Army Specialist Dorothy Konkright’s life has changed a lot in the past few years. She and her husband, Army Sgt. Austin Konkright, met Feb. 4, 2019, when she had just returned from a deployment in Afghanistan. Two months later, they were married.
“We instantly clicked,” she says of their connection.
Life didn’t slow down from there. They bought their first home in Colorado six months later, and soon after, their son was born. Then, while caring for their newborn, Dorothy had to have surgery to repair a hip impingement and labral tear she suffered during her deployment.
If that all wasn’t enough, Austin reenlisted in January 2021 and the family packed up their life in Colorado to move to Louisiana, where he’s now stationed.
That’s a lot for a young family to take on, but there was one benefit that helped them along the way: the VA loan program.
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The VA loan program enables veterans, active-duty servicemembers, and some surviving spouses from all branches of the military – whether they have a service-connected disability or not – to purchase homes with 0% down* mortgages if they have full entitlement benefit available.
VA loans also tend to have lower interest rates than other types of mortgages, and there is no annual or monthly mortgage insurance fee (unlike FHA and USDA loans).
Because Dorothy is a veteran and her husband is an active-duty servicemember, both have VA entitlement benefit, so they were able to take out 0% down VA loans on both of their homes.
“We didn’t have to worry about coming up with a down payment,” Dorothy says, and she doesn’t take that for granted. She recounted that a friend is trying to buy a house now with a conventional loan and is struggling to come up with the down payment.
Seeing her friend’s challenge reinforces how powerful the VA loan option has been for her family – and not just because of the zero down option. VA loans have even more value for those with service-connected disabilities.
“One of the best benefits for veterans who suffer from disabilities is that they can get a VA mortgage and the funding fee is waived,” says Jodalee Tevault, a senior mortgage consultant with Fairway Independent Mortgage Corporation in Chandler, Ariz. (Fairway owns Home.com, and the Konkrights purchased their home with a Fairway loan).
As a veteran with a qualifying service-related disability, the VA funding fee was waived for Dorothy. The one-time funding fee is 2.3% for first-time VA homebuyers who put 0% down, and it increases with subsequent use.
But eligible VA borrowers who have qualifying service-related disabilities may be exempt from the funding fee, which can reduce their costs and free up money for other critical expenses.
For a $300,000 home loan, that’s $6,900 in savings.
“VA loans are wonderful and come with even more incentive for veterans with disabilities,” says Joe Pessolano, a branch sales manager with Fairway in Garner, N.C. “If the veteran has a disability rating with the VA, they are exempt from having to pay the VA Funding Fee for their loan. Even though this fee gets financed and the veteran doesn’t have to pay at closing, it does increase the monthly payment and loan amount. Because of this, those with disabilities are at a slight advantage when they use this program.”
In the Konkrights’ case, not having to put money down on their new house meant they had more money available for their big move from Colorado to Louisiana and for getting established in a new place.
“Buying this house, we didn’t have to go so far out of pocket,” Dorothy says.
For some veterans and active-duty servicemembers, the VA loan provides a pathway to homeownership that might otherwise be out of reach. Saving up for a down payment and closing costs on a non-VA loan can be difficult, especially if they live with a service-related disability and have associated medical costs or cannot work full time because of it.
The zero down option enables military homebuyers to not only claim their piece of the American dream, but create stability and community that can anchor them between deployments or after they’ve left the service.
Related reading: ‘This Is My Piece of America.’ What VA Home Loans Mean for Veterans
The VA also has guidelines in place to ensure that VA homebuyers are buying safe, secure properties.
The VA’s minimum property requirements (MPRs) stipulate that a home be in a certain condition before a military homebuyer can purchase it. A VA-approved appraiser must assess the home and note any potential issues in the appraisal report.
Some sellers get spooked by these requirements, thinking they’ll be required to make massive changes before the sale can go through, though that’s not typically the case.
