Closing Cost Assistance For Veterans: Understanding the $5000 Iowa Military Homeownership Assistance Program

Young military family sitting on couch

Every November, we take time to honor the many servicemen and women who’ve worn the uniform of our armed forces. As veterans, they’ve earned our gratitude and respect. Their service has also earned them access to various veterans’ benefits, which include home loan guarantees from the Department of Veterans Affairs (VA). This $5,000 grant for a down payment and closing cost assistance is available to eligible service members and veterans.

The $5000 Military Homeownership Assistance Program comes with no strings attached, and any eligible homebuyer should take advantage of it regardless of circumstance. Although the Veterans Affairs loan program requires no down payment, if a Veteran uses the MHOA grant funds towards the down payment it can help reduce the VA Funding Fee (if you are required to pay this fee). This has little impact on a monthly payment and it has a great impact on the amount of equity a Veteran has in their home.

Benefits of the Military Homeownership Assistance Program for those buying in Iowa

As we mentioned, there truly are no strings attached to the $5,000 MHOA Grant. Below are some details relating to the program:

    • The MHOA grant does not create a secondary lien on the property, there is no repayment when the property is sold, and there’s no minimum time you’re required to own the home.
    • There is no fee for the program. The use of the MHOA grant will cause no increase in closing costs when you work with RMN.
    • The program has no effect on interest rates. When you work with RMN, your interest rate and mortgage loan terms will never be affected by the MHOA grant.
    • The MHOA grant can be paired with any loan program, including the VA loan program.
    • The $5,000 grant can be applied towards any combination of down payment, closing costs, and prepaid expenses.

MHOA Qualification Requirements

You must meet one of the following service requirements to qualify for the grant:

  • Have served 90 days active duty between August 2, 1990, and April 6, 1991, or September 11, 2001, to present. Active duty need not be consecutive; it may be cumulative. Inactive Duty Training, Annual Training, and Active Duty for Training may not count toward active duty; or
  • A federal status injured service person having served in active duty August 2, 1990, and April 6, 1991, or September 11, 2001, to present; or
  • A surviving spouse of said eligible service person, all who have had a discharge other than dishonorable.

American Soldier Hugging Her Son VA Loan

About the VA funding fee

What is the VA funding fee?

It is a one-time fee paid by the veteran, service member, or surviving spouse for a VA-backed loan or direct VA loan.

Will I have to pay the VA funding fee?

When you buy or refinance a home with a VA loan, you may be required to pay the VA funding fee unless certain requirements are met.

There is no VA funding fee if any of the following applies to you.

You’re:

  • Receiving VA disability compensation, or
  • You are eligible for VA compensation for disability caused by service, but you receive retirement or active-duty pay instead, or
  • In the case of a spouse who dies in service, has a service-connected disability, or is totally disabled and receives Dependency and Indemnity Compensation (DIC), or
  • Military service members who have received the Purple Heart before or after the loan closing date

How will I pay this fee?

This fee is due when your VA loan closes.

Payments can be made in either of the following ways:

  • The funding fee can be included in your loan and repaid over time, or
  • At closing, pay the full amount

How much will I pay?

In addition to your loan amount, there are other factors to consider.

You’ll pay a VA funding fee for all loans according to:

  • loan type – and –
  • amount of your loan

You may also be responsible for these fees depending on the loan type:

  • Whether this is your first VA loan, or not, and
  • The amount of your down payment

Other loan closing costs

Closing costs: who pays for what?

These closing costs are paid by the seller:

  • Real estate commissions
  • Fees charged by brokers
  • A termite report (unless your refinancing loan includes it)

You (the buyer) and the seller can negotiate who will pay the following costs:

  • VA funding fee
  • Loan origination fee
  • Loan funds or discount points for temporary “buydowns”
  • Fees for VA appraisals
  • Hazard (home owner’s) insurance
  • Property taxes
  • Title insurance
  • Recording fee

In the end, the VA loan program can be a big help to those who have sacrificed their country and want to achieve the dream of homeownership. If you or a buyer you know might be eligible for the MHOA grant, contact RMN today to make sure you don’t miss out on this excellent program or other mortgage loan programs!

Residential Mortgage Network lends only in the state of Iowa.

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