A newly proposed bill would end the Department of Veterans Affairs practice of withholding GI Bill benefits during breaks between terms.
Congressman Gilbert Cisneros, Jr. (CA-39) proposed the BREAK PAY for Veterans Act. The bill would force VA to pay Veterans their housing allowance between school terms. To save money, lawmakers previously allowed VA to cut payments during term breaks, a practice that regularly forces Veterans into financial hardship.
The Post-9/11 Veterans Educational Assistance Improvements Act of 2010 removed break pay, also called interval pay. Under the law, no VA education benefit program would pay the Veteran unless the sitting president issued an Executive Order.
Rep. Cisneros, a 10-year Navy Veteran, hopes to change the practice after it became well known that the break pay policy was forcing Veterans into hardship.
A member of the House Committee on Veterans Affairs, Rep. Cisneros will likely receive a warm welcome from student Veterans struggling to make ends meet between terms.
“Let’s do right by our college and university students, we can start by ensuring all student service members have financial support between their Fall and Spring semesters,” said Rep. Cisneros. “These students often struggle financially during their scheduled breaks in school. This legislation is a commonsense fix that will ensure our student service members are able to pay for rent, groceries, and medication. We make a promise to serve the men and women who commit to serving our country, and I am committed to working with my colleagues on both sides of the aisle on ways to ensure our nation’s heroes receive the support and services they deserve.”
Aside from debt, it can be very difficult for Veterans between terms to secure employment that pays enough to make ends meet on a temporary basis.
“GI Bill benefits are great, but the breaks in pay aren’t,” said Jacob Wolak, Lead Veteran Resource Advisor at Cal Poly Pomona and Marine Corps Veteran. “I’m glad this bill will seek to end those pay breaks. I did internships during my winter breaks, but they were all unpaid and I ate into my savings because I still had to pay rent for those months. This is a commonsense bill that will allow student Veterans to have a fair, rational benefit that they can build their budgets around.”
Student Veterans of America and at least some college professionals support the BREAK PAY for Veterans Act to prevent the month-long financial hardship between fall and spring terms at every college.
“We have worked very hard at my college to attract and support Veterans. I think we have one of the best on campus Veterans’ programs in the country,” said Manuel Baca, Ph.D., Trustee at Mt. San Antonio College and Marine Corps Veteran. “But we also have a six-week break between the Fall and Spring semester and it becomes pretty hard for us to support our Veterans when their housing money gets cut for a month and a half every year. That’s not the way the GI Bill was meant to work and I’m very glad to see Congressman Cisneros is working to address this unintended hardship.”
The bill stands to receive warm support from the Veterans community. Though, it seems safe to assume the agency will oppose the legislation out of concern that Veterans would chew up their benefits earlier than graduation.
Soldiers with over 16 years of service who want to transfer their Post-9/11 GI Bill to a dependent must do so before July 12, 2019, or risk losing the ability to transfer education benefits.
Last year, the Department of Defense implemented a new Post-9/11 GI Bill Transfer of Education Benefits, or TEB, eligibility requirement, which instituted a "six- to 16-year cutoff rule," said Master Sgt. Gerardo T. Godinez, senior Army retention operations NCO with Army G-1.
Further, soldiers who want to transfer their education entitlement must have at least six years of service, he said. All soldiers must commit to an additional four years of service to transfer their GI Bill.
However, soldiers who are currently going through the medical evaluation board process cannot transfer GI Bill benefits until they are found fit for duty under the new DOD policy.
"For Purple Heart recipients, [all] these rules do not apply," Godinez said.
Prior to the new policy, there were no restrictions on when a soldier could transfer their education benefits.
Since 2009, over 1 million soldiers have transferred their GI Bill benefits, Godinez said.
"To transfer their GI Bill, soldiers have to go into milConnect website, login with their common access card, then select the tab there that talks about the transfer education benefits," Godinez said.
If a soldier needs additional help, they can visit their installation's service and career, or education counselors. In July 2019, the new rules will be in effect and those soldiers with more than 16 years of service will not be eligible to transfer education benefits.
