Introduction #
The VA Loan Guaranty Service is the organization within the Veterans Benefits Administration (VBA) charged with the responsibility of administering the home loan program. Its Home Loan Program is for veterans and active duty military personnel and certain members of the Reserves and National Guard; and allows various real estate professionals, banks and mortgage companies, to offer VA-guaranteed loans. With VA guaranteeing a portion of the loan, veterans can receive a competitive interest rate without making a down payment if the lender agrees, making it easier to buy a home and allowing the lender to sell more homes. Therefore the program advantages both the veteran and the lender.
The following topics are also addressed below:
- The home adaptation programs which is of value to those who are severely injured due to direct combat and the seriously disabled.
- How the VA can assist you when you are facing foreclosure .
- The VA policy on natural disasters affecting a home or home loan.
- A list of nonprofits that can assist in building and adapting homes.
- A listing of real estate tax exemption programs.
The Master Portal Site
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For the comprehensive, mother site of VA Home Loan Guaranty Service, click here.
The Home Loan Guaranty Program #
With a Purchase Loan (a relatively new VA term), VA can help you purchase a home at a competitive interest rate, and if you have found it difficult to find other financing. For an overview of the program click here.
See also VA’s Cash-Out Refinance Loan, under Avoiding Foreclosure, if you already have mortgage.
Home Adaptation Programs #
To learn about adapting a home for special needs and the grants available, click here to learn about Specially Adapted Housing (SAH) [aka “Homes for Heroes] and Special Housing Adaptations (SHA) grants. There is also a Temporary Residence Adaptation (TRA) grant if you are living temporarily in a family member’s home that needs changes to meet your needs and you otherwise qualify for one for a SAH or SHA grant. Note the SAH grant is not limited to remodeling. But these are not the only home VA adaptation grants available.
Editor's Note: On 19 March 2014 the Department of Veterans Affairs announced that veterans and active-duty military personnel with service-connected Amyotrophic Lateral Sclerosis (ALS), commonly known as Lou Gehrig's disease, are now presumed medically eligible for the VA’s Specially Adapted Housing (SAH) grants.
Not as well known is the Home Improvements and Structural Alterations (HISA) grant. Oddly, it is not mentioned on the web page for SAH and SHA home adaptations above probably because it is funded and administered by another source, the Prosthetics and Sensory Aid Service. Nevertheless, it also has applicability to disabled veterans: under the program, veterans with service-connected disabilities or veterans with non-service-connected disabilities may receive assistance for any home improvement necessary for the continuation of treatment or for disability access to the home and essential lavatory and sanitary facilities. The grant is available for those veterans who have received a medical determination indicating that improvements and structural alterations are necessary or appropriate for the effective and economical treatment of his or her disability.
Examples of projects for which HISA will pay are:
- Allowing entrance or exit from the veteran’s home
- Improving access for use of essential lavatory and sanitary facilities
- Improving access to kitchen and bathroom counters
- Adding handrails
- Lowering electrical outlets and switches
- Improving paths or driveways
- Improving plumbing/electrical work for dialysis patients
Note: A veteran may receive both a HISA grant and either a Special Home Adaptation (SHA) grant or a Specially Adapted Housing (SAH) grant.
See also Cash-Out Refinance Loans, under Avoiding Foreclosure, if the above programs do not apply.
For those who are retired or medically retired from the military, it should be noted that TRICARE does not currently pay for home adaptations. For more information, click here. The TRICARE system somewhat ironically refers you to the VA.
Avoiding Foreclosure #
Since at least 2008, veterans defaulting on their mortgages has been a concern. Unlike several other states, Pennsylvania has no special home loan programs to assist. However, for veterans there possible recourse through a service offered by the Department of Veterans Affairs, the Cleveland Regional Loan Center (Cleveland Regional Office) and perhaps others for those of us who live in the Lehigh Valley.
If you used a VA Home Loan Guaranty, the VA has the legal authority to intervene on the borrower’s behalf: If you expect to fall behind on your payments or are behind, the information below from the Cleveland Office offers options to make your loan current and save your home from foreclosure:
- When your loan goes into default, your servicer/holder is responsible for contacting you, the mortgagor, to determine the reason for the default and attempt to make arrangements to cure the delinquency.
