Vermont VA Loans for a Guard State With Town-Voted Tax Relief
See how the Vermont veterans exemption works, when your town can raise it from $10,000 to $40,000, how the homestead declaration and transfer tax hit your costs, and how Guard members qualify. No lender overlays.
Vermont has no active-duty base, so most VA buyers here are Guard members, retirees and veterans, and the disabled veteran tax break depends on how your town voted.
A Vermont VA loan is a home loan guaranteed by the U.S. Department of Veterans Affairs. With full entitlement it takes $0 down, has no monthly mortgage insurance, and has no VA minimum credit score. Vermont is a Guard state. Most buyers here drill with the Vermont National Guard, retired from service, or moved home after it. The veterans property tax exemption starts at $10,000 of value, and each town can vote to raise it. We are The JD.Mortgage Team at PRMG, a no-overlay VA lender. If another lender said no, that is usually where our work starts. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.
Last updated: October 6, 2026
Guidance reference: VA Pamphlet 26-7, Ch. 2, 3, 6, 8 and 13 (VA updated July 9, 2026); Ch. 4 (VA updated August 26, 2026); Ch. 7 (VA updated July 24, 2026); Ch. 10 (VA updated August 6, 2026); Ch. 11 (VA updated July 10, 2026); Ch. 12 (VA updated August 12, 2026); VA Circular 26-25-10 (December 1, 2025); VA Circular 26-19-22 (August 8, 2019); Ginnie Mae MBS Guide, Ch. 24 (effective September 14, 2026)
Vermont VA Loans: The Short Answer
A Vermont VA loan is a VA-guaranteed mortgage with no down payment on full entitlement, no monthly mortgage insurance, and no VA minimum credit score. The files that get stuck are usually stuck on lender rules, not VA rules. We underwrite to VA’s rules.
As of Q3 2026 (September 2026): VA’s chart for the money left over each month after your bills (VA calls this residual income) is $1,025 a month for a family of four in the Northeast on loans of $80,000 or more (VA Pamphlet 26-7, Ch. 4). VA uses 41% as a check point, not a limit, for how much of your monthly income goes to debt payments (your debt-to-income ratio). Above 41%, we take a closer look at your file. That step is not needed if your money left over is at least 20% above the chart. If it is not, your loan can still be approved when a supervisor signs a note that lists the strengths in your file. VA has no minimum credit score (VA Pamphlet 26-7, Ch. 4; 38 CFR 36.4340). The 2026 county loan limit is $832,750 in every Vermont county. Full entitlement (your full VA home loan benefit) removes the VA loan limit (VA.gov loan limits; FHFA 2026 limits). Funding fee (a one-time VA fee) on first use: 2.15% with less than 5% down. After first use, with less than 5% down: 3.3%. On an IRRRL (VA’s refinance to lower your rate): 0.5%. With VA disability compensation: $0 (VA.gov funding fee table, effective April 7, 2023).
What Is a Vermont VA Loan?
A Vermont VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs and made by a private lender. Because VA guarantees part of the loan, the lender can approve it with no down payment on full entitlement and no monthly mortgage insurance. It is the same federal program in every state. What changes in Vermont are the state’s tax rules, its insurance market, its county loan limits, and how closings work here, which is what the rest of this page covers.
Vermont VA Loan Rules and Veteran Tax Benefits
Vermont’s veterans exemption is in 32 V.S.A. Section 3802(11). It is short, but most summaries get parts of it wrong.
| Question | What the statute says |
|---|---|
| Who qualifies | A veteran, or the veteran’s spouse, widow, widower or child, receiving disability compensation for at least 50% disability, death compensation, DIC, or a disability pension |
| Base amount | $10,000 of appraisal value |
| Town option | Voters can raise it up to $40,000 of appraisal value at an annual or special town meeting |
| What is covered | The home owned and occupied as the established residence, not any part used for business or rental |
| Where to file | Vermont Office of Veterans Affairs, before May 1 |
Filing. You file a written application and a statement from VA showing the payment is being made. You file before May 1. If the exemption is based on a permanent disability, you file only in the first year. It then stays on the grand list until the property changes hands.