"Soldiers need to [review this benefit] to make an educated decision," he said.
The number of spouses of junior personnel who are using the Defense Department’s spouse tuition assistance program declined by about 45 percent between 2011 and 2017, according to a new report by government auditors.
About 7 percent of eligible spouses used the My Career Advancement Accounts in 2017, according to the report from auditors in the Government Accountability Office. The program, commonly referred to as MyCAA, provides up to $4,000 in tuition assistance for education or training for spouses of service members in the paygrades of E1 to E5, W1 to W2, and O1 to O2.
MyCAA funds can be used only for the pursuit of certificates, licenses, or associate degrees in a portable career field ― a high-growth and high-demand field that is most likely to have job openings near military installations. A recent Rand report found that the program may be contributing to higher retention rates, as well as helping the spouses’ job prospects and earnings.
Auditors said the number of military spouses receiving tuition assistance through MyCAA declined from 38,000 in fiscal 2011 to about 21,000 in fiscal 2017.
That 21,000 represented about 7 percent of the 302,000 eligible spouses using the program, which was similar to the rates for fiscal years 2014 through 2016, auditors stated.
In 2011 about 10 percent of eligible spouses were using the program.
“While we are not particularly surprised by a decline in utilization of the program, the rate decrease from 2011 to 2017 is alarming,” said Jennifer Davis, government relations deputy director for the National Military Family Association. "Since we know, based on DoD’s own data, that over 30 percent of employed military spouses are in fields requiring a license or certification which are covered by MyCAA, and military families [make permanent change of station moves] every two to three years on average, a 40-plus percent drop in program utilization is significant.
“This clearly shows that the program is not fulfilling the intent and need of these spouses. We urge DoD and Congress to look at ways to tweak the program in an effort to maximize its impact on military spouse education and employment.”
The Department of Veterans Affairs has announced the Post-9/11 GI Bill rates for the 2019-2020 school year. These rates will be effective on Aug. 1, 2019. The Montgomery GI Bill and Dependents' Education Assistance programs will see a rate change on Oct. 1, 2019.
By law, the GI Bill rate increase is tied to the average cost increase of undergraduate tuition in the U.S. For the 2019-2020 school year, that increase will average 3.4%.
More than 80 percent of those taking advantage of their GI Bill benefits are doing so through the Post-9/11 GI Bill.
Private & Foreign School GI Bill Rates
Effective Aug. 1, those using the Post-9/11 GI Bill at a private or foreign school will see their maximum yearly GI Bill rate increase from $23,671.94 to $24,476.79.
Those who are enrolled in flight schools will see their annual maximum GI Bill benefit increase from $13,526.81 to $13,986.72.
You can be reimbursed up to $2,000 per test for licensing and certification tests. For national testing programs, there is no maximum amount of GI Bill reimbursement. Your entitlement will be charged one month for every $2,042.06 spent; currently, that trigger point is $1,974.91.
You can be reimbursed the actual net costs, not to exceed $11,888.70 annually. That's up from $11,497.78 currently.
Monthly Housing Allowance
The Monthly Housing Allowance is also scheduled to change on Aug. 1.
If you are attending classroom sessions, your housing allowance is based on the ZIP code of the campus location where you attend the majority of your classes.
If you are attending classes at a foreign school, not on a military base, your maximum housing allowance will be $1,789.00. This is prorated based on the length of your active-duty service and how many classes you are taking.
If you attend all your classes online, your maximum housing allowance will be $894.50. This is also prorated.
Keep Up With Your Education Benefits
Whether you need a guide on how to use your GI Bill, want to take advantage of tuition assistance and scholarships, or get the lowdown on education benefits available for your family, Military.com can help. Sign up for a free Military.com membership to have education tips and benefits updates delivered directly to your inbox.
The GI Bill, Vocational Rehabilitation and other education and employment benefits may get a major overhaul should new proposed legislation pass.
Earlier this week, bi-partisan lawmakers revived an old push to peal out the education and employment benefits cash cows from Veterans Benefits Administration. Over the years, finance wizards have moved discretionary funds necessary to administer GI Bill, for example, a practice now credited with the recent Forever GI Bill software flop.
