State-Run Veteran Friendly Home Loan Programs

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.

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

• Alaska
  • Alaska Housing Finance Corporation (AHFC) Loan Programs:
    • 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.
    • AHFC First Home Limited Program: The AHFC First Home Limited mortgage loan program provides reduced-rate mortgages for qualifying first-time homebuyers who meet maximum income limits and acquisition cost limits OR who qualify as veterans 
      
    • AHFC First Home Program: Similar to the Limited version of the program listed above, the AHFC First Home reduced interest-rate loan program is offered to qualifying first-time home buyers including veterans. However, unlike the Limited option, this veteran-friendly mortgage program features no income limits or sales price caps.
• California
  • CalVet Program: Qualifying veterans receive below market interest rates with low or no down payment requirements.
• Colorado
  • Colorado Housing Finance Authority (CHFA) Loan Programs:
    • 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.
    • CHFA SmartStep and SmartStep Plus: These CHFA loans are provided to veterans, first-time home buyers, and non-first time buyers alike. VA mortgages are included in the list of eligible government-backed loan programs available via CHFA SmartStep/SmartStep Plus.
• Connecticut
  • The CFHA 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
  • Delaware State Housing Authority Loan Programs:
    • Delaware State Housing Authority Preferred Plus Home Loan: This program assists borrowers who want to purchase a primary residence; this program uses a network of participating lenders who can work with VA mortgages and other government-backed loans or conventional equivalents.
    • 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.
    • Delaware First-Time Home Buyer Transfer Tax Break: While not specifically aimed at veterans or currently serving military members, any applicant who bought a first home after Aug. 1, 2017 and paid an increased Delaware State Transfer Tax (at a rate of 1.25%) may be entitled to a refund.
• 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.
  • IHCDA First Place Program: This Indiana veteran-friendly First Place loan features down payment assistance of six percent based on the purchase price of the home (but may not exceed the appraised value) for first-time home buyers OR qualifying veterans.
    
  • IHCDA Helping To Own (H2O) Program: Helping To Own is a program offering Down Payment Assistance of 3.5% (based on purchase price and must not exceed the appraised value) for first-time home buyers or qualifying veterans. This assistance may be considered a grant as long as program guidelines are met.
• Iowa
  • Iowa Finance Authority Programs:
    • IFA FirstHome Mortgage Program: This is a first-time home buyer program open to veterans (who don’t have to be first-time buyers) featuring lower interest rates (which are not affected by credit score–an important feature) and lower fees, according to the official site.
    • IFA Home For Iowans Mortgage Program: All requirements are similar including similar to the FirstHome Program (actual dollar amounts may vary) income caps, purchase price caps, and other rules. The biggest difference is the Home For Iowans program is for both first-time home buyers AND repeat borrowers.
    • 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
  • Louisiana Housing Corporation Loan Programs:
    • Market Rate GNMA Program: This program offers qualified veterans 30-year, fixed-rate FHA, VA or USDA Rural Development mortgages at favorable interest rates.
    • Mortgage Bond Revenue Home Program: Bond programs are often provided for need-based loans for borrowers meeting income caps and purchase price limits. Veterans are not specifically targeted with this program but those who meet income and purchase requirements are welcome to apply.
    • Mortgage Revenue Bond Assisted Program: This is another LHC program offering assistance for prospective homebuyers (veterans or not) who need help with down payment and closing expenses.
• Maine
  • SaluteME/SaluteME Home Again Programs: Maine Housing 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
  • Maryland Home Loan Programs:
    • 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.
    • SmartBuy Program: This program offers “selected state-owned homes” available for purchase with qualifying home buyers able to apply for special financing that can “pay off their outstanding student debt as part of the home purchase.”
      
    • Disabled Veteran-Friendly Maryland State Tax Credit For Adapted Housing: While this program is not specifically aimed at disabled veterans, those who qualify may find a state tax credit available for making adaptive alterations or improvements to a Maryland home to make it more accessible for a disabled home owner who has adapted the home to provide more independent living.
      
    • The Maryland Mortgage Program (MMP): MMP offers qualifying veterans a 30-year fixed-rate home loan for homes purchased within the state. Interest rates and other loan terms are described as being “competitive” with other home loans.
      
• Massachusetts
  • MassHousing Home Loan Programs:
    • Home for the Brave Program: eMassHousing offers affordable, no-down payment mortgage financing for veterans of the U.S. Armed Services.
    • Operation Welcome Home Mortgages: This program offers home loans with affordable terms for members of the Guard, Reserve, active-duty military, Veterans and Gold Star families. This program is need-based, has income limits and purchase price restrictions and targeted area financing may apply. This program offers up to $2,500 in closing cost assistance and may be combined with MassHousing down payment assistance.
• 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
  • Home Loan Programs:
  • 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.
  • Next Step Program: This program is meant for “non-first time home buyers” including qualifying veterans who lack “sufficient equity or funds” for the down payment on a new primary residence.
• Nebraska
  • Home Loan Programs:
  • MIFA 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.
  • NIFA First Home Programs
    • NIFA First Home Targeted Program: For buyers who purchase a home located in a target area and do not need down payment and closing cost assistance.
    • NIFA Homebuyer Assistance Program: The Homebuyer Assistance (HBA) Program offers down payment help to qualifying borrowers to help those who want to buy a home but do not have enough money saved for downpayment and/or closing costs.
• 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
  • Homeownership for the Brave (Part of The Great Choice 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
  • Home Loan Programs:
  • 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.
  • Washington Home Advantage Government Program: This program is offered to qualifying applicants who meet the program’s income restrictions and credit score requirements. The mortgages eligible under this program include most government-backed mortgage loan programs including VA mortgages.
  • WSHFC House Key Home Loan Program: Those who are eligible to apply for Veterans Down Payment assistance are offered access to the House Key home loan program, but there are also opportunities for those who want to purchase “never occupied new construction” or homes in a community land trust with or without the above downpayment assistance options. The WSHFC official site provides few details about the terms of the loan you can apply for as a qualifying veteran but below market interest rate mortgage loans are available through this program.

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.