- If the problem can not be resolved by the time you are three payments past due, the servicer/holder is required to notify VA that your loan is in default. After this notice is received, VA will attempt to contact you to discuss your current situation and help you determine the best course of action. It can also help you communicate with your servicer. For detailed information on how to reach one of our Loan Service Representatives, please go to Cleveland Loan Center’s Contacts Page.* You should be prepared to discuss:
– The reason you are, or will soon be, in default
– Your current financial/employment situation
– Whether you or someone else occupies the property
– Whether or not you wish to keep the property
- Most foreclosures result in losses to everyone involved, the veteran, the servicer/holder, and VA. Click here for VA guidance and assistance.Many foreclosures can be avoided, particularly when all parties work together. The following are methods of avoiding foreclosure:
– Pay the Delinquency
– Forbearance and Repayment
– Payment Assistance
– Reamortization
– Private Sale , to include Short Sale
– Deed in Lieu of Foreclosure
– Refunding
If you did not use a VA Home Loan Guaranty, the VA may still help.
- Assistance and a New Recourse: For a veteran or service member who may have obtained a conventional or sub-prime loan, the VA Regional Loan Centers can offer advice and guidance. As above, ours is the Cleveland Regional Loan Center. However, unlike a VA guaranteed home loan, the legal authority to intervene does not exist. Nevertheless, their assistance might help resolve your issues and new options for refinancing to a VA-guaranteed home loan now exist – having from the Veterans Benefits Improvement Act of 2008, a little remarked upon but important act.
- VA Refinancing of a non-VA Guaranteed Home Loan (Cash-Out Refinance Loan): Veterans who wish to refinance their subprime or conventional mortgage may now refinance up to 100% of the value of the property (the previous limit was 90%). Additionally, the Congress raised the maximum loan guaranty for refinancing loans – from $144,000 to $417,000 at least, for high cost counties have even higher maximum loan limits. These limits can be found at http://www.benefits.va.gov/homeloans/. These changes will allow more veterans to refinance through the VA to prevent default or a big payment. This so-called Cash-Out Refinance Loan has other uses for homeowners — taking cash out of their home equity to take care of concerns such as paying off debt, funding school, or making home improvements.
There may be other sources of assistance if the VA cannot help.
- SCRA – for Servicemembers and those recently discharged: Veterans may be able to request relief through the Servicemembers Civil Relief Act (SCRA). The Act was intended to ease the economic and legal burdens on military personnel during their active duty military service. To qualify, the loan must have originated before the current period of active service. SCRA might result in a lower interest rate. It may also prevent foreclosure or eviction up to nine months from discharge. For more information, click here. The site, at the bottom, offers other advice and assistance at the end of the page.
If You Are Facing Homelessness (Being on the Streets): Veterans who feel they may be facing homelessness as a result of losing their home, can call 1-877-424-3838 (4AID VET) or go online to http://www.va.gov/homeless/NationalCallCenter.asp to receive immediate assistance from the National Call Center for Homeless Veterans, a 24/7 hotline. With the new emphasis on preventing family homelessness, this might be a valuable resource to you, in extremis.
Footnotes:
* Or call 1-877-827-3702, the general number to reach the nearest Loan Guaranty Office if not in Pennsylvania or to find out additional information.
For Additional Information:
Natural Disaster Policy #
For the VA policy concerning home loan guaranty when natural disasters occur, click here.
Nonprofit Housing/Homebuilding/Renovation #
Homes for Our Troops is a non-profit, non-partisan, 501 (c)(3) organization founded in 2004. This organization is strongly committed to helping those who have selflessly given to their country and have returned home with serious disabilities and injuries. It assists severely injured Servicemen and Women and their immediate families by raising donations of money, building materials and professional labor and then coordinating the process of building a new home or adapting an existing home for handicapped accessibility. The finished home is then given to the veteran. All is done at no cost to the veteran. Uses VA Specially Adapted Housing Grants (“Homes for Heroes”) to help defray costs.
