VA Home Loans for Disabled Veterans
A VA home loan for a disabled veteran is still a VA home loan. The same Certificate of Eligibility, occupancy rule, and appraisal apply. What can change is the funding fee, how the lender counts income, and whether a separate housing grant can help adapt the house. Exemptions may apply to qualifying recipients of VA disability compensation, veterans who would be entitled to that compensation if they were not receiving retirement or active-duty pay, certain surviving spouses receiving DIC, qualifying pre-discharge ratings, and qualifying active-duty Purple Heart recipients. A service-connected disability by itself does not automatically waive the fee. Confirm status on your Certificate of Eligibility or with your lender.
What changes on a VA loan when you have a service-connected disability?
A VA home loan for a disabled veteran is still a VA home loan. The same Certificate of Eligibility, occupancy rule, and appraisal apply. What can change is the funding fee, how the lender counts income, and whether a separate housing grant can help adapt the house.
Start with the one fact that changes the loan: whether you receive VA disability compensation. That can waive the funding fee and count as income. A rating by itself does not.
| Topic | What is true |
|---|---|
| Funding fee | May be waived if you receive VA disability compensation, or would receive it but for retirement or active-duty pay. The COE is the record. A rating with no compensation does not waive the fee. |
| Down payment | $0 down may be possible with full entitlement and lender approval. Disability status does not add a new down-payment rule, and it does not promise zero down on every file. |
| Monthly mortgage insurance | VA loans do not charge monthly private mortgage insurance, whether or not you have a disability rating. |
| Income | Tax-free disability compensation can count when the award letter and bank deposits match. It does not set your interest rate. |
| Adapted housing | SAH, SHA, and temporary residence grants are separate from the loan. FY 2026 maximums are $126,526, $25,350, and up to $50,961 for a temporary residence when you qualify for SAH. |
| Property tax | Some states reduce property tax for disabled veterans. The rules are local. A VA loan does not create a national property-tax exemption. |
VA funding fee exemption for disabled veterans
Exemptions may apply to qualifying recipients of VA disability compensation, veterans who would be entitled to that compensation if they were not receiving retirement or active-duty pay, certain surviving spouses receiving DIC, qualifying pre-discharge ratings, and qualifying active-duty Purple Heart recipients. A service-connected disability by itself does not automatically waive the fee. Confirm status on your Certificate of Eligibility or with your lender.
There is no 100% rating requirement. A veteran receiving compensation at 10% can qualify. A rating that pays no compensation does not waive the fee by itself. Check the Certificate of Eligibility.
FY 2026 SAH, SHA, and temporary residence grants
Specially Adapted Housing is up to $126,526. Special Home Adaptation is up to $25,350. These are FY 2026 maximums for specific service-connected disabilities. A combined rating percentage is not the qualifying test. An eligible veteran may use an SAH or SHA grant up to six times and does not have to use the full amount in one year.
Specially Adapted Housing (SAH): $126,526
Buy, build, or change a permanent home you own or will own. Qualifying disabilities include loss or loss of use of more than one limb, certain severe burns, qualifying blindness in both eyes, and a few other severe service-connected conditions. One narrow post-9/11 category is limited to 120 veterans per fiscal year.
Special Home Adaptation (SHA): $25,350
Adapt a home you or a family member own or will own, when SAH is not the fit. Typical qualifying conditions include loss or loss of use of both hands, certain severe burns, and certain severe respiratory injuries.
Temporary Residence Adaptation (TRA): Up to $50,961
Adapt a family member’s home while you live there temporarily. The maximum is $50,961 if you qualify for SAH, and $9,100 if you qualify for SHA. A TRA grant can be used once, and it counts as one of the six lifetime grant uses.
A grant and a VA loan can be used on the same home when you qualify for both. VA awards the grant. The loan still requires entitlement, an appraisal, and underwriting.
How to prepare a VA loan file with a service-connected disability
- Read the award, not the rumor. Note whether you receive compensation, the combined rating, and any SMC or unemployability status. A percentage alone does not answer the funding-fee question.
