I’ve Paid For This Twice Already…

Frugal living and debt reduction tips for a better financial future. This is one family’s story.

January 21st, 2014

Cost Effective Housing Options For Veterans

Living frugally is dependent on the way consumers are able to extract benefits from economic situations. Veterans are dependent on federal incentives to manage their fiscal routines. However, specific finance options are also available for veterans and they can be used for financial security.

Two financial authorities are particularly relevant to veterans: Veterans Administration (VA) and Federal Housing Administration (FHA). A recent reform paper on Housing Finance System analyzes the market since the recession and also looks at how legislative reforms have affected investors. The report highlights the role of financing through the Department of Veteran Affairs and mortgage backed securities from the FHA.

A congressional report on Veterans and Homelessness indicates that property acquisition within the community is a tough task and there is a need for better usage of incentives to manage financial affairs.

Veterans should therefore keep tabs on schemes and grants such as the 2014 FHA grant program, which was recently announced. Through this program, veterans can apply for government based incentives with regard to property ownership.

Two important incentives within the program are the Returning Veterans Grant Program and the Veterans Purchase Grant Program. Both grants are in excess of $7,000 and can serve as a viable financing option. The grant program is applicable to both serving and qualified veterans. The only thing to be checked is the income guideline, which is used as a yardstick to determine the amount of the grant.

With multiple options available for home buying and home loan options for veterans, there is a need for streamlining the incentives. The comparison should be made with respect to individual financial conditions and the kind of incentive that would be most rewarding.

Comparison of VA and FHA

Advocates of sustainable living is utilizing the best finance options. While both the VA and FHA facilitate property ownership, there is a need to make a cost benefit analysis.

The first thing to understand is that interest rates have been at historic lows in the last couple of years. This means that the market is conducive for buying, and both FHA and VA are able to provide mortgages/loans for veterans at lesser rate than general institutions. However, VA has a higher benefit rate, a fact highlighted by Lowvarates.com.

Another point is that VA loans need no down payment as opposed to FHA, where it is mandatory. Furthermore, the loan approval procedure is far less taxing owing to its specific nature.

Another factor is that VA loans are distributed through private entities, making the process competitive and cost friendly. Private entities would offer even further low rates. With low interest rates, benefits of VA are compounded greatly.

This is owing to the fact that VA is reserved for veterans and there are options to offer lesser rates than even FHA. The FHA, while being extensive, has to cater to other communities within the U.S. as well.

It is still true that home ownership is a tough ask within today’s economy. However, using appropriate routes such as VA programs, the process can be made easier and the fiscal situation of veterans can improve over the years.

This is a guest post by Katherine! Kat is an avid finance reader and aspiring blogger. Katherine’s usual writing topics are on her own personal finances and you can read more of her post on Veterans at Military Bases Blog!

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