What a Disabled Service Member Should Know Before Buying a Home in Hawaii
You served our country and put your life on the line…now the government wants to give back and help you realize the American dream of homeownership. But do you know all the benefits you could receive as a homeowner?
Know What Benefits are Available to You
1. One of the biggest benefits for disabled veterans when purchasing a home with a VA Loan is that their loan’s funding fee is waived. This is typically a savings of 2.15% of the purchase price for a $0 down payment loan for first-time VA Loan users. For second-time military disabled buyers, it would mean a waiver of typically 3.3% for the funding fee. If you are at least 10% disabled or are receiving disability payments, you are likely to qualify.
What if your disability status is pending and you are already in the process of buying a home? You could have your funding fee refunded if you apply with the VA office during escrow.
2. Once you find the home that you want to purchase, there’s something called VA unallowables or non-allowables that you will hear about from your lender. These fees are part of the usual buyer closing costs, but Uncle Sam does not want you to pay for certain costs such as: loan underwriting, escrow fees, certain attorney fees, document prep fees, or a termite inspection report (normally a seller cost, but in competitive situations some buyers are willing to pay for that).
The seller can pay these fees, which could add up to a couple thousand dollars, but keep in mind that it may put you at a disadvantage in a multiple offer situation. Better yet, some VA lending specialists will cover your unallowables as a benefit to working with them, so why not ask?
3. Additionally, when buying your home (and also selling), make sure your agent asks the escrow company to provide you a military discount. Almost all escrow companies will offer the benefit, which could be 25% off of the title fees.
4. Along with savings during your purchase, qualified disabled veteran homeowners can significantly lower their property taxes. The Disabled Veterans Property Tax Exemption reduces property taxes for qualifying vets. For the state of Hawaii, if you are 100% service disabled, your property taxes could go down to only $300/year! It is different for each state, so consult your local tax office or VA office for requirements and specific information.
5. Furthermore, once you buy your home, some disabled veterans may be eligible for one or more VA grants: Specially Adapted Housing Grant (SAH), Special Housing Adaptation Grant (SHA), or the Home Improvement and Structural Alteration Grant (HISA).
- The SAH is intended to help fund the modifications in a home to remove the barriers to an independent lifestyle. This grant for up to $70,465 in 2015 would help pay to construct or modify your existing home to make it more accessible in relation to the disability, such as building of wheelchair ramps, widening of the doorways, or bathroom modifications.
- The SHA grant is similarly intended to help pay for the modifications to an existing home to make it mobility safe. The current maximum is $14,093. See what types of service-related disabilities would qualify.
- The HISA can also assist when it is medically determined that home modifications will aid in the continuation of treatment of the disability.
While many disabled veterans would be eligible for these grants if needed, you should inquire about the specific eligibility requirements by contacting the Department of Veterans Affairs.