Over a hundred thousand veterans had their GI Bill payments delayed or erroneously adjudicated when a software glitch triggered processing errors. The agency promised to have the software ready by last October, but various mistakes forced delays and errors.
Lawmakers now justify the new legislation using the GI Bill example where the agency lacked direct political oversight of the GI Bill.
The new system would be the fourth administration focused on education and employment activities. The legislative shift passed the House committee last year but went nowhere in the Senate.
Lack Of Attention
The shift is believed to improve services for veterans in transition by resolving the “lack of attention” that failed the agency’s Vocational Rehabilitation, GI Bill and Home Loan benefits programs.
“By aligning transition, education, and employment programs in a fourth administration within VA, we will ensure that these opportunity-focused programs get the high priority they deserve, and the oversight they need to better serve veterans,” House bill sponsor Rep. Brad Wenstrup, R-Ohio, said in a statement.
Sen. Marco Rubio, R-FL supports the legislation saying it would “modernize the outdated structure of the VA and provide more direct oversight and accountability over existing programs aimed at helping our veterans lead economically prosperous lives post-service.”
It is presently supported by Student Veterans of America, Disabled Veterans of America, Tragedy Assistance Program for Survivors, Paralyzed Veterans of America, and Veterans Education Success.
I have been talking with insiders about the creation of a fourth administration for years and fully support the move. Officials inside Veterans Benefits Administration have made a habit of moving funds dedicated to education programs into disability claims system upgrades like the electronic claims system.
The theory behind creating the new administration is that added focus from the President directly through the appointee would increase accountability.
However, many of the old leaders of the agency reject the idea and believe that an additional layer of bureaucracy is not needed. Though, the current system clearly subordinates all educational benefits programs to the needs of the Disability Compensation system and the needs of the contractor propping it up.
But what do you think? Will adding another layer of bureaucracy is the big fix or will it create more problems?
I Would Help Out
I would definitely throw my hat in the ring to help form the new administration if asked should the new legislation pass, though I will not hold my breath on being asked to help with much of anything.
For the past decade, since I’ve been writing about the Veterans Benefits Administration, one thing has remained constant – – and that one thing is a lack of appropriate funding for Vocational Rehabilitation & Employment.
Even though that benefits program is far superior to the GI Bill for disabled veterans, it still lacks the funding and staffing to make it perform the way the People intended through the laws of Congress.
For the past decade, the number of applicants to Voc Rehab has increased by more than double from around 70,000 to 180,000 disabled veterans.
Meanwhile, the number of veterans approved for program benefits remains static at around 30,000 with program graduates coming in around 12,000 per year.
Expanded list of diseases linked to the herbicide means more Veterans and their survivors qualify
Many Vietnam Veterans and their survivors may be missing out on substantial payments they are entitled to receive as a result of exposure to Agent Orange, Veterans’ advocates say.
Though most Veterans are aware of the toxic nature of Agent Orange, an herbicide used to clear foliage in Vietnam, not everyone has kept track as the U.S. Department of Veterans Affairs has expanded a list of diseases that make it easier to qualify for benefits. Until the 1990s, the government recognized only one ailment – a skin condition called chloracne – as being linked to Agent Orange. But over the years, the VA list of medical conditions associated with Agent Orange has grown to more than a dozen, including some that are much more prevalent.
“There are still thousands of Vets who don’t realize their disease is on the list,” says Bart Stichman, executive director of the National Veterans Legal Services Program (NVLSP), a nonprofit that helps Veterans, survivors and active duty personnel pursue service-related benefits.
The diseases now on the VA’s Agent Orange list are ischemic heart disease, lung and trachea cancers, prostate cancer, multiple myeloma, Hodgkin’s disease, non-Hodgkin’s lymphoma, Parkinson’s Disease, type 2 diabetes, peripheral neuropathy, AL amyloidosis, chronic B-cell leukemia, chloracne, early-onset peripheral neuropathy, porphyria cutanea tarda, and soft tissue sarcomas.
