There are many state-run programs unrelated to the VA offered to qualifying veterans. The Department of Veterans Affairs offers the VA Home Loan program, designed to help eligible veterans and certain qualified surviving spouses of veterans to buy affordable homes. But the VA home loan benefit isn’t the only home buying program designed to help veterans.

The rules for these programs vary by state and depending on location there may be income limits, caps on sale prices, and some may be specifically need-based.

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You can find state-based veteran housing benefits in states including, but not limited to:

• Alaska
  • State Veterans Interest Rate Preference: Qualified veterans receive a 1% interest rate reduction on the first $50,000 of the loan amount to purchase an owner-occupied, single-family residence or, with certain restrictions, a duplex, triplex or fourplex.. Veterans must meet “State Vet” income limits.
• California
  • CalVet Program: Qualifying veterans receive below market interest rates with low or no down payment requirements.
• Colorado
  • CHFA Firststep & Firststep Plus: Qualified veterans receive offers affordable interest rates, a 30-year term and even an optional CHFA Second Mortgage Loan to use for down payment and closing cost assistance.
• Connecticut
  • The Military Mortgage Option: There is an additional 0.125% off already below-market interest rates for veterans or Military Service members loans. This program is open to unmarried, surviving spouses or civil union partners of a veteran who died as a result of Military Service or service-connected disabilities.
• Delaware
  • First-Time Home Buyer Tax Credit: Qualified veterans can participate in this program even if they’re not buying their first home. The program entitles first-time buyers who purchase a home in Delaware as their primary residence to take a federal income tax credit up to $2,000 each.
• Florida
  • Salute Our Soldiers Military Loan Program/Mortgage Credit Certificate (MCC) Program: Veterans and active duty military personnel throughout the state can receive a below market rate 30-year fixed rate first mortgage loan and up to $10,000 in down payment assistance and closing cost assistance.
• Georgia
  • Georgia Dream Loan: Active-duty service members, first responders and some other groups can get up to $7,500 in down-payment assistance in the form of a zero-interest loan.
• Illinois
  • @HomeIllinois: $5,000 in down payment and closing cost assistance, federal income tax reductions, and lender-paid mortgage insurance for Illinois Veterans and military families. Available to first-time buyers, repeat buyers and homeowners looking to refinance statewide.
  • 1stHomeIllinois: $7,500 in down payment and closing cost assistance and a 30-year, fixed-rate mortgage with a competitive interest rate. Available to first-time homebuyers and all Veterans in 10 select counties.
• Indiana
  • Honor Our Vets Program: Active duty, veterans and retired military personnel who are moving to Indiana can get up to $5,000 to help with a down payment, closing costs or relocation expenses. Participants must qualify for a VA-backed loan and work for an employer enrolled in the program.
• Iowa
  • Military Homeownership Assistance Program: The program provides a $5,000 grant to service members and veterans for down payments and closing costs on qualifying homes. The funds may be used in conjunction with the FirstHome and Homes for Iowans programs.
• Louisiana
  • Market Rate GNMA Program: This program offers qualified veterans 30-year, fixed-rate FHA, VA or USDA Rural Development mortgages at favorable interest rates.
• Maine
  • SaluteME/SaluteME Home Again Programs: MaineHousing offers qualified active duty, veterans, and retired military personnel a 0.25% discount on our already low first home loan 30-year fixed interest rate.
• Maryland
  • T​he Veterans and Military Family Mortgage Program (Maryland Homefront): Provides military veterans and active duty military with a special interest rate discount of 0.25% for a 30-year and a fixed rate mortgage.
• Massachusetts
  • Home for the Brave Program: eMassHousing offers affordable, no-down payment mortgage financing for veterans of the U.S. Armed Services.
• Mississippi
  • Veterans’ Home Purchase Board: Mississippi residents who are veterans, current active-duty military personnel, or current members of the Mississippi National Guard or Reserves with over six years of service, offers an advantageous interest rate for the purchase of an existing home or a home recently constructed.
• Missouri
  • First Place Loan Program: Veterans can take part in the  program even if they’ve already owned a home. The program offers affordable interest rates as well as cash assistance for a down payment and closing costs.
• Nebraska
  • Military Home Program: For buyers who are actively employed by any branch of the service or for qualified veterans who have been discharged from the service under conditions other than dishonorable. The program offers 30-year fixed rate loans and there are no pre-payment penalties.
• Nevada
  • Home is Possible for Heroes Program (HIP-H): This hero-worthy program gives veterans and military personnel below-market fixed interest rate 30-year loan, reduces monthly mortgage payment and there is no first-time homebuyer requirement.
• New York
  • Home for Veterans Program: Active service members, veterans, and their spouses or co-borrowers can qualify for interest rates .375% lower than standard SONYMA interest rates for loans with down payment assistance. Down Payment Assistance Loans are available with this program for up to $3,000 or 3% of the purchase price (not to exceed $15,000), whichever is higher. Minimum borrower cash contribution is only 1%; the remaining 2% can come from a gift or other acceptable source.
• Ohio
  • Ohio Heroes Program: Veterans, active duty military members or members of reserve components (including surviving spouses) can qualify for a discounted mortgage interest rate.
• Oregon
  • ODVA Home Loan Program/ORVET Home Loan: ODVA is a lender and servicer of home loans exclusively for veterans in Oregon and provides reduced interest rates. The Oregon Veteran Home Loan is a separate and distinct loan product from the federal VA Home Loan Guarantee benefit.
• Pennsylvania
  • The Keystone Government Home Loan Program (K-Gov): The Pennsylvania Housing Finance Agency (PHFA or the Agency) offers qualifying veterans home purchase loans with competitive interest rates and lower fees.
  • HFA Preferred™(Lo MI): Borrowers who qualify for the HFA Preferred (Lo MI) loan program are offered relief from mortgage insurance–that expense is paid for under HFA Preferred by “one of several private mortgage insurance companies” when the borrower makes a down payment of less than 20 percent.
  • Keystone Home Loan: This home loan program is offered to those who are not first-time home buyers but who plan to purchase property in a targeted county or target area.
  • Keystone Advantage Assistance Loan Program: This loan program is basically a second mortgage for the purpose of helping out with closing costs and down payment expenses.
• Tennessee
  • The Great Choice Plus Program: Approved military and veteran homebuyers offers a fixed rate, 30-year mortgage option and allows individuals to borrow up to 96.5 percent of the purchase price.
• Texas
  • TexVet Programs
    • Land Loans: Texas veterans and military members can borrow money to purchase land at favorable interest rates and terms while only requiring a minimum 5% down payment.
    • Home Loans: Eligible Texas veterans and military members have an opportunity to purchase a home with an unbeatable, low-interest loan with little or no money down.
    • Home Improvement Loans: Veterans or military member can receive help pay to improve a home through the Texas Veterans Home Improvement Program (VHIP).
  • Alternatives to TexVet
    • • Texas Department of Housing and Community Affairs (TDHC) My First Texas Home Loan
      • TDHC My Choice Texas Home loan
      • Texas State Affordable Housing Corporation (TSAHC) Homes for Texas Heroes Home Loan Program
      • TSAHC Sweet Texas Home Loan
• Utah
  • Veteran First Time Homebuyer Grant Program: Recently separated veterans (last 5 years) or a currently serving member of the military living in Utah gifts $2,500 who purchase their first home in Utah.
• Washington
  • Veterans Downpayment Assistance Loan Program: A second mortgage loan program with a 3.00% interest rate and payments deferred for up to 30 years for Washington State veterans who have served our country. Veterans can combine with the Home Advantage or House Key first mortgage loan program.
• Wisconsin
  • Veterans Affordable Loan Opportunity Rate Program (VALOR): The VALOR program is a reduced home loan interest rate program for veterans.

