The VA home loan benefit is well earned and well deserved. There simply is no other loan program on the market that can compete. No down payment, reduced closing costs and competitive interest rates await those who are ready to buy and finance a home. This part of the original G.I. Bill of 1944. Yet some states take that benefit one step further and provide additional assistance to those who need or want it. What are some of these additional benefits? Not every state offers additional housing programs so you’ll need to check with the state housing or veteran’s agency where you live to see if there are some special programs you want to take advantage of.
For example, in Texas, the Texas Veteran’s Land Board offers two loan programs. One allows a veteran to buy raw land with only 5 percent down with below market rates. Texas voters also authorized bond issuances to subsidize lower interest rates on a traditional mortgage. The California Department of Veterans Affairs provides below market rates through its CalVet program.
Illinois offers the G-I Loan for Heroes, designed to offer below market financing, closing cost assistance as well as loan counseling. There are two programs under the G-I Loan for Heroes banner, one for veterans and another for active duty. New York offers a similar offering for veterans called the New York State Homes for Veterans Program with rates 0.5% lower than market along with help for closing costs.
Most of these programs follow the same format, with subsidized interest rates along with closing cost assistance. When mortgage rates are subsidized, sometimes the rates aren’t as competitive compared to what is available with a standard VA home loan. However, it is well worth the time to check with your state agency to see what additional benefits are available.