Several other diseases — bladder cancer, hypothyroidism, hypertension and Parkinson’s-like symptoms — have been under consideration to be added to the list.
Once a disease is put on the list, it is easier to get disability compensation for it because the VA presumes the disease is a result of exposure to Agent Orange for Veterans who served in Vietnam or its inland waterways between 1962 and 1975. The same applies to Veterans who served in or near the Korean demilitarized zone between 1968 and 1971. These Veterans don’t need to prove that they were exposed to Agent Orange to qualify for benefits related to ailments on the list.
For Veterans who qualify for disability payments and survivors who qualify for death payments, the benefits can mean tens of thousands of dollars a year in income.
The problem, Veterans advocates say, is that Veterans don’t necessarily make the connection between a disease they have had for years and the expanded Agent Orange list. For example, a Veteran diagnosed decades ago with type 2 diabetes may not have noticed when the government later added the condition to its list of ailments linked to Agent Orange, says Linda Schwartz, special advisor on health to the Vietnam Veterans of America. If a Veteran is seeing a civilian doctor who isn’t well-versed in Veterans’ issues, she says, the doctor wouldn’t necessarily associate the diagnosis with Agent Orange.
When Veterans don’t think to apply for disability benefits based on conditions added to the VA’s Agent Orange list in recent years, they can miss out on sizable payments. David DePodesta, a 69-year-old Veteran who lost sight in his right eye due to enemy shrapnel while serving with the Marines in Vietnam in 1969, was fortunate that he did pay attention to the list as it grew. DePodesta says that for many years his eye injury qualified him for a disability rating of 30 percent and a monthly payment of under $400. After the VA in 2010 added ischemic heart disease to its list of ailments linked to Agent Orange, DePodesta — who had open heart surgery in 1988 and again in 2010 — saw his disability rating jump to 100 percent and his monthly payment jump to more than $3,100. He also received a large lump sum payment compensating him retroactively to his first diagnosis with ischemic heart disease.
DePodesta, a retired mortgage banker who works occasionally as a substitute teacher and serves as a prison chaplain, says the monthly benefits together with the retroactive payment made a “pretty big change in my lifestyle."
“Getting extra compensation certainly helps. We’re not wealthy,’’ he says. “We get by with Social Security and the compensation and substitute teaching.’’
When Veterans don’t realize that they are eligible for disability benefits based on ailments added to the VA’s Agent Orange list, their survivors also miss out on monthly payments under a program called Dependency and Indemnity Compensation (DIC), which provides lifetime tax-free income to survivors of Veterans who had service-related disabilities or diseases.
Stichman at NVLSP estimates that tens of thousands of survivors are unaware they are eligible for benefits because their spouses had diseases that the VA linked to Agent Orange only after their death. Survivor benefits can be higher depending on their situation, including whether they need a caregiver to assist them with everyday activities like bathing and dressing.
Like Veterans, survivors also can sometimes get retroactive payments in addition to qualifying for monthly death benefits. Stichman says his organization helped an Alabama widow persuade the VA to pay her $247,508 in retroactive benefits. The woman’s husband, a Vietnam Veteran, had died of cardiac ischemia in 1983, but the VA had rejected a request for a death pension that she filed in 1985. Because the VA decades later added ischemic heart disease to its list of Agent Orange-related diseases, the widow was able to make the case that she should have been getting benefits all those years.
Even if Veterans suffer from an ailment not on the VA list, they should consider applying for disability benefits if they believe it is the result of Agent Orange exposure. The VA says it encourages Veterans in such cases to gather medical and scientific evidence that their ailment was caused by Agent Orange and submit it to see if it qualifies them for a service-connected disability benefit.
“If a direct link is made to Agent Orange exposure in a particular case, then service connection could still be granted,’’ says Beth Murphy, VA Compensation Service Director.
Veterans service groups say it can be worth trying to bring such claims even though they can be difficult.
“This type of case requires a lot of medical evidence and is harder to prove but not impossible,’’ says Felicia Mullaney, deputy director of Veterans Benefits, Vietnam Veterans of America.
Because disability claims can be complicated, Linda Schwartz at VVA says it's vital for Veterans and survivors to use an accredited Veteran service officer when filing such claims.