What You Need To Know About State-Run Veteran Friendly Home Loan Programs

Not all state-run home loan or home loan assistance programs for veterans are alike. Requirements, income limits (where applicable), and first-time homebuyer status rules will vary from state to state.

Some programs may not be need-based, while others are. Some veteran-friendly home loan programs have specific property types and loan term rules, and others may not be strictly limited to veterans or active duty military members.

The information listed on some military-oriented websites and blogs can get outdated quickly. You will likely find dead links to programs written up on certain blogs which may lead one to believe the programs themselves are no longer running.

This is often not the case. If you find dead links to veteran-friendly home loan programs on a state government website, try searching the site itself (or use Google) for the name of the home loan program you need; chances are the program may have been relocated on the official site to a new URL or web address.

But in some cases, redirected URLs or bad links may actually be an indication that the program has been closed or modified.

For example, if you search the web for the Massachusetts-based Home for the Brave Home Loan Program (which offers reduced mortgage loan interest rates for qualifying military members and certain surviving spouses), you may find an outdated link that redirects to the more generic Veterans’ Services page. Searching for the program reveals other links that are also (at the time of this writing) no longer active.

So while it can pay to do some extra searching for a program near you, sometimes the research hits a dead end due to a program that was terminated without much press or public notice.

No Two State-Run Veteran Friendly Home Loan Programs Are Exactly Alike

Terms and conditions for veteran home loan programs will vary by state. In some cases there may be need-based programs that require the applicant to meet an income limit. In other need-based programs the applicant may be required to be homeless or be in danger of becoming homeless in order to qualify.

