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    The VA loan allows for 100% financing for eligible borrowers. Active duty service members, veterans, and surviving spouses can apply for a VA loan with zero percent down.

    Of course, there are additional fees involved with home loans, such as closing costs. But, there are several benefits for disabled veterans that make the VA loan even more appealing.

    Keep reading to learn about the 100 percent disabled veteran home loan and the benefits you can expect.

    KEY TAKEAWAYS

    • VA loans allow all eligible borrowers to receive benefits like low interest rates, more flexible lending criteria, and no down payment requirement. 
    • Veterans with disabilities may qualify for additional VA loan benefits, which include the funding fee exemption and housing grants. 
    • The VA loans available for veterans with disabilities include purchase loans, cash-out refinance, and streamline refinance.

    Benefits Available to Disabled Veterans

    Home loans for disabled veterans allow eligible borrowers to get 100% financing on home purchases, meaning no down payment is necessary. Plus, with added benefits like exemptions from some closing costs and housing grants, you can save even more. In addition, you can use your disability benefits as income to qualify for the loan. A few of the top disabled veteran home loan benefits include the following:

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    VA loans

    VA loans are available for all eligible service members and veterans. All VA loans are technically 100 percent disabled veteran home loans because you can finance the entire value of the home with zero down payment or mortgage insurance requirements.

    In addition to the no down payment or mortgage insurance requirements, other key VA loan benefits help reduce your costs and provide flexibility. Further advantages include:

    • Competitive interest rates: Keep your monthly payments low and save money over the life of the loan.
    • No prepayment penalties: Pay off your loan early without facing extra fees, giving you flexibility to reduce debt faster.
    • No limit on entitlement usage: You can use your VA loan benefits multiple times as long as you have remaining entitlement, making it easy to cash in on the benefits you’ve earned time and time again.

    Because VA loans are guaranteed by the US Department of Veterans Affairs (VA), lenders can offer lower interest rates since there’s less risk. However, how much you qualify to borrow before having to make a down payment depends on your entitlement. You won’t need to make a down payment if you have your full entitlement. If you have partial entitlement, on the other hand, you will be subject to local VA loan limits and may have to make a down payment to cover the difference between the loan limit and the cost of the house.

    VA funding fee exemption

    While all eligible VA loan borrowers can take advantage of the VA loan zero down payment requirement and competitive interest rates, the 100 percent disabled veteran home loan allows disabled borrowers to avoid the VA funding fee and potentially save thousands of dollars on their loan.

    The VA funding fee is a one-time payment borrowers must make to fund the VA loan program, lowering the cost of these types of loans for taxpayers since this program doesn’t require down payments or mortgage insurance. Below is some more information about the VA funding fee:

    • For those using a VA loan for the first time and putting less than 5% down, the VA funding fee is 2.15% of the loan amount and is due at closing. However, every subsequent VA loan after your first comes with a 3.3% VA funding fee.
    • Borrowers can reduce their funding fees by making larger down payments. If you put down more than 5%, your VA funding fee is reduced to 1.5%. If you put down more than 10%, the VA funding fee is reduced even further to 1.25%.
    • Borrowers receiving VA compensation for a service-connected disability or those eligible to receive compensation for a disability aren’t required to pay the VA funding fee.
    • You may be eligible to receive a refund if you paid a VA funding fee and later were given VA compensation for a service-related disability.

    The funding fee exemption can help save disabled veterans thousands of dollars in closing costs. For instance, if your home loan is $300,000 and this is your first time using your VA loan, the funding fee would be $6,450. So, if you have an exemption in this case, you would be saving over six thousand dollars when purchasing a home with a VA loan.

    If you’re unsure whether you’re eligible for the exemption, we recommend contacting the VA or letting us know, and we’ll work with the VA directly to ensure you get all the benefits the VA loan program has to offer.

    Disabled veteran housing grants

    The VA offers housing grants for members with service-connected disabilities to help them buy or improve a home, which may include installing ramps or widening doorways. Here are the main grants available:

    • Specially Adapted Housing (SAH) GrantThis grant allows eligible borrowers to buy, build, or change their homes to meet their needs. However, you can only use this grant if you own the home and have a qualifying disability. The SAH grant offers up to $117,014 for 2024.
    • Special Home Adaptation (SHA) GrantThis grant allows you to buy, build, or change a primary residence as long as you plan to live in it for a long time. To qualify, borrowers or a family member must own the home, and the borrower must have a service-connected disability. The SHA grant offers a maximum of $23,444 for 2024.

    You can use either grant up to six times throughout your lifetime, which allows you to take advantage of these benefits every time you purchase a new home with a VA loan. And depending on the changes required to your home, you can use only as much of the grant as you need. If you don’t use the full amount, you can use more later.

    You can apply for a disability housing grant to reduce the cost of your loan and changes to your home by logging into the eBenefits platform.