“They can’t do this by themselves,” says Schwartz.
The VA suggests that Veterans can get help from this list of government-accredited Veterans and Military Service Organizations. Veterans and survivors also can learn more about eligibility for benefits.
One way for Veterans to get started if they’ve never explored a link between their medical ailments and Agent Orange is to see if they qualify for a free Agent Orange exam.
(Some pieces deserve a repeat run)
WASHINGTON, D.C. (WBRE/WYOU-TV) -- A Veteran’s advocacy group is urging Congress to provide additional VA health benefits to Veterans who may have been exposed to toxic chemicals while serving in Guam and American Samoa.
Eyewitness News Washington Correspondent Mark Meredith with why some say the effort is long overdue.
Sheila Kilpatrick’s husband Lonnie died of cancer last year.
She says his poor health stemmed from exposure to toxic chemicals, like agent orange, while he served in Guam in the 1970s.
"We know this was due to the herbicides that were sprayed on Guam, we know that we witnessed the spraying" Said Kilpatrick.
The Kilpatrick family says they faced pushback from the VA over efforts to get additional health benefits.
Two congressmen call that unacceptable.
"Four decades is far too long, we can't wait any longer, our Veterans are heroes," Said Florida Representative Gus Bilirakis.
Bilirakis and Guam’s delegate introduced a new bill to expand health benefits for Veterans who served in the Pacific Islands.
"If it was toxic enough for us to discontinue their use since in 1980, then it was creating hazards for our Veterans and our communities, that we need to acknowledge," Said Rep. Michael San Nicolas, Guam
In January a federal judge ruled the v-a must consider benefit claims from navy Veterans who say they too were exposed to toxic chemicals while serving off the Vietnam Coast.
Veteran advocates say that ruling allows them to focus on cases involving people who served in Guam.
Kilpatrick says she expects the fight will take months but remains optimistic.
"Oh I’m not giving up, no way I’m giving up, I’ll fight wherever I have to go, I don't like to fly but if i have to fly...I'll fly again"
If you’re a wartime Veteran who meets certain age or disability requirements, and your income and net worth are within certain limits, you may qualify for monthly payments through our Veterans Pension program. Find out if you can get this benefit.
Can I get Veterans pension benefits from VA?
You may be able to get pension benefits if you meet the requirements listed below.
Both of these must be true:
- You didn’t receive a dishonorable discharge, and
- Your yearly family income and net worth meet certain limits set by Congress. Your net worth includes all personal property you own (except your house, your car, and most home furnishings), minus any debt you owe. Your net worth includes the net worth of your spouse.
And at least one of these must be true about your service. You:
- Started on active duty before September 8, 1980, and you served at least 90 days on active duty with at least 1 day during wartime, or
- Started on active duty as an enlisted person after September 7, 1980, and served at least 24 months or the full period for which you were called or ordered to active duty (with some exceptions) with at least 1 day during wartime, or
- Were an officer and started on active duty after October 16, 1981, and you hadn’t previously served on active duty for at least 24 months
And at least one of these must be true. You:
- Are at least 65 years old, or
- Have a permanent and total disability, or
- Are a patient in a nursing home for long-term care because of a disability, or
- Are getting Social Security Disability Insurance or Supplemental Security Income
How do I know if I served under an eligible wartime period?
Under current law, we recognize the following wartime periods to decide eligibility for pension benefits:
- Mexican Border period (May 9, 1916, to April 5, 1917, for Veterans who served in Mexico, on its borders, or in adjacent waters)
- World War I (April 6, 1917, to November 11, 1918)
- World War II (December 7, 1941, to December 31, 1946)
- Korean conflict (June 27, 1950, to January 31, 1955)
- Vietnam War era (February 28, 1961, to May 7, 1975, for Veterans who served in the Republic of Vietnam during that period. August 5, 1964, to May 7, 1975, for Veterans who served outside the Republic of Vietnam.)
- Gulf War (August 2, 1990, through a future date to be set by law or presidential proclamation)
What should I do if I received an other than honorable, bad conduct, or dishonorable discharge?