But not all programs are designed with homelessness or low-income needs in mind.

Some, like the Maryland Homefront program, simply offer special interest rate discounts and fixed rate mortgages for qualified veterans and/or family members. The Homefront program also provides funds for down payments and closing costs for new purchase loans.

In some cases, including the Homefront program, attending a home buyer’s orientation or home buyer counseling class is required as a condition of participating in the program.

Some Programs Offer Specific Kinds Of Assistance For Military Members And Families

Some veteran-friendly state programs provide a specific kind of help, such as down payment assistance. Programs of this nature have been offered in Illinois such as @HomeIllinois, which has provided $5,000 per loan for down payments, closing costs, and other assistance. This assistance was offered to Illinois Veterans and military families but has also been provided to first-time buyers, repeat buyers, and those looking to refinance.

Some Programs Offer Not Assistance, But Rather The Home Loan Itself

A smaller number of states offer veterans a home loan (with vet-friendly perks or incentives) instead of simply offering to help pay for loan-based expenses.

The State of Oregon has one such program described on the official site as “separate and distinct from the federal VA Home Loan Guaranty and has lent Oregonians approximately $8 billion of low-interest home loans to more than 334,000 veterans.”

This Oregon state veteran’s home loan benefit is a conventional loan available for owner-occupied single family homes. You can purchase a home under this Oregon program if you qualify with military service even if you do not live in the state; the only requirement is that the home purchased with this Oregon state veteran’s home loan option be located within state lines and is occupied by the borrower within a reasonable amount of time after closing.

Some Veteran-Friendly Loan Programs Are Not Limited To Veteran Or Currently Serving Military Members

The Colorado Housing Authority has an excellent example of a vet-friendly mortgage loan program that is not restricted to military members and their families. The Colorado FirstStep and FirstStep Plus home loan programs are intended for “first-time homebuyers, qualified veterans, and non-first-time homebuyers purchasing in targeted areas” according to the official site.

This program, as you can see from the above, does not limit itself to military house hunters. But there are some important limitations to this particular program including:

• Offered for new purchase home loans only
• Income caps and home price limits apply
• Only available for FHA 203(b) mortgage loans
• Minimum FICO score requirement includes 620+ but borrowers “with no credit score” are permitted
• There is also a CHFA “Second Mortgage” program offered with down payment assistance, and help for other expenses

Some Programs Don’t Help Until After The Sale

There are many state-run programs that do not feature help with down payments or home loans themselves, but rather offer tax credits. One good example is the Delaware First-Time Homebuyer Tax Credit which is a tax credit that is good for 35% of the mortgage interest paid at a maximum benefit of $2,000 per year.

Normally, to be considered eligible for the Delaware First-Time Homebuyer Tax Credit, a borrower is required to:

• Meet an income cap
• Have a household income below the maximum income limits for the program
• Occupy the home purchased as the primary residence
• Not have owned a home in the past three years as your primary residence

The last requirement is waived for those applying with a “Qualified Veteran Exemption” which must be submitted with the application for this Delaware program.

Getting Started With Veteran-Friendly Home Loan Programs

The best place to begin searching for home loan programs that can benefit veterans, active duty, Guard and Reserve house hunters is likely your state’s Department of Veterans’ Affairs or Division Of Veterans Affairs official site. Remember, you need to search for the state veteran’s page and not the federal Department of Veterans Affairs offices in your state.

That said, an office of the federal VA program in your area may have information about state-provided veteran’s services so it’s not a waste of time to call the regional VA office nearest you.

You can also ask a lender, real estate agent, or other mortgage professional about well-known veteran programs in your area. Remember that not all government agencies talk to each other on a regular basis and sometimes what is known at your local government office may be different than at another branch in another housing market. But most state-level programs do have some degree of visibility on these sites regardless.

VA Loans by the Numbers

Nationally, all types of VA loans processed each year are over 620,000 and over $175 billion in loan amounts. California, Florida, Texas and Virginia typically process the most loans each year. Arizona, North Carolina, Washington, Colorado, Georgia are not far behind. States with top ten populations like New York, Pennsylvania, Illinois, and Ohio typically do not fall in the top ten in terms of VA loan volume.

Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News

Did you know there are additional VA home loan benefits for qualifying disabled veterans? Knowing the VA offers additional consideration for qualified veterans in this area can save a great deal of money and allow for the purchase of a dream home.

Disabled Veteran Loan Benefits

1. VA Loan Funding Fee Exemption

Any qualifying veteran who receives or is eligible to receive VA compensation for service-connected medical conditions, disabilities, or related issues (as determined by the VA) is exempt from paying the otherwise-mandatory VA loan funding fee. Typically this can translate to thousands in savings. See below for more information on funding fee exemption.