Here is where most explanations go wrong. They say Vermont veterans get $40,000. The statute sets $10,000. $40,000 is the most a town can vote. The exemption is also a cut to appraised value, not a cut to your bill. Your savings equal the exempt value times your tax rate. Ask the town clerk what your town adopted.
Homestead declaration. Every Vermont resident who owns and lives in a home must file a homestead declaration each year. For 2026 it was due April 15. A home not declared is taxed at the higher nonhomestead education rate, per the Department of Taxes. Miss it and your escrow goes up.
Now the clarifier. Vermont’s exemption turns on receiving VA compensation or pension, not on a discharge test written into this section. That is a state rule for the tax benefit only. VA home loan eligibility is set by VA and needs service other than dishonorable plus a Certificate of Eligibility. See our VA loans FAQ. A veteran rated 30% may get the VA loan with no funding fee and still not meet Vermont’s 50% line.
What it does to your approval: we qualify you on the escrowed payment. A town that voted $40,000 cuts the tax line more than one at $10,000. A lower tax line means a lower ratio and more residual income.
What a No-Overlay VA Lender Means in Vermont
An overlay is a lender rule added on top of VA’s. VA itself never set a minimum credit score, so any number you were quoted came from the lender. We lend to VA’s rules in Vermont, with no added score floor and no debt-to-income cap tighter than VA’s.
What we cannot change: the wait before you can refinance. VA sets this waiting period for a VA IRRRL (a refinance to a lower rate) and for a VA cash-out that pays off a VA loan. Ginnie Mae, the agency that backs the bonds VA loans are sold into, adds its own wait for loans that go into those bonds (Ginnie Mae MBS Guide, Ch. 24). Anyone who says they waive those is not telling you the whole story.
The part that decides most tough files is residual income. See the residual income chart and the math.
Not sure how Vermont’s veteran tax rules change your payment? We run the numbers with your real tax line before you make an offer.
Run My NumbersWhat a Vermont VA Loan Costs at Closing
There is no monthly mortgage insurance on a VA loan. The trade is a one-time funding fee, which you can roll into the loan.
| Loan type | Fee |
|---|---|
| First use, less than 5% down | 2.15% |
| First use, 5% to 9.99% down | 1.5% |
| First use, 10% or more down | 1.25% |
| After first use, less than 5% down | 3.3% |
| Cash-out refinance (first / later use) | 2.15% / 3.3% |
| IRRRL (streamline refinance) | 0.5% |
| Veteran receiving VA disability compensation | $0 (exempt) |
Source: VA.gov funding fee table, effective April 7, 2023. More on exemptions and refunds: VA funding fee guide. We do not publish rates on this page because rates change daily.
Seller Concessions: The 4% Rule Most People Get Wrong
VA separates two buckets. The seller can pay your normal closing costs with no cap. Separately, the seller can give concessions up to 4% of the reasonable value, and those concessions can pay off your debts, prepay taxes and insurance, or cover the funding fee (VA Pamphlet 26-7, Ch. 8).
On a Vermont contract, that difference matters. Paying off a car note at closing can lower your debt-to-income ratio and raise your residual income at the same time. The full 4% breakdown.
Vermont Military Markets and the 2026 Loan Limit
Every Vermont county has the same 2026 limit, $832,750, per the FHFA 2026 file. With full entitlement VA sets no cap. The limit matters when a prior VA loan is still open.
Vermont Air National Guard Base (South Burlington)
The 158th Fighter Wing flies from the Burlington airport. Full-time Guard members and technicians buy in South Burlington, Williston, Essex, Colchester and Winooski. Chittenden County has the tightest inventory in the state. Condos and townhomes are common entry points.
Camp Johnson and Ethan Allen Firing Range
Camp Johnson in Colchester is the Vermont Guard’s headquarters. The Ethan Allen Firing Range sits in Jericho and nearby towns. Soldiers here often look at Jericho, Underhill, Essex and Milton for more land. That brings wells, septic and private roads into play.