- Pull the Certificate of Eligibility. The COE is where a funding fee exemption shows up for the loan. If it is missing and you believe you qualify, fix that before you lock a quote that includes the fee.
- Ask about a grant only if the disability matches. SAH and SHA require specific service-connected conditions. If the home needs a ramp, a wider door, or a bathroom change, ask VA about the grant before you write an offer that assumes the grant will pay for it.
- Match the income documents. Lenders usually want the VA award or benefit letter and deposits that match it, plus the usual pay stubs, W-2s, or tax returns for other income.
- Get pre-qualified with the real numbers. Use the compensation that is actually on the award, and the fee status that is actually on the COE. Pre-qualification is not a commitment to lend.
VA home loan questions for disabled veterans
Does a VA disability rating waive the VA funding fee?
Exemptions may apply to qualifying recipients of VA disability compensation, veterans who would be entitled to that compensation if they were not receiving retirement or active-duty pay, certain surviving spouses receiving DIC, qualifying pre-discharge ratings, and qualifying active-duty Purple Heart recipients. A service-connected disability by itself does not automatically waive the fee. Confirm status on your Certificate of Eligibility or with your lender.
Do I have to be rated 100% for the funding fee exemption?
No. The funding-fee rule is about receiving VA disability compensation, or being entitled to it but for retirement or active-duty pay. A 10% award that pays compensation can qualify. A rating that pays nothing does not waive the fee by itself. The Certificate of Eligibility is the document to check.
Can a disabled veteran buy with no down payment?
Eligible VA borrowers with full entitlement may be able to buy with no down payment, subject to lender approval, the appraisal, and the property. A disability rating does not create a separate zero-down program, and it does not remove credit, income, or occupancy review.
Does VA disability compensation count as mortgage income?
Lenders can count documented VA disability compensation as income. It is generally tax-free at the federal level. The usual proof is a current VA award or benefit letter plus bank deposits that match. Compensation does not set your interest rate and does not replace the rest of underwriting.
How much is the SAH grant in 2026?
For fiscal year 2026, VA lists the Specially Adapted Housing grant maximum at $126,526. The Special Home Adaptation maximum is $25,350. You can use an SAH or SHA grant up to six times, up to the lifetime maximum, and you do not have to use the full amount in one year. These figures are grant limits, not loan amounts, and most veterans with a rating will not qualify.
What is the difference between SAH and SHA?
SAH is the larger grant, up to $126,526 in FY 2026, for specific severe disabilities such as the loss or loss of use of more than one limb or qualifying blindness. SHA is the smaller grant, up to $25,350, for conditions such as the loss or loss of use of both hands, certain burns, or certain respiratory injuries. VA decides which grant, if either, fits the disability.
Can I use a housing grant and a VA loan on the same house?
Yes, when you qualify for both. The grant helps pay for the adapted housing. The VA loan finances the rest of a purchase or construction that still has to meet entitlement, appraisal, and underwriting rules. The grant is not a down-payment promise, and it is not approved just because a loan is.
What should I bring if I have a service-connected disability?
Bring the Certificate of Eligibility, the VA award or benefit letter, recent bank statements showing the compensation deposit, and the usual income and asset documents for any other pay. If you are asking about SAH or SHA, VA will also need the disability documentation that matches the grant.
Where are the 2026 VA disability pay rates?
The 2026 compensation tables, dependent add-ons, SMC-K, and the projected 2027 COLA are on the VA disability rates page. This loan guide does not repeat the full pay chart.
Why You Can Trust This Guidance
National VA Loans is powered by Stride Bank, N.A.
Stride Bank NMLS #466690
Reviewed by Jeff Newton, Mortgage Loan Manager
National VA Loans is not affiliated with the Department of Veterans Affairs or any government agency.
Last reviewed: October 2026
Helpful Sources and Related Guides
Related VA Home Loans for Disabled Veterans pages
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