Changes to the VA loan program that began effective January 1, 2020 also make active duty Purple Heart recipients eligible for a VA loan funding fee waiver. For these service members, it’s required to turn in proof of active duty status and documentation of the Purple Heart award prior to closing time.

2. State Property Tax Exemptions

Most states offer some form of property tax break for those with qualifying disabilities. These tax breaks will vary from state to state, as well as the eligibility criteria for them.

3. Counting VA Disability Income

A VA-approved lender still needs to see steady income prior to approval and fortunately VA disability income can be counted towards meeting this requirement.

4. Specially Adapted Housing Grant (SAH)

The VA SAH grant is for qualifying disabled veterans who own their home or for homes owned by an “eligible individual” and assists with living independently in a barrier-free environment.

5. VA Special Housing Adaptation Grant (SHA)

SHA grants are available for veterans who have qualifying service-connected disabilities to help adapt or purchase a home to accommodate the disability.

6. VA Home Improvements and Structural Alterations (HISA) Grant

VA HISA Grants are intended for any disabled veteran with a documented medical need for alterations or modifications to a primary residence to make it more accessible. HISA Grants must be accompanied by a statement from a physician diagnosing and approving the modifications.

7. VA Temporary Residence Adaptation (TRA) Grant

The VA TRA Grant is meant for veterans who need funds to temporarily modify a relative’s residence to make it more accessible. Those who qualify for the VA SAH and VA SHA Grants mentioned above also qualify for some form of TRA assistance.

8. Mortgage Credit Certificate (MCC) Program

With a VA loan the MCC tax credit is a federal credit which can reduce potential federal income tax liability for lower-income families, creating additional net spendable income which first time home borrowers may use toward their monthly mortgage payment. State and local Housing Authorities administer the MCC program.

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What Is The VA Loan Funding Fee?

The VA Loan Funding Fee is an up-front payment that is a typical expense of buying a home with a VA mortgage. The funding fee is calculated based on the amount of the home loan. It may be paid entirely in cash or financed into the loan.

The VA Loan Funding Fee is required of all non-exempt borrowers, and is calculated based on a variety of factors including whether the borrower is a first-time user, whether the borrower is making a down payment, and whether the borrower is active duty, or a member of the Guard/Reserve. The VA loan funding fee is lower for those who choose to make a down payment.

The funding fee structure was revised effective January 1, 2020. The VA loan funding fee for forward loans is lowest for first-time VA loan borrowers who choose to make a down payment of at least 10%.

For VA mortgages, usually no down payment is required. However if you choose to make one, you get the added benefit in lower VA loan funding fees.

The fee is based on the following scale:

• First-time use with no money down – 2.3%
• 5 percent down – 1.65%
• 10 percent down – 1.4%

Second-time use VA loan funding fees are as follows:

• First-time use with no money down – 3.6%
• 5 percent down – 1.65%
• 10 percent down – 1.4%

The VA funding fee is not applicable to qualifying disabled veterans who receive or are eligible to receive VA compensation for service-related medical issues. This exemption is available when your VA records reflect your status as a disabled veteran and the information has been added to your VA Certificate of Eligibility for a VA mortgage.

As mentioned earlier in this article, certain active duty Purple Heart recipients may also qualify for the VA loan funding fee exemption, but proof of the Purple Heart must be furnished before loan closing.

It is the lender’s job to ensure that your current official status is noted for the purpose of processing your VA mortgage and determining whether you must pay the VA loan funding fee.

The VA official site requires your participating VA lender to verify exempt status using one of the following forms of documentation:

• VA Form 26-8937 Verification of VA Benefits, showing the borrower’s exempt status
• For those who accepted service retirement pay instead of VA compensation, a copy of the original VA notification of disability rating and documentation of the veteran’s service retirement income
• Indications on the borrower’s Certificate of Eligibility (COE) that the borrower is entitled to an exemption

Are You Currently Exempt From Paying The VA Loan Funding Fee?

There is a quick way to see if you are currently “on the record” as being exempt from having to pay the VA loan funding fee; when you apply for your VA loan Certificate of Eligibility (VA COE) there is a section of the COE titled “Funding Fee Status” which will show the borrower’s status.

Those who have “Exempt” in this column will not have to pay the VA loan funding fee. If your records have not yet been updated to show your exempt status, you will need to discuss your circumstances with the lender to see what may be acceptable. Again, the funding fee payment is required from those who cannot have their VA-rated disability verified before loan closing (or any other deadline as determined by the lender). The borrower is responsible for seeking a refund once disability status is updated in the VA record.

Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News