Rutland and southern Vermont
Rutland offers lower prices. Retirees and remote workers also look at Bennington and Brattleboro. Older housing is the rule, so repairs come up on VA appraisals.
White River Junction and the Upper Valley
The Upper Valley draws veterans who work in the area or use the VA medical center in White River Junction. Buyers compare Hartford, Norwich and towns across the river in New Hampshire. The state line changes the tax rules, so we run both sides.
Vermont towns are small and inventory is thin. A home near Burlington can draw many offers. That puts pressure on VA buyers to waive things they should keep, like inspections. We help you write a strong offer without giving up protections that matter on older rural homes.
Because Vermont has no active-duty base, most VA buyers are Guard members, veterans and retirees. That means civilian income, drill pay and retirement income often show up together in one file.
Chittenden County holds most of the Guard jobs.
We check the town before you offer.
From Application to Keys in Vermont
Apply
A short online start with no SSN and no credit pull to begin. We request your COE.
Build the approval
We map income, entitlement, and residual income. If the file needs a manual review, we structure it instead of declining it.
Write the offer
Your pre-approval has already been reviewed, and the seller-concession request goes into the contract.
Appraisal
We order the appraisal in VA’s online system. In most cases, VA then picks the appraiser from its own list. If the value may come in low, the Tidewater step gives two business days to send in recent sales first. How the VA appraisal works.
Close
Sign, fund, and move in. VA expects you to occupy within a reasonable time, usually 60 days.
Who Qualifies for a Vermont VA Loan
| Requirement | What it means |
|---|---|
| Service | Qualifying active duty, veteran, National Guard or Reserve service, or an eligible surviving spouse. Exact time-in-service rules: VA.gov eligibility. |
| Discharge | Not dishonorable, for most Veterans. If you qualify only through 6 years in the Guard or Reserve, it must be honorable. These are VA rules, not state tax rules. |
| Certificate of Eligibility | Proves your entitlement. We request it for you in most cases. |
| Occupancy | You plan to live in the home, usually within 60 days of closing. A spouse can satisfy occupancy during a deployment. |
| Credit | No VA minimum score. Past events are reviewed in context. |
| Income | Stable and likely to continue. VA also checks residual income against the regional table. |
Where Vermont VA Buyers Lose Money
Property transfer tax. Vermont taxes the transfer. For a home you will live in as your principal residence, the rate is 0.5% on the first $200,000 and 1.25% above it, plus a 0.22% clean water surcharge, per the Department of Taxes. Non-principal homes pay much more. Your VA purchase is a principal residence, so file it that way.
Example: transfer tax on a $400,000 principal residence
- 0.5% of first $200,000: $1,000
- 1.25% of next $200,000: $2,500
- 0.22% clean water surcharge: $880
- Total in this example: $4,380
Who pays is set by the contract, so read it. Seller help can cover your share within the VA concession rules.
The homestead declaration. Miss it and your home is taxed at the nonhomestead education rate. That can raise the escrow we qualified you on.
Winter costs. Oil, propane, wood, snow removal and roof upkeep are real. Northeast residual income tables help cover this, but budget for it too.
Slow court foreclosure. Vermont forecloses through the courts. Under strict foreclosure the owner usually gets six months after the decree to redeem, per 12 V.S.A. Section 4941. That protects you, but it is not a plan. Size the payment to real income.
Nonprincipal rates. If you buy a second home or keep a Vermont home after you move, the transfer tax and education tax rates go up. A VA loan requires that you plan to live in the home, so file the transfer return and the homestead declaration as a principal residence.
Heating fuel prices also swing. Budget with room to spare.
Vermont Property Types That Need Extra Care
VA’s minimum property requirements ask for safe, sound and sanitary homes. Vermont’s land and climate raise the same items again and again.
Acreage. Many Vermont homes sit on large lots. VA has no limit on how many acres you can buy. You can buy a farm home you live in, but VA does not make farm business loans. The appraisal goes most smoothly when similar homes with land nearby have sold recently.
Wells and septic. Most rural homes use private wells and septic. Plan for water tests and time.