If you’ve received one of these discharge statuses, you may not be eligible for VA benefits.
There are 2 ways you can try to qualify:
How do I apply?
You can apply online right now.
As the number of appeals filed with the VA increases, the average wait time for Veterans to receive decisions increases exponentially. In order to try and rectify the clogged up system, President Trump signed into law the Veterans Appeals Improvement and Modernization Act of 2017 which introduced the RAMP program. This Act revamps the entire VA disability benefits appeals process and will replace the current appeal system. The new appeals system is set to replace the current “legacy” system on February 19, 2019.
Any claims filed on or after February 19, 2019, will be worked under the new appeals system. If you currently have pending appeals in the legacy system and you did not opt your appeals into the RAMP program, they will continue to be worked under the legacy system. The plan is for the VA to work all of the legacy appeals until all appeals are under the new system, though this process could take years to complete. The VA will be conducting reviews of appeals in the legacy system and new system simultaneously.
Under the new system, once a Veteran receives a decision, he or she still has one year from the date of the decision to appeal it. If the Veteran decides to appeal the decision, he or she must choose between three appeal avenues or lanes: Higher Level Review, Supplemental Claim, or file a Notice of Disagreement (NOD) directly to the Board of Veterans Appeals.
Higher Level Review
Currently, there are two Regional Offices conducting Higher Level Reviews: Seattle and St. Petersburg. In the Higher Level Review lane, a more senior VA adjudicator (called Decision Review Officers in the Legacy system) will perform a de novo review of your file and make a decision based on the evidence already of record. De novo means that they will review your appeal without regard to prior decisions and make a decision based on their view of all of the evidence. In this lane, you are basically getting a different person to review the same evidence because you cannot submit new evidence in this lane. There is no duty by the VA to assist in gathering additional evidence or records; the decision is made based on the evidence in the record. This lane in the RAMP program could potentially be utilized for extremely blatant and obvious errors that could be easily rectified without the need for additional evidence.
The Supplemental Lane will be conducted at various Regional Offices throughout the United States. In this lane, new evidence is required to reopen a previously denied claim or file for an increased rating of a service-connected condition. The evidence must be “new and relevant” to the claim; “new” meaning not previously submitted or received by the VA and “relevant” meaning significant and related evidence to the issue you are claiming. For example, the new and relevant evidence could be evidence of symptoms warranting an increased rating or a nexus opinion for service connection. In the Supplemental Lane of the RAMP program, the VA has a duty to assist the Veteran in developing or finding evidence for their claim. For example, if you send correspondence stating that you have been receiving treatment at a specific facility and give details of the time period, providers, and other related issues, the VA has a duty to try and find these records for you. The more specific you are, the easier it will be for the VA to find the records. However, it may be better for you to get the records and send them to the VA as new and relevant evidence so that you know they will be added to your file.
NOD Direct to the Board
I find this to be the most interesting change in the new system. In the legacy system, a Veteran had to wait to get a rating decision and then appeal it with an NOD. Then the Veteran had to wait to receive a Statement of the Case and then file a VA Form 9 to get in line for review at the Board. This process could take an average of at least 3+ years. The new RAMP program cuts out Statement of the Cases and VA Form 9s allowing Veterans the ability to appeal directly to the Board after receiving a rating decision. This could potentially save a lot of time for more complicated issues that would likely not get granted at the Regional Office, like non-presumptive Agent Orange conditions.
If a Veteran chooses to file an NOD directly to the Board, there are three review options to choose from:
- Direct Review: This lane will most likely be the fastest lane at the Board. It is a review by the Board based on the evidence of record at the time of the prior decision. This means that additional evidence cannot be filed and there is no request for a hearing. The Board makes a decision based solely on the evidence of record.
- Evidence Submission: This lane allows for submission of additional evidence but within 90 days of filing the NOD. There is no request for hearing so the Board makes their decision based on the evidence of record and any additional evidence filed within the 90 day period.
- Hearing: This lane will most likely be the slowest lane as additional evidence can be submitted and there is a request for hearing. This means that evidence can continue to be submitted until the Board schedules and conducts a hearing with the Veteran.
