VA Home Loan Benefits for Disabled Veterans: The Full List

The funding fee exemption

Any veteran receiving VA compensation for a service-connected disability — at any rating, even 10% — is exempt from the VA funding fee. On a $350,000 first-use purchase, that saves $7,525, and on subsequent use it saves $11,550.

Veterans with a pending claim at closing pay the fee and claim a refund if the award is retroactive to before closing. Verify your exemption status on the Certificate of Eligibility before you sign anything.

Adapted housing grants

Veterans with specific severe service-connected disabilities — loss of use of legs, blindness in both eyes, loss of use of an arm at or above the elbow, and certain severe burns — may qualify for the Specially Adapted Housing (SAH) grant, which provides over $100,000 toward building or modifying a home for accessibility.

The Special Home Adaptation (SHA) grant covers smaller modifications for other qualifying disabilities, and the Temporary Residence Adaptation (TRA) grant helps when living in a family member's home. These are grants, not loans — they never have to be repaid.

Using disability income to qualify

VA disability compensation is excellent qualifying income: it is tax-free, stable, and paid for life. Lenders can gross it up — counting it at 115% to 125% of face value because no taxes come out — which increases your qualifying power.

A veteran receiving $3,000 a month in disability compensation may be qualified as if earning $3,450 or more. Combined with no funding fee, disabled veterans often qualify for more home at lower cost than they expect.

State property tax exemptions

Most states offer property tax exemptions for disabled veterans, and many offer full exemptions at 100% permanent and total ratings. Texas, Florida, and several other states waive property taxes entirely for qualifying veterans; others offer partial exemptions scaled to the rating.

These exemptions are administered by states and counties, not the VA, so you must apply locally. The savings can be thousands of dollars a year — check your state's veterans affairs office after closing.

Surviving spouses

Surviving spouses receiving Dependency and Indemnity Compensation are exempt from the funding fee and are eligible for VA loans in their own right. Unremarried surviving spouses of veterans who died in service or from service-connected causes generally qualify.

This is one of the most underused benefits in the entire program. If you are a surviving spouse, request a Certificate of Eligibility — you may have full VA loan access you did not know about.

The bottom line

A disability rating changes the VA loan math in your favor at every step: no funding fee, grossed-up qualifying income, possible grant money for accessibility, and state tax breaks after closing. If you have a rating and have not reviewed these benefits recently, the stack is worth real money.