Explore Financial Services Benefits
Learning Objectives
After completing this unit, you’ll be able to:
- Explain what financial assistance benefits are available through the VA.
- Understand the types of housing and loan assistance benefits that are available.
- Understand the life insurance options available through the VA.
- Articulate what the VA offers for disability benefits and who qualifies for that benefit.
VA Provides Financial Benefits and Services to Veterans
VA provides benefits that can help Veterans financially throughout their lives following their military service. Financial support comes in the form of housing loans and grants, life insurance, and disability compensation.
VA’s home loan program can be accessed by eligible Veterans and active-duty National Guard and Reserve members. VA loans feature positive terms such as no down payment or mortgage insurance premiums. VA also offers housing benefits and grants such as guaranteed loans, refinancing loans, and specially adapted housing grants. The VA home loan benefit fees (called a “funding fee”) can also be waived for Veterans with service-connected disabilities.
Veterans can also enjoy peace of mind by protecting their families with VA’s insurance benefits. VA insurance benefits were developed with consideration for the extra risks of military service.
Service-connected disability compensation is a tax-free benefit paid to Veterans for a disability (or disabilities) that arose during service, was worsened or aggravated by service, or is presumed by VA to be related to military service.
VA Home Loans
VA direct and VA-backed Veterans home loans are designed to help Veterans, service members, and their survivors to buy, build, improve, or refinance a home.
You will need the required credit and income for the loan amount you want to borrow. But a Veteran’s home loan may offer better terms than a traditional loan. For example, nearly 90% of VA-backed loans are made with no down payment.
The VA home loan programs work a little differently depending on the type of loan. There is one VA direct loan and three VA-backed loans.
VA Direct Loan
The Native American Direct Loan (NADL) is a VA direct loan. This means VA serves as your mortgage lender and you work directly with VA to apply for and manage your loan. If you’re a Veteran, and either you or your spouse is Native American, the NADL program may help you get a loan to buy, build, or improve a home on federal trust land.
VA-Backed Loans
With a VA-backed home loan, VA guarantees a portion of the loan you get from a private lender. Since that means there is less risk for the lender, they’re more likely to give you the loan under better terms.
There are three types of VA-backed loans.
- Purchase loan: A VA-backed purchase loan can help you buy, build, or improve a home. This type of loan may feature no down payment, better terms and interest rates, and fewer closing costs.
- Interest rate reduction refinance loan (IRRRL): If you have an existing VA-backed home loan and you want to reduce your monthly mortgage payments—or make your payments more stable—an IRRRL may be right for you. Refinancing lets you replace your current loan with a new one under different terms.
- Cash-out refinance loan: This loan lets you replace your current loan with a new one under different terms. You may want to use this loan to take cash out of your home equity or to refinance a non-VA loan into a VA-backed loan.
Find Out If You’re Eligible for a VA Loan
You need to apply through VA.gov for a Certificate of Eligibility (COE) to show your lender that you qualify for a VA loan based on your service history and duty status. Keep in mind that for a VA-backed home loan, you also need to meet your lender’s credit and income loan requirements to receive financing.
Applying for your COE is only one part of the process for getting a VA direct or VA-backed home loan. Your next steps depend on the type of loan you’re looking to get—and on your lender.
To learn more about VA loans you can:
- Ask your lender about your VA loan options.
- Visit https://www.va.gov/housing-assistance/.
- Call your VA regional loan center at 877-827-3702.
VA Life Insurance
VA life insurance can offer financial security for Veterans, service members, and their spouses and dependent children. Different life insurance programs cover Veterans, service members, and family members.
You may also be able to get short-term financial coverage to help you recover from a traumatic (severe) injury. And if you’re disabled because of an injury or illness caused—or made worse—by your active service, you may be able to get coverage to continue your life insurance beyond 2 years after you leave the military.
VA life insurance options include:
- Servicemembers’ Group Life Insurance: This group life insurance is for those currently serving.
- Family Servicemembers’ Group Life Insurance: Coverage for your spouse and dependent children.
- Traumatic Injury Protection: Short-term financial support while you are recovering from a severe injury.
- Veterans’ Group Life Insurance: Group life insurance for Veterans who have ended their service.
- Service-Disabled Veterans Insurance: For Veterans who are disabled because of an injury or illness caused or made worse by active-duty service. This insurance allows those service-disabled Veterans to continue their insurance beyond 2 years after they leave military service.
- Veterans’ Mortgage Life Insurance: For Veterans who have service-connected disabilities, this coverage helps them get mortgage protection for a home that’s been adapted to meet their needs.
If you have VA life insurance coverage and you become totally disabled or terminally ill, you may be eligible for certain benefit options. Your spouse may also be eligible for certain options if diagnosed with a terminal illness.
Financial Planning for Beneficiaries
VA makes financial planning and online will preparation services available at no cost to beneficiaries of some of these insurance policies.
Beneficiaries can access free, professional financial advice from FinancialPoint, an independent company whose team of professionals are experts in handling a wide range of financial matters.
The online will preparation service enables beneficiaries to quickly and easily prepare a will without an attorney. After answering a series of straightforward questions, the beneficiary will receive a legal will, valid in all states, ready to print and sign.
VA Disability Benefits
VA disability benefits may include tax-free compensation and health benefits for Veterans who got sick or injured while serving in the military and to Veterans whose service made an existing condition worse.
Who Is Eligible?
You may qualify for VA disability benefits for physical conditions (like a chronic illness or injury) and mental health conditions (like PTSD) that developed before, during, or after service.
To learn more about eligibility requirements for disability benefits, visit https://www.va.gov/disability/eligibility/.
If you’re a service member or Veteran and have a disability that was caused—or made worse—by your active-duty service and that limits your ability to work or prevents you from working, you may be able to get employment support or services to help you live as independently as possible. This is through the Veteran Readiness and Employment program (VR&E)—formerly called Vocational Rehabilitation and Employment.
Filing a Claim
To start a claim for VA disability pay, you need to find out if you’re eligible, gather any supporting documents, and be sure your claim is filled out completely. Veteran service organizations and their representatives play a vital role in this process, often representing Veterans for free in their claims for benefits.
After you file your claim, it takes on average about 130 days for VA to make a decision, but can sometimes take more or less time. During that time you can track the status of your claim online. You don’t need to do anything unless the VA sends you a letter asking for more information.
If you’re the surviving spouse, child, or parent of a service member who died in the line of duty, or the survivor of a Veteran who died from a service-related injury or illness, you may be able to get a tax-free monetary benefit called VA Dependency and Indemnity Compensation (VA DIC).