Homes on the Homefront is a program of Operation Homefront working with various national bank partners. Military and veterans of the 9/11 era can apply for foreclosed houses and condominiums (which have been renovated) made available throughout the country — to include properties within or close to the Lehigh Valley. Selection is made on a case-by-case basis and includes such factors as: financial need, connection to the local community where the home is available, injury status, family size, etc. The applicant cannot presently own a home.
Once selected for a home, the family will reside in the property as a tenant of Operation Homefront for a period between one and two years. During this time, families will be required to pay any actual costs of property taxes, insurance, and homeowner’s association fees. A customized transition plan will be developed in conjunction with each family. Families also will have routine inspections of the home, participate in financial counseling and any other activity required by their assigned client services representative. Families will be required to save enough funds to ensure they can maintain the property long-term. Once the requirements of the transition plan have been fully satisfied and the family is able to maintain and sustain the costs of the home, the property will be deeded to the family.
Click on the link above or contact them at tel: 210-659-7756. Note: Operation Homefront also offers transitional housing.
RenovatingHope is a 501(c)(3) charitable organization headquartered in Pennsylvania whose mission is to provide professional, sustainable, home needs and services in an effort to be a source of renewal and hope to the families of men and women presently serving in the armed forces, as well as to veterans, whose deteriorating residences require repairs and/or upgraded appliances necessary to meet basic human needs, ensuring family safety and adequate comfort. RenovatingHope endeavors to serve those who have been overwhelmed by financial difficulties from which they have demonstrated attempts to recover. It uses a network of certified contractors and vendors to accomplish its mission at no cost to the applicant. Tel: 610-696-0124 [Editor’s Note: There is a question in our minds if this nonprofit is still operating as it no longer has a website.]
Veterans Real Estate Tax Exemptions in PA and NJ #
This section attempts to clarify some of the occasional confusion over real estate tax exemptions for veterans who live in the Lehigh Valley. We have included New Jersey because some of our members live there.
While it is beyond the scope of this section to determine with certainty any local ordinances regarding exemptions exist (none are currently known), the existing laws in both states are discussed.
One should note that real estate tax exemptions for a disabled veteran are federal law is not true. Any real estate tax exemption, waiver or reduction (hereafter, called “exemption”) is the result of a local ordinance or state law.
The statement that the veteran must have a 100% disability rating from the VA is essentially true in practice for these two states, but it is only part of the story. Both states require the rating to be a permanent one and each have constructed their laws in such a way as make a 100% rating only one of the possible conditions – perhaps to protect the individual from potential peculiarities, vagaries and changes in the VA rating system or to better express their intents. Also, both states add additional eligibility requirements beyond having a disability rating.1
New Jersey #
How to Refer to It: Disabled Veterans’ Property Tax Exemption
Citation: NJSA (statute) 54:4-3:30 et. seq. , NJAC (admin code or regulation) 18:28 and Dept of Treasury website page on the subject.
Synopsis (for more details and provisions read the citations):
Property Covered: Applies only to the principal residence and the lot on which that residence is situated. There is no acreage limit.
Residency and Citizenship Requirement: Need not be a U.S. citizen, but must be a legal citizen or resident of the New Jersey.
Character of Discharge: Veterans must be honorably discharged or released under honorable circumstances from active service2, in time of war (see application form or the administrative code for the periods), in any branch of the U.S. Armed Forces (includes Coast Guard).
Income Situation: Not a factor
Disabilities Defined: The VA has certified the veteran has a service-connected disability as follows:
- from paraplegia, sarcoidosis, osteochondritis resulting in permanent loss of the use of both legs, or permanent paralysis of both legs and lower parts of the body, or
- from hemiplegia and has permanent paralysis of one leg and one arm or either side of the body, resulting from injury to the spinal cord, skeletal structure, or brain or from disease of the spinal cord not resulting from any form of syphilis; or
- from total blindness; or
- from amputation of both arms or both legs, or both hands or both feet, or the combination of a hand and a foot; or
- from other service-connected disability rated to be a total or 100% permanent disability, and not so evaluated solely because of hospitalization or surgery and recuperation, sustained through enemy action, or accident, or resulting from disease contracted while in such active service.