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    VA Loans for Disabled Veterans

    VA loans are available to all eligible veterans, active service members, and surviving spouses. Therefore, there technically isn’t a 100 percent disabled veteran home loan because all VA loans offer 100 percent financing if you have your full entitlement.

    A bearded military veteran in a wheelchair sits at a desk with an open laptop while talking on his cell phone.

    However, if you have a service-connected disability, you may also be eligible for grants, and a funding fee exemption, which can help you save even more on your VA loan, and these benefits are available whether you’re buying a home or refinancing.

    Depending on your needs, there are three VA home loans for veterans on disability:

    VA purchase loan

    The purchase loan is used to purchase a home with zero percent down and low VA loan rates. This standard VA mortgage allows you to purchase a primary residence with better terms and rates than many other loan types. These loans also have more flexible lending criteria, and if you’re disabled, you can use your disability income to qualify.

    It’s important to note that if this is not your first time using your VA loan and you only have partial entitlement, you may be required to make a down payment based on your remaining entitlement amount. You can also restore your entitlement to once again take advantage of a zero down mortgage.

    With a VA purchase loan, you can choose between a fixed- or adjustable-rate mortgage (ARM), depending on your preferences.

    VA streamline refinance

    The VA streamline refinance loan allows you to change your interest rate and terms to potentially reduce your monthly payments on your existing home loan. When you replace your existing mortgage with a new one, you can also switch from an adjustable-rate to a fixed-rate mortgage if you’re seeking out more stability in your monthly mortgage payments.

    With these types of VA loans, you don’t have to order another appraisal or provide additional documentation. Instead, your lender will use the information they already have on file to determine your eligibility. However, if something has changed in your life, such as your job, you may need to provide additional information to prove your ability to repay the loan.

    VA cash-out refinance

    The VA cash-out refinances allow you to access your home’s equity by replacing your original mortgage loan with a larger one. This means that you can use the new loan to pay off your remaining original mortgage balance and pocket the difference. With these loans, your original mortgage loan doesn’t have to be a VA loan to qualify.

    Can I Get a VA Loan With Bad Credit?

    There are plenty of home loans for disabled veterans with bad credit. The VA doesn’t set a minimum credit score to qualify for this loan, but lenders do. However, most lenders are flexible, allowing for low credit scores. For instance, Griffin Funding typically requires a credit score of 580 but can accept scores as low as 500 in certain cases.

    Ultimately, it may come down to your income and down payment. If, for some reason, you have a low credit score, you may be able to make a larger down payment to compensate, which reduces your loan amount and makes you a less risky borrower.

    Griffin Funding works one-on-one with all of our VA loan borrowers to help them obtain the financing to purchase a home. We believe applying for a VA loan shouldn’t be complicated or stressful. Our team walks you through the process and provides all the information you need to determine whether now is the right time to take out a VA loan.

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    Get a Disabled Veteran Home Loan Through a Trusted Lender

    A 100 percent disabled veteran home loan allows you to purchase your home with no down payment and fewer VA loan closing costs, saving you money in the process. But unfortunately, not all VA lenders are created equal.

    If you’re a disabled veteran, you need a mortgage lender that understands your benefits. Contact Griffin Funding today. We’re a premier VA loan lender that knows the ins and outs of the VA loan program and what benefits you may be eligible for based on your unique situation.

    Want to further explore whether a VA loan is right for you? Check out our free VA loan calculator or download the Griffin Gold app to manage your finances and compare your mortgage options.

     

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    Frequently Asked Questions

    Can I take out a loan against my VA disability?

    No, you can’t directly take out a loan against your VA disability payments. However, your VA disability benefits can make it easier to qualify for a home loan. Lenders look at your overall financial picture, and your VA disability benefits count as income that supports your application. Plus, with VA loans, you can benefit from favorable terms like zero down payment and lower interest rates.

    How do I choose a VA mortgage lender?

    As you choose a VA mortgage lender, focus on finding one that understands the unique needs of veterans. Look for lenders with experience in VA loans and check their rates, fees, and customer reviews to ensure a good fit. Some lenders are more flexible with credit scores, which can be especially helpful if you’re searching for home loans for disabled veterans with bad credit. Make sure the lender is easy to communicate with and willing to guide you through the process, so you feel confident at every step.

    How can I get the best rate on a disabled veteran home loan?

    To get the best rate on a VA home loan for disabled veterans, consider these steps:

    • Optimize your credit score: Start by improving your credit score, as this can lead to lower rates. Ensure that you are making timely payments and paying down any debts. 
    • Make a down payment: Saving for a larger down payment can help you get a better rate, as it reduces risk for lenders. 
    • Opt for a shorter loan term: Consider choosing a shorter loan term, which often comes with lower interest rates. Keep in mind, though, that your monthly mortgage payment will be higher if your loan term is shorter. 
    • Compare lenders: Shop around and compare offers from different lenders to find the most competitive rate.
    Bill Lyons

    Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.