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  • John Proctor

What You Should Know About Veterans Housing Assistance

GLEN ALLEN, Virginia - First of all, do you ever wonder why there are homeless Veterans despite them being the unsung heroes of our country?

As to what I’ve read in the web, when they do return to civilian life, they are usually with no employment, limited job skills, and a loss of family and identity, which all eventually boils down to homelessness as the skills obtained in the military aren’t transferrable to the civilian workforce.

Meanwhile, as discussed in the previous article, among the leading causes of homelessness are post-traumatic stress disorder (PTSD) and substance abuse, in which the aforementioned are exacerbated when there is a lack of family and social support networks.

These challenges, along with feelings of isolation, loneliness, and financial anxiety, frequently result in severe depression, drug and alcohol addiction, post-traumatic stress disorder, and a variety of other "invisible" illnesses.

In the end, the Veteran becomes homeless due to a lack of employment, income, and family support, as well as a lack of understanding of how to put all the parts together.

Now why did I expound on such you ask?

That’d be mainly because of our main topic for today which are housing assistance for Veterans!

Hence, we will be mainly focusing on the programs offered to Veterans as stated.

One of the organizations focused on such programs are the VA wherein its housing assistance can help Veterans, service members, and their surviving spouses to buy a home or refinance a loan.

They also even provide perks and services to be of aid in building, improving, or maintaining your present residence.

The following are being offered and will be tackled one by one right after:

  1. VA home loan benefits

  2. Veterans housing assistance grants

  3. Disability compensation (pay)

  4. Pension benefits

  5. Veteran Readiness and Employment (VR&E)

  6. Life insurance

VA home loan benefits

This is said to enable Veterans, military members, and their survivors in using VA direct and VA-backed Veterans home loans to buy, construct, improve, or refinance a house.

While there’s a need to meet the credit and income requirements for the loan, a Veterans home loan come with better conditions than that of a regular loan.

One good example of the said condition would be that nearly 90% of VA-backed loans, for example, do not need a down payment.

So what are the loan types included? Let’s take a look at the list from

  1. VA direct home loan work. Through this, the VA act as your mortgage lender, basically having them manage your loan for you ‘directly’ after applying. It had been stated that the Native American Direct Loan (NADL) program frequently provides better terms than a private lender's house loan

  2. VA-backed home loan work. Meanwhile, what happens in this type would be that the VA serves as a guarantor for a part of the loan you acquire from a private lender, wherein the guaranty permits the lender to recoup part or all of their losses if your VA-backed home loan falls into foreclosure. It is in this type that approximately 90% of all VA-backed house loans are taken out with no money down. As for how this works, lenders adhere to the VA’s criteria when making VA-backed home loans in which it is possible for them to impose additional requirements before granting you a loan. Some of the requirements included may be obtaining a sufficient credit score or obtaining updated house appraisal, an expert’s estimate of your property’s value to be exact.

  3. VA-backed Purchase loan. While you may need to pay the VA funding fee for the loan, the said fee is a one-time charge only and aids in reducing the cost of the loan for U.S. taxpayers. Meanwhile, in addition to the closing expenses, your lender will charge interest on the loan. The following can be done when this type of loan is availed: No down payment, Better terms and interest rates, The ability to borrow up to the Fannie Mae/Freddie Mac conforming loan limit, No need for private mortgage insurance (PMI) or mortgage insurance premiums (MIP), Fewer closing costs, and no penalty fee if the loan is paid off early.

  4. Native American Direct Loan (NADL) program. This can be availed if one is a Veteran who is Native American ‘or’ if the Veteran’s spouse is as such. This program may then be able to assist you in obtaining a loan to purchase, construct, or repair a house on federal trust land. The loan can even be used to refinance an existing NADL and lower your monthly payment. Just like the purchase loan, a one-time fee may be needed to be paid for the sake of lowering the loan’s cost and the benefits to be gained from this loan is quite similar as well: No down payment, No need for private mortgage insurance (PMI), Limited closing costs, A low-interest, 30-year fixed mortgage. A reusable benefit because you can get more than one NADL, and the ability to borrow up to the Fannie Mae/Freddie Mac conforming loan limit.

  5. Interest Rate Reduction Refinance Loan (IRRRL). This is the loan that’s quite suitable for those who want to reduce their monthly mortgage payments on their existing VA-backed home loan as refinancing allows you to replace your existing loan with a new one with different conditions, hence the terms can be better. Now rather than applying blindly though, it was said that it is better to first asses if refinancing is worth it by dividing one’s closing fees by the amount you estimate to save each month by refinancing to get a clearer idea of what you’re getting into rather than simply listening to your lender’s advice regarding the transaction’s costs and advantages.

  6. Cash-out refinance loan. Meanwhile, here is the loan that may be suitable for those who want to take their cash out of their home equity or refinance a non-VA loan into a VA-backed loan as a cash-out refinancing loan sponsored by the VA allows you to replace your existing loan with a new one with alternative conditions.

This loan may be able to help one pay off debt, school, home improvements, or other needs through the cash taken out of the home equity, however, just like the previous loan, it is better to know what you’re getting into, hence, make sure to understand how your new loan amount relates to the value of your home.

After having covered the different types of loan programs offered, let’s head onto the eligibility requirements for them, wherein we will be focusing on the Certificate of Eligibility (COE) as it will be the one that can show your lender that you qualify based on your service history and duty status.

To start off, you can get yourself a COE if you didn’t receive a dishonorable discharge and you meet the minimum active-duty service requirement based on when you served.

One way to apply for the certificate would be online through this link, while other methods consist of through the VA’s Web LGY system, where you should ask your lender about that option, and by mail, where one has to fill out a Request for a Certificate of Eligibility (VA Form 26-1880) and mail it to the address listed on the form.

If you as if there are other situation where one can get a COE at, it had been stated that at least one of the requirements listed below must be true. You:

  • Are a U.S. citizen who served in the Armed Forces of a government allied with the United States in World War II, or

  • Served as a member in certain organizations, like a:

  • Public Health Service officer

  • Cadet at the United States Military, Air Force, or Coast Guard Academy

  • Midshipman at the United States Naval Academy

  • Officer of the National Oceanic & Atmospheric Administration

  • Merchant seaman during World War II

Meanwhile, in terms of usage, one can use a COE used before as long as one of the said requirements are true:

  • You’ve sold the home you bought with the prior loan and have paid that loan in full, or

  • A qualified Veteran-transferee agrees to assume your loan and substitute their entitlement for the same amount of entitlement you used originally, or

  • You’ve repaid your prior loan in full, but haven’t sold the home you bought with that loan (you can only do this one time)

Now that you’ve been equipped with more knowledge regarding housing assistance for Veterans, don’t hesitate to reach out to organizations offering such programs, especially the U.S. Department of Veterans Affairs that offer all that was mentioned, whether it is to be of aid to someone or to be of aid to oneself!

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