There are many similarities but also differences between the legacy system and the RAMP program’s appeals system. It is important to know your options moving forward with your current appeals and any future appeals. These changes are expected to go into effect February 19, 2019, and we will continue to update on these changes as we enter this new chapter in VA appeals.
More than 21 million Veterans and Servicemembers live in the U.S. today, but only about 6 percent of them bought a home using a VA home loan in the past five years. That percentage could be much higher.
Eligible Veterans often bypass the program as a viable option for a number of reasons.
First, they may not know all the advantages. Second, they may think getting a VA loan is an arduous process to be avoided. Last, some lenders don’t take the time to teach Veterans about the program, or don’t know much about it themselves. The VA home loan is a program non-military home buyers wish they had access to.
My advice: take a few minutes to learn these 10 facts about the program, and you’ll all but forget about any other home buying or refinance option.
1. No down payment, no mortgage insurance
These are perhaps the biggest advantages to a VA loan. You don’t need a down payment. None whatsoever. Most mortgage programs, such as FHA and conventional loans, require at least 3.5 percent to five percent down.That’s up to $12,500 on a $250,000 home purchase.
With a VA loan, you can buy immediately, rather than years of saving for a down payment. With a VA loan, you also avoid steep mortgage insurance fees. At 5 percent down, private mortgage insurance (PMI) costs $150 per month on a $250,000 home, according to PMI provider MGIC.
With a VA loan, this buyer could afford a home worth $30,000 more with the same monthly payment, simply be eliminating PMI. Using a VA loan saves you money upfront, and tremendously increases your buying power.
2. Use your benefit again and again
Your VA home loan benefit is not one-and-done. You can use it as many times as you want. Here’s how.
Assume you purchased a home with a VA loan. But now, you’ve outgrown the home and need something bigger. When you sell the home and pay off the VA loan completely, you can re-use your benefit to buy another home. Your entitlement is restored in full.
But that’s not the only way to re-use your benefit.
Eligible Veterans and Servicepersons can receive a one-time restoration when they pay off the VA loan, but keep the home. This scenario comes into play if you purchased the home long ago, and have paid off the loan. It also applies if you have refinanced the VA mortgage with a non-VA loan.
In these cases, you can keep the home, and enjoy the benefits of VA home buying one more time.
3. Your benefit never expires
Once you have earned eligibility for the VA home loan, it never goes away. Those who served 20, 30, even 50 years ago often wonder whether they can still buy a home today if they never used their benefit. If eligibility can be established, the answer is yes.
Eligibility is based on the length of time served, and the period in which you served. For instance, a U.S. Army Veteran with at least 90 days in service during the Vietnam era is likely eligible.
To check eligibility, first obtain your DD Form 214. With that document, a VA-approved lender can request your VA Certificate of Eligibility for you, or you can request it directly from VA’s eBenefits website. You may be eligible to buy a home using a VA home loan, even if you served long ago.
4. Surviving spouses may be eligible
More than 3,000 surviving spouses purchased a home with their fallen partner’s VA benefit in 2015. Un-remarried husbands and wives of Servicepersons who were killed in action can buy a home with zero downpayment and no mortgage insurance. Plus, the VA funding fee is waived.
There’s no way to repay the spouse of a fallen hero, but this benefit surely helps them move forward after tragedy.
5. VA Loan Rates Are Lower
According to loan software company Ellie Mae, VA loan rates are typically about 0.25% lower than those of conventional loans. The VA backs the mortgages, making them a lower risk for lenders. Those savings are passed on to Veterans.
Additionally, VA loans come with some of the lowest foreclosure rates of any loan type, further reducing risk for lenders. No surprise here, but Veterans and Servicepersons take homeownership seriously. These factors add up to lower rates and affordable payments for those who choose a VA loan.
6. VA loans are available from local lenders
The VA home loan is unlike most other VA benefits. This benefit is available from private companies, not the government itself. The Department of Veterans Affairs does not take applications, approve the loans, or issue funds. Private banks, credit unions, and mortgage companies do that.