“A lot of people don’t like this aspect of the VA loan, but I like that when the appraiser comes out, they red flag anything that could be a problem for the owners, and the sellers have to fix it,” Dorothy says.
The Konkrights have seen the appraisal process from both sides, as they had to make repairs on their property in Colorado before it was sold. But Dorothy says they were unfazed, especially because they understood the benefit of the VA property requirements.
“We had to get our shutters replaced and a few other things, but it was stuff we knew we should have done anyway,” she says.
The VA appraisal process provided her and Austin “reassurance” that in both cases, the homes they were purchasing were secure and up to standard before they closed. She acknowledges that some people find the requirements frustrating.
Still, she says, “It’s all for good reason in the end. There’s a reason why they do what they do.”
Travis Newberry, a branch manager with Fairway in Roswell, Ga., puts it this way: “The VA doesn’t want them buying a junk house. It’s got to be a good house.”
Another misconception about VA loans is that the borrowers have limited funds or low credit scores, due to the 0% down requirement. But that’s often not the case, either.
“The veterans for the most part are really great borrowers,” Newberry says.
By taking advantage of the no down payment option, they may simply be leaving more liquid cash available for emergencies, moving costs, and other expenses. And, because VA loans are more lenient in many underwriting factors, the buyer may actually have fewer issues getting their loan approved, not more.
Related reading: Should Sellers Accept VA Offers? Yes. Here Are Five Reasons Why.
Veterans who have service-related disabilities may be eligible for additional financial support for from the VA, including:
- Specially Adapted Housing (SAH) grant: Servicemembers who have qualifying disabilities may be eligible for up to $101,754 in 2022 to purchase, build, or modify an existing home that is their primary residence. The VA issues a limited number of SAH grants each year, but you can apply several times if your initial request is not accepted
- Special Home Adaptation (SHA) grant: Servicemembers with certain service-related disabilities may be eligible for up to $20,387 in 2022 to buy, build, or modify a home that they or a relative owns and in which they will live
- Temporary Residence Adaptation (TRA) grant: Servicemembers with qualifying disabilities may be eligible for between $7,318-$40,983 to modify a home they will live in temporarily, such as a relative’s home in which they will live while recovering from a service-related injury
The figures noted above may vary by year. Learn more about these grants through the VA website.
There are also a number of nonprofits that offer home modification and financial assistance to homeowners who have disabilities.
In addition to seeking out financial assistance programs when buying a home, it’s also critical for VA homebuyers to work with lenders that understand and appreciate their circumstances.
Newberry recently helped a veteran who had a disability salvage his home purchase after his original lender told him they couldn’t do the loan at the last minute. The homebuyer had already packed his belongings and moved to the state in which he planned to buy a home, and he was living out of a hotel while waiting to close.
The last minute decline from the first lender left him scrambling, and he worried he wouldn’t have enough money to close due to the hotel expenses.
Newberry was able to do the loan, and both Fairway and the real estate agent waived their fees so the veteran would have enough savings to close – and on time.
“He didn’t need any more time in a hotel,” Newberry says.
Asked why he felt compelled to take on this particular homebuyer’s admittedly challenging situation, Newberry says, “I’m a retired Marine, so we help all veterans. Besides, that’s just the Fairway way.”
Newberry adds that it’s important for VA homebuyers to work with both a lender and real estate agent who can empathize with them, understand their unique needs, and reassure them that “You’re not an island out there by yourself.”
For families like the Konkrights, the VA loan’s 0% down option and funding fee exemption for veterans with disabilities has helped them put down roots.
“The VA loan allowed us to buy our dream home,” Dorothy says. “We’re on a lake, my husband has a shop, and we’re on a dead-end street where everybody knows everybody.”
The best part, she says, is knowing that this is their forever home and where their son will grow up.
“Seeing our son playing in our backyard, we know we’ve made it,” she says. “The VA allowed us to buy a home we know we want to stay in forever.”
In short, she says, “This is the dream.”
Fairway is not affiliated with any government agencies. These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency.
*A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits.