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VA loan with a 100% disability rating

Your rating unlocks some of the biggest savings in the VA program.

Updated September 2026 · By Joey Kubes, Retired USMC · NMLS #2459919

Short answerWith a VA disability rating you pay no VA funding fee, your tax-free disability pay counts as income, and in California a 100% rating can also cut your property taxes with the disabled veterans' exemption.

Your biggest advantages

  • No funding fee — waived for any veteran receiving VA disability compensation. On a $600,000 home that's $12,900 saved (first use).
  • Disability pay counts as income — it's tax-free and generally long-term, stable income, so lenders may gross it up.
  • California property tax exemption — up to $180,671 off your home's assessed value (or $271,009 for low-income households) in 2026. See how to file. New: starting with 2027–28 taxes, SB 296 raises it to 50% of your home's value (up to $1M), or 100% with household income of $83,474 or less.
  • Adapted housing grants — VA's Specially Adapted Housing (SAH) and Special Housing Adaptation (SHA) grants can help build or modify a home for certain disabilities.

What you'll need

  • Your VA award letter (benefit summary) showing your rating and monthly amount.
  • Your Certificate of Eligibility — it will show you're exempt from the funding fee.

Common questions

Do I pay the VA funding fee with a disability rating?

No. Veterans receiving VA disability compensation at any rating are exempt.

Is VA disability income counted for a mortgage?

Yes. It's reliable, tax-free income and lenders may gross it up when you qualify.

Does 100% disability lower property taxes in California?

Yes. In 2026 California's disabled veterans' exemption reduces your home's assessed value by up to $180,671 (basic) or $271,009 (low-income). Starting with 2027–28 taxes, the new SB 296 law exempts 50% of your home's value (up to $1M), or 100% if household income is $83,474 or less.

See your real numbers

Our free calculator uses 2026 pay tables, BAH by ZIP and VA residual income standards. About 2 minutes, no credit pull.

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Educational information only, not a commitment to lend or a loan approval. VA guidelines and lender requirements change; your eligibility and terms depend on your full application, credit, income and VA entitlement.