- Note: The exemption does not apply to paraplegia or hemiplegia resulting from locomotor ataxia or other forms of syphilis of the central nervous system, or from chronic alcoholism, or to include other forms of disease resulting from the veteran’s own misconduct which may produce signs and symptoms similar to those resulting from paraplegia, osteochondritis, or hemiplegia.
Surviving Spouse Provisions: Upon proper claim being made, entitlement extends to the unmarried, resident, surviving spouses of such entitled, disabled war veterans, regardless of whether or not the spouse had laid claim to the entitlement. Unmarried, resident, surviving spouses of servicepersons who died on wartime active duty have the same entitlement.
Refund for Prior Years: This is up to the municipality. However, if the claim is acknowledged at some point within a tax year, the balance of the year is not taxable and the tax prorated.
Periodic Reviews: However, the assessor may, at any time, request additional information in support of claimant’s continued eligibility for the exemption.
Application Procedure: Contact your municipal assessor.
Application Form(s) (useful for determining documentation and other criteria): Click here.
Pennsylvania #
How to Refer to It: Disabled Veterans’ Real Estate Tax Exemption
Citation: PaCS (statute) 51:89 , PA Code 43:5 and DMVA Webpage
Synopsis:
Property Covered: All real estate taxes levied upon any building, including the land upon which it stands, occupied and owned by that person as a principal dwelling. The administrative code has effectively limited this to five acres if no appeal is made. The law states the need for the exemption from the payment of real estate taxes is determined by State Veterans’ Commission subject restraints by law.
Residency and Citizenship Requirement: Need not be a U.S. citizen, but must be a legal resident of the Pennsylvania.
Character of Discharge: Veterans must be honorably discharged or released under honorable circumstances from the armed forces of the United States for service in any war or armed conflict in which this nation was engaged.
Income Situation: Must prove financial need. A rebuttable presumption of need level for the applicant is established by the State Veterans Commission (a board of veterans and veterans organizations), as further guided by the legislation on how to set increases. What does this mean? The State Veterans Commission will not contest entitlement, assuming the other conditions for eligibility are met, if the applicant’s annual income (not total household income) is $87,212 or less for 2015 and the applicant is asking for no more than 5 acres of land to be included [Editor’s Note: SVC dropped this condition on 5 February 2016] . Above the income or land limit, the game changes as to what family income and assets are included.
Disabilities Defined: As a result of such military service, that person is blind or paraplegic or has sustained the loss of two or more limbs, or has a service-connected disability declared by the VA be a total or 100% permanent disability. The Department of Military and Veterans Affairs has further defined being blind as visual acuity of three-sixtieths or ten two-hundredths, or less normal vision; and paraplegia as the bilateral paralysis of the upper or lower extremities of the body.
Surviving Spouse Provisions: The exemption is extended to the unmarried surviving spouse upon the death of the eligible veteran provided the State Veterans’ Commission determines that such spouse is in need of an exemption. No provision for the spouses of those killed in action exists, as in New Jersey law.
Refund for Prior Years: None
Periodic Reviews: Every five years.
Application Procedure: See your County Director of Veterans Affairs.
Application Form(s) (useful for determining documentation required and other criteria): No official, online forms from the state government are available to review.
- MA-VA 41 (Information Needed by County Tax Assessment Office for Disabled Veterans Property Tax Exemption).
- MA-VA 40, Veteran only; or MA-VA 40ss, Surviving Spouse only, (Application for Determination of Need for Exemption from Certain Real Property Taxes).
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1. When it comes to eligibility, sometimes the statutes are more specific or correct than the administrative codes that regulate their implementation. This is good to know, for where interpretation is involved, it has been known for an administrative code to be in error.
2. The term “active service” means service on active duty or full-time National Guard duty.
Property Tax Relief Programs #
Pennsylvania #
The rebate program benefits eligible Pennsylvanians age 65 and older; widows and widowers age 50 and older; and people with disabilities age 18 and older. The income limit is $35,000 a year for homeowners and $15,000 annually for renters, and half of Social Security income is excluded. Spouses, personal representatives or estates may also file rebate claims on behalf of claimants who lived at least one day in the claim year and meet all other eligibility criteria. For more information and to find where to get assistance, click here.
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Last Updated: 4 September 2022 (TRA update, links updated)
