Many Disabled Veterans are not aware of all the potential benefits they are entitled to. It is my job, as a lender, to properly interview the Veteran to determine what he or she might be eligible for, in addition to the standard VA Home Loan Benefit.
Most Veterans are eligible for the VA Home Loan Program that allows for 100% financing up to loan amounts of $417,000. Higher Jumbo Loan Limits are available with small down payments and all VA loans have no mortgage insurance.
VA Loans require an upfront, financed, Funding Fee of 2.15% on all first-time users of the VA Loan Benefit. The amount is added to the base loan amount of 100% of the purchase price, making the total loan amount 102.15% of the purchase price. Veterans with 10% or more disability rating are eligible for the VA Funding Fee to be waived. On a $200,000 purchase price, this would be a savings to the veteran of $4,300. On subsequent use of the VA Loan Benefit, the funding fee is higher and the savings would increase to over $6,600.
Many Disabled Veterans are NOT aware of the Disabled Veterans Property Tax Exemption that is available to them. A 100% Disabled Veteran in is entitled to a property tax exemption of up to $119,285 if total household income is over $53,566 per year, and up to $178,929 if household income is under $53,566 per year. Using 1.25% of purchase price, on a $200,000 home purchase the normal property taxes would be $2,500 per year. The lower income, 100% disabled Veteran would pay only $263 per year after exemption.
Now we can add a Mortgage Credit Certificate (MCC) for additional savings. With Qualifying Income Limits, Veterans can get a tax credit of 20% of the amount of annual mortgage interest paid. Unlike a TAX DEDUCTION that deducts mortgage interest paid from your taxable income, a TAX CREDIT is taken right off the actual amount of federal tax due. For example, a $200,000 loan amount with an interest rate of 3.75% would provide a first year tax credit of just under $1,500. The Veteran can still write off the remaining 80% of the mortgage interest paid each year as a TAX DEDUCTION.
Other Benefits for Disabled Veterans in California include waiver of DMV registration fees, free license plates and reduced annual fees for fishing and hunting licenses. Spouses, registered domestic partners, children under age of 27 and unmarried surviving spouse of a veteran with service-connected disability or who dies as a result of service related causes may qualify for waiver of mandatory tuition and fees at any State of California Community College, California State University or University of California campus.
Veterans have put everything on the line to protect us, so it’s our responsibility to make sure that we help make them aware of all benefits to which they are entitled. They need to go to the FRONT of the line for short sales and REO’s, not the BACK of the line where they currently are in many areas. While most of us have been safe in our homes, they have been away from their families for extended periods of time, taking care of us. Now it’s time for all of us to “STEP UP” to do whatever we can to help these HERO’S to purchase a home for their families and share the American Dream. It’s the least we can do for them.