH grants are for more major modifications and construction on homes, SHA grants are for smaller modifications that still provide a meaningful impact on quality of life. As with an SAH grant, you can use the grant up to six times during your lifetime and the total funding is $23,444 for the 2024 fiscal year.

Qualifying Service-Connected Disabilities

Among the service-connected disabilities that would qualify you for this grant are the following:

• The loss or loss of function of both hands
• Certain severe burns
• Certain respiratory or breathing injuries

Temporary Residence Adaptation Grant (TRA)

The Temporary Residence Adaptation grant allows qualified veterans who are living temporarily in a family member’s home to make changes that accommodate their service-connected disability.

To qualify for a TRA grant, you must first qualify for an SAH or SHA grant. If you qualify for an SAH grant, you can receive up to $47,130 for the 2024 fiscal year. If you qualify for an SHA grant, funding can go up to $8,415. Unlike the other two grants, you have to use this one all in one shot.

Requirements

The main requirements for this grant are that you qualify for the SAH or SHA grants and you’re making an adaptation for a temporary living situation.

Home Improvements/Structural Alterations Grant (HISA)

The HISA grant allows for the addition of medically necessary modifications and structural changes to the homes of veterans or servicemembers. There are two different funding levels that depend on whether the disability has a service connection.

For the purposes of determining whether there’s service connection to the disability, injuries acquired during treatment or vocational rehab by the VA count and it also counts if you are addressing a nonservice-related disability, but also have a service-related disability for which you have a 50% disability rating

Requirements

The funding is $6,800 to address a disability related to service. Otherwise, there’s $2,000 in available funding for nonservice related disabilities. The funds can be spent on the following:

• Entrance or exit from your main home
• Modifications enabling the use of lavatory and sanitary facilities (roll in showers, etc.)
• Modifying for accessibility of kitchen or bathroom sinks and counters
• Improving entrance paths or driveways in the immediate vicinity of the home to get to the home
• Upgrading plumbing or electrical systems to better handle home medical equipment

The following is specifically called out as not covered:

• Paths to outbuildings on the property
• Hot tubs
• Outdoor decks
• New construction

VA Funding Fee Exemption For Disabled Veterans

In lieu of mortgage insurance, the VA funding fee helps fund the VA home loan program, and most borrowers must pay this fee. The amount you pay depends on the size of your down payment and whether it’s your first use or a subsequent use of your VA loan.

If you make a down payment of less than 5%, the fee is either 2.15% of the loan amount for a first-time home buyer or 3.3% if you used your VA loan benefit before.

But there are some funding fee payment exemptions. Borrowers who receive VA disability payments are exempt. If you received retroactive payments from a disability claim that covers the period before your closing date, you can apply for a funding fee refund through your local VA loan center.

The VA also exempts eligible surviving spouses and service members who return to active duty after receiving a Purple Heart from paying the VA funding fee.

State-Specific Veteran Housing Assistance Programs

Beyond what’s been discussed, we want to call out that there are often state-specific veteran housing assistance programs. It’s never a bad idea to search online for veteran resources in your state or from your state or local housing development authority.

Home Assistance For Veterans Experiencing Homelessness 

Many veterans become unhoused due to factors beyond their control. For veterans returning from war, the readjustment to civilian life can be challenging.

According to a 2017 survey from the Department of Veterans Affairs, veterans share many societal problems with the general population that put them at high risk of becoming unhoused, including substance abuse, untreated mental illness and poverty. Post-traumatic stress disorder can also complicate and obstruct a veteran’s transition to civilian life.

There are several avenues of assistance for veterans facing homelessness. If you are unsure where to start, there’s an online chat or you can call (877) 4AID-VET.

HUD-Veterans Affairs Supportive Housing (HUD-VASH)

In partnership with the Department of Housing and Urban Development (HUD), the HUD-Veterans Affairs Supportive Housing Program combines HUD’s Housing Choice Voucher program for rental assistance (more on this program later) with support services for unhoused veterans provided by local VA medical centers, community-based outreach clinics and other VA-designated entities.

The program helps unhoused veterans find housing and provides the medical treatment, case management and other support services they need to help them keep their housing.

HUD-VASH is for veterans most in need of community support, including veterans with severe physical or mental health problems or substance use disorders. Veterans who require the assistance of a service animal may request to keep their assistance animal as a reasonable accommodation.

Supportive Services For Veteran Families (SSVF)

The Supportive Services for Veteran Families program helps very-low-income veterans and their families by identifying new, suitable housing or rapidly rehousing families on the brink of homelessness. The program also offers support services to improve a family's stability, such as health care, daily living support and transportation services.

The idea here is to provide targeted support for the most for those veterans whose risk of becoming unhoused is most acute.

The Bottom Line: Veteran Assisted Housing Comes In Many Forms

The VA provides many housing resources for both eligible service members and our returning veterans, none more front and center than the VA loan. The VA loan is one of the only mortgage options that typically doesn’t require a down payment. The funding fee is also waived for disabled veterans. Moreover, there are grants available if a service-connected disability requires you to have modified housing.

If you find yourself in danger of losing your access to safe and secure housing, please contact (877) 4AID-VET. If you’re looking to buy or refinance a home, you can learn more about VA loans.