On Veterans Day we should all be aware that there are far too many veterans, both older and recent, suffering from a lack of appreciation from the government. Many struggle with getting appropriate healthcare or housing or jobs. But there are some benefits that many vets don’t seem to be aware of. And most revolve around housing.
The veteran’s administration (VA) does not make mortgage loans – but it does guarantee payment to the lender on mortgage loans, up to 100 percent of the appraised value of the home. And there is no additional payment for that mortgage insurance.
In essence, the government is rewarding our vets by helping them to purchase a home with a ZERO down payment, and current interest rates as low as 3.5 percent, fixed for 30 years.
The maximum amount of the loan is $417,000 in most of the country, but limits are higher in Alaska, Guam, Hawaii, and the Virgin Islands. There is even a way to use a VA loan on a mortgage of up to $1 million – but the borrower must make a 25 percent down payment on the amount borrowed above the standard loan limit.
This is not a one-time deal. As long as the loan is repaid, a veteran can get another loan. And the VA program can be used to refinance an existing conventional loan at a lower rate, or to take cash out.
VA loans are available to those who served on active duty 90 days in wartime, or 180 days during a time of peace for older vets, and at least 2 years’ service for those who began their service after September 7, 1980. The vet must have been honorably discharged. Most lenders require the borrower to have a credit score of at least 620, as well as being able to show ongoing income, including spousal, disability, or retirement income.
Of special note is the fact that these VA loans can be used to purchase a two-to-four unit property – as long as the vet occupies one of those units. Given the low rates, it’s entirely possible that the rents from the other units will cover the entire monthly mortgage payment! Property owners who rent, also may get write-offs on their taxes for maintenance and other expenses. Loan limits for a multi-family property are significantly higher, depending on the size of the property.
To qualify for the VA mortgage program, applicants need a Certificate of Eligibility, which you can get at the VA website, www.ebenefits.va.gov or by calling 800-983-0987. Most mortgage lenders will help you through the process, as well. ( In Illinois, my VA expert is Daniel Chookaszian, a mortgage expert, former military chaplain, and a long-time proponent of VA benefits. You can reach him at Perl Mortgage, 312-376-2215.
Property Tax Benefits for Vets
Every state offers some form property tax relief for veterans, or surviving spouses — if they have service-related disabilities. (There are approximately 22.3 million veterans in the United States, and about 3.6 million qualify as having a service related disability.) Each state sets its own level of benefits, and the level of disability required to qualify for them.
For example, Illinois recently increased the benefits to disabled vets by reducing the qualifying percentage of service-related disability from 50 percent to 30 percent. If a vet qualifies, he or she can receive an annual property tax exemption of up to $5,000 on property taxes, on a sliding scale. Those who are deemed to have more than 70 percent disability are completely exempt from paying property taxes on their primary residences. This exemption extends to surviving spouses of disabled vets.
In addition, surviving spouses of veterans who were killed in the line of duty after January 1, 2015, will be completely exempt from paying property taxes on their primary residence. That seems only fair – and a small recompense for their service, and their families’ loss.
To find out the requirements for property tax relief in your state for disabled vets, do a Google search using the words: ‘property tax exemption for disabled veterans in [your state].’
We owe our veterans a huge debt of gratitude for interrupting their lives and putting themselves in danger to protect us on a daily basis. If you know a vet, please share this information so they can at least take advantage of this small show of gratitude available in VA mortgages. They deserve it. And that’s The Savage Truth.
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