Program Description
This loan program is a small “companion benefit”
to VA’s Specially-Adapted Housing (SAH) Grant program. It’s rarely used, but
it’s available if a an SAH-eligible veteran or service member should need
it.
The goal of the SAH program—as a
whole—is to provide a barrier-free living environment which affords the
veteran or service member a level of independent living he or she might not
otherwise enjoy.
The SAH grant itself
can be used to build a specially-adapted home, buy a home that’s already
adapted, or adapt an existing home; however, it’s currently limited to a
maximum of $50,000. Depending on the scope of the SAH project, veterans or
service members may need supplemental financing to pay for the difference
between the total cost of the house and maximum grant
amount.
This article is ONLY about the
direct loan program available in conjunction with the SAH grant for veterans
or service members who can’t get a VA-backed or conventional loan with a
commercial lender.
Disabled veterans
who receive VA’s specially-adapted housing grant may obtain either a
standard VA-guaranteed or conventional loan from a commercial lender. If you
were a grant recipient and you had difficulty getting a commercial VA-backed
or conventional loan, VA might be able to provide a direct
loan.
The maximum loan is $33,000. It’s
possible that, if you need to use a VA or conventional loan, you can get
supplemental financing from a commercial lender.
General Program Requirements
NOTE: This loan program is a companion benefit
to VA’s Specially Adapted Housing (SAH) grant. It’s rarely used because a
standard VA-guaranteed or conventional loan is ordinarily the best choice.
This article discusses only the direct
loan program available in conjunction with the SAH grant. We’ll be adding an
article on the Specially Adapted Housing grant program itself in the near
future.
In order to qualify for this
loan, you must have been determined eligible for VA’s SAH grant first. (This
grant is available for veterans and service members who are so seriously
disabled from service-related disabilities that they have significant
mobility problems.)
You must also
- Qualify for the regular VA Loan Guaranty
program. (If you qualify for the SAH grant, you probably do qualify for the
Loan Guaranty program.)
- Have good credit
and enough income to support the entire house
payment.
Finally, you must have enough
Loan Guaranty “entitlement” * to cover the loan.
*Entitlement—What is it? If you’re eligible for the Loan
Guaranty program, then you are entitled to a certain amount of financial
backing (or "guaranty") for a home loan. You might think of it like this: We
set this money aside for you for the time when you’ll use our guaranty.
We call this money your "entitlement."
It’s the money we will use as security for the lender.
Loan Terms
The direct loan is not a better deal than an ordinary mortgage;
it’s just a fall-back option if you can’t get a commercial loan. You still
have to qualify in terms of credit and income.
The maximum loan is $33,000. The interest rate will be
based on current market rates. Maximum length of the loan is 360 months.
Like most mortgages, payments are made monthly.
Application Process
For more information, see the Program Contact Information below.
Program Contact Information
For more information, please
visit:
http://www.homeloans.va.gov/sah.htm
Managing Agency
Veterans Benefits Administration (VBA)
http://www.vba.va.gov
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