Understanding Veterans Benefits in Real Estate: A Guide to Homeownership for Those Who Served

Dear Beloved Veterans,

For veterans, military service comes with many sacrifices, and in return, the U.S. government offers various benefits designed to ease their transition to civilian life. One of the most significant and valuable benefits available to veterans is accessing homeownership assistance through specialized real estate programs, including VA loans and related benefits. In this article, we will explore the various real estate benefits available to veterans, providing insight into how they can help make homeownership more accessible and affordable.

1.?What Is a VA Loan?

A VA loan is a mortgage option provided by the U.S. Department of Veterans Affairs (VA) designed to help veterans, active-duty service members, and certain National Guard and Reserves members buy homes. VA loans offer several advantages over traditional loans, making them a top choice for those who have served or are currently serving in the military.

Key Features of VA Loans:

• No Down Payment: Unlike conventional loans, VA loans typically don’t require a down payment, which can significantly reduce the initial financial burden of purchasing a home.
• Lower Interest Rates: VA loans generally offer lower interest rates compared to conventional loans, making them an affordable option for veterans.
• No Private Mortgage Insurance (PMI): One of the most significant benefits of a VA loan is that it does not require PMI, saving borrowers hundreds of dollars a month.
• Easier Qualification: VA loans are often easier to qualify for, as the credit score requirements are generally lower than those for conventional loans.

2.?Who Is Eligible for VA Loans?

Eligibility for a VA loan is based on various factors, including the length and type of service. To qualify, you must meet at least one of the following criteria:

• Veterans: You must have served on active duty for at least 90 consecutive days during wartime or 181 days during peacetime.
• Active-duty service members: If you still serve in the military, you may qualify after 90 days of active service.
• National Guard and Reserves: Veterans in the National Guard or Reserves may be eligible after six years of service.
• Surviving spouses: The spouse of a service member who has died in the line of duty or as a result of a service-related injury may also qualify for a VA loan.

3.?VA Loan Limits

While there is no specific limit on how much you can borrow with a VA loan, there are limits to how much the VA will guarantee. These limits are determined by the county in which you are buying the home, and they can vary depending on the property's location. For example, homes in high-cost areas may have higher limits than homes in more affordable areas.

However, veterans with full entitlement are not restricted by these limits, meaning they may be able to borrow above the standard limits with no down payment, depending on their creditworthiness and other factors.

4.?Other Veterans Benefits in Real Estate

While VA loans are the most well-known real estate benefit, veterans may also be eligible for various other benefits to assist with homeownership.

Property Tax Exemptions:

Many states offer property tax exemptions or reductions for veterans, particularly those with a service-connected disability. These exemptions can vary by state and locality, so veterans need to check with local government offices to understand what benefits they may be entitled to in their area.

Funding Fee Waivers:

While VA loans usually require a funding fee, veterans with a service-connected disability may be eligible to have this fee waived. The funding fee helps the VA cover the program's cost but can burden some borrowers financially. A waiver ensures that eligible veterans don't need to pay this fee.

Grants for Disabled Veterans:

Veterans with disabilities may also be eligible for specialized grants designed to help them modify their homes to meet their needs. The Specially Adapted Housing (SAH) grant and the Special Housing Adaptation (SHA) grant are available to veterans with certain service-connected disabilities, allowing them to adapt their homes to make them more accessible.

5.?The Home Buying Process for Veterans

While buying a home with a VA loan is similar to purchasing a conventional mortgage, there are some differences. Here’s a step-by-step guide for veterans navigating the process:

1. Pre-Qualify for a VA Loan: Find a lender participating in the VA loan program. Pre-qualifying will give you an idea of your borrowing power and help you better understand what you can afford.
2. Find a Real Estate Agent: It’s crucial to work with a real estate agent experienced in VA loans, as they can help you navigate the specific requirements and paperwork involved.
3. Get a Certificate of Eligibility (COE): Your lender will need to verify your eligibility for the VA loan, and they will typically help you obtain a COE.
4. Make an Offer: Once you’ve found a property, make an offer. With a VA loan, additional considerations may exist, such as requiring the seller to pay certain closing costs.
5. Home Inspection and Appraisal: A VA-approved appraiser must inspect the property to ensure it meets VA standards. The home must also be in good condition to qualify for a VA loan.
6. Close the Deal: After your loan is approved and all the paperwork is in order, you can close on the home and begin your journey as a homeowner.

6.?Other Considerations

Although VA loans offer many advantages, there are some important considerations to keep in mind:

• Property Condition: The home must meet the VA’s Minimum Property Requirements (MPR), which are designed to ensure that the property is safe, sanitary, and structurally sound.
• Funding Fees: While these fees are lower than those for conventional loans, they are still a consideration, especially if you are not eligible for a waiver due to disability.
• Resale Restrictions: In some cases, the seller may need to meet specific requirements, such as paying certain closing costs or ensuring the property is in good condition.

Conclusion

Veterans have earned the right to access a wide range of homeownership benefits, and the VA loan program is one of the most powerful tools available to help them achieve their dreams of owning a home. By understanding the eligibility requirements, the advantages of VA loans, and the various other real estate benefits available to veterans, those who have served can take full advantage of their opportunities. Whether purchasing a first home, refinancing an existing mortgage, or adapting a home for a disability, veterans can access valuable resources that make homeownership more affordable and achievable.

You can feel confident contacting me with questions and assistance.

Tina Lucarelli - Global Real Estate Advisor

Engel & Volkers Westlake Village

DRE 02102354