The VA provides insurance to lenders. It’s officially called the VA guaranty. The VA assures the lender that it will be repaid if the Veteran can no longer make payments. In turn, lenders issue loans at superior terms. In short, a VA loan gives you the best of both worlds. You enjoy your benefit, but have the convenience and speed of working with your chosen lender.
7. Buy, refinance or tap into home equity
The VA home loan benefit is not just for buying homes. Sure, it provides unmatched home buying advantages, but you can also use it to refinance your existing mortgage, whether it’s a VA loan or not.
Homeowners with a VA loan can use the Interest Rate Reduction Refinancing Loan, or IRRRL, to easily drop their rate and payment without an appraisal, or even paystubs, W2s or bank statements. The VA streamline refinance, as it is commonly known, gives VA loan holders a faster, cheaper way to access lower refinance rates when rates fall.
Even homeowners without a VA loan can use a VA refinance. The VA cash-out loan is available to eligible Veterans who don’t have a VA loan currently. As its name suggests, a VA cash-out refinance can be used to turn your home’s equity into cash. You simply take out a bigger loan than what you currently owe. The difference is issued to you at closing.
The VA cash-out loan amount can be up to 100 percent of your home’s value in many cases. Use the proceeds for any purpose – home improvements, college tuition, or even a new car.Many homeowners today are dropping their rate and taking cash out simultaneously, accomplishing two goals at once.
But you don’t have to take out cash to use this VA loan option. You can also use it to pay off a non-VA loan. Eligible homeowners who pay mortgage insurance or are dealing with other undesirable loan characteristics should look into refinancing with a VA loan. It can eliminate PMI, get you into a stable fixed-rate loan, pay off a second mortgage, or simply reduce your rate to make homeownership more affordable.
8. Lenient guidelines for lower credit scores, bankruptcy, foreclosure
Unlike many loan programs, a lower credit score, bankruptcy or foreclosure does not disqualify you from a VA home loan.
Shop around at various lenders, because each will have its own stance on past credit issues. However, VA guidelines do not state a minimum credit score to qualify. This gives lenders leniency to approve loans with lower scores. In addition, VA considers your credit re-established when you have established two years of clean credit following a foreclosure or bankruptcy.
Many homeowners across the U.S., military and civilian, experience bankruptcies and foreclosures due to a loss of income, medical emergency or unforeseen event. Fortunately, these financial setbacks don’t permanently bar VA-eligible home buyers from ever owning again.
The exception, though, is a foreclosure involving a VA home loan. In this case, you may need to pay back the amount owed on the foreclosed VA loan to regain eligibility. But for most home buyers with past credit issues, a VA home loan could be their ticket to homeownership.
9. Funding fee waivers
VA typically charges a funding fee to defray the cost of the program and make home buying sustainable for future Veterans. The fee is between 0.50 percent and 3.3 percent of the loan amount, depending on service history and the loan type.
However, not everyone pays the VA funding fee. Disabled Veterans who are receiving compensation for a service-connected disability are exempt. Likewise, Veterans who are eligible for disability compensation, but are receiving retirement or active duty pay instead, are also exempt from the fee.
10. Buy a condo with a VA loan
You can buy many types of properties with a VA loan, including a single-family (free-standing) home, a home of up to four units, and even manufactured homes. But condominiums are commonly overlooked by VA home buyers.
Condominiums are ideal starter homes. Their price point is often lower than that of single-family homes. And, condos are often the only affordable option in many cities.
The VA maintains a list of approved condominium communities. Veterans can search by city, state, or even condominium name on VA’s condo search tool. It’s not a short list. For example, there are more than 2,400 approved condo communities in Washington State, about 1,000 in Texas, and a staggering 9,000 in California.
As a Veteran or Servicemember, consider the array of home types when shopping for a home.
11. There are more than 10 reasons to use a VA home loan
The preceding 10 facts are just a few, and there are actually many more reasons to use your VA loan benefit. You’ve certainly earned it.
The freedom afforded to this country by members of all branches of the military, past and present, is not easily repaid. But consider this program a small “thank you” for your service and dedication.