Heat. The heat source must keep the home safe all winter. A wood stove as the only heat can raise questions. Old chimneys and oil tanks get noted.
Roofs and snow. Roofs must be sound. Snow load and ice dams damage older homes.
Private roads and seasonal access. Class 4 town roads and private roads are common. VA wants year-round access and a plan for upkeep.
Manufactured homes. They must be on a permanent foundation and treated as real property. The VA appraisal checks this.
Repairs in the contract. If the appraisal calls for repairs, the contract should say who fixes what and by when. The home must meet VA’s basic safety and condition rules before VA backs the loan. Repairs can be done before closing, or the lender may hold money aside so the work is done after closing.
Mud season can close some back roads in spring. Plan inspections and the appraisal with that in mind.
Old farmhouses often need work.
Common Vermont VA Scenarios We Structure
158th Fighter Wing technician buying in Essex
Example: a full-time Guard technician earns a steady salary and has drill history. We use the income with a history. If the system result is not clean, we use manual underwriting and residual income.
50% rated veteran in a town that voted $40,000
Example: a veteran rated 50% buys in a town that voted the full $40,000. At an example combined rate of 2%, that is $800 a year off the bill, about $67 a month. In a $10,000 town it is $200 a year. The veteran also pays no funding fee, because VA exempts veterans receiving disability compensation.
Example: town vote effect
- $10,000 exempt x 2% example rate: $200 a year
- $40,000 exempt x 2% example rate: $800 a year
- Monthly difference: about $50
Retiree returning home to Rutland
Example: a retiree uses military retirement and VA compensation to buy an older home. We plan the transfer tax, the homestead declaration, and appraisal repairs up front.
Second VA loan with the first home rented out
Example: $50,000 of entitlement is in use. 25% of $832,750 is $208,187.50. Remaining is $158,187.50. Four times that is $632,750 with $0 down.
Each example uses made-up numbers to show the math. Your real file uses your income, your town’s voted exemption, and your real entitlement. We confirm the town figure with the clerk or listers before we count it.
The Vermont exemption and the VA funding fee exemption are separate. A veteran can get one, both, or neither, depending on the rating.
Have orders, a rating letter, or a file another lender turned down in Vermont? Send it. We tell you what VA’s rules actually allow.
Ask Us to ReviewHow a VA Loan Compares in Vermont
| Feature | VA | Conventional | FHA |
|---|---|---|---|
| Down payment | $0 with full entitlement | 3% to 20% | 3.5% at 580+ |
| Monthly mortgage insurance | None | PMI under 20% down | Annual MIP |
| Minimum credit score | None set by VA | None on DU; 620 manual | 500 with 10% down; 580 with 3.5% |
| Upfront fee | Funding fee (waived with disability compensation) | None | Upfront MIP |
| Debt-to-income | 41% benchmark plus residual income | Up to 50% on DU | Set by automated or manual rules |
Sources: Fannie Mae Selling Guide B3-5.1-01; HUD Handbook 4000.1; VA Pamphlet 26-7. For most eligible Vermont buyers, VA wins on payment. The exceptions are covered in the FAQ below.
Vermont VA Loan Myths, Corrected
❌ Myth: “Vermont disabled veterans get $40,000 off their property taxes.”
✅ Fact: The statute sets $10,000 of appraisal value. Towns can vote to raise it up to $40,000. Either way it is value exempted, not dollars off the bill.
❌ Myth: “Any VA disability rating gets the Vermont exemption.”
✅ Fact: The statute requires disability compensation for at least 50% disability, or death compensation, DIC, or a disability pension. A lower rating still gets you the VA funding fee exemption, but not this state exemption.
❌ Myth: “You need a 620 credit score for a VA loan.”
✅ Fact: VA sets no minimum score. The 620 you heard is a lender overlay.
❌ Myth: “VA loans take forever to close.”
✅ Fact: A prepared VA file closes on a normal contract timeline. Slow closings come from slow lenders.
Vermont VA Loan Frequently Asked Questions
What is the VA loan limit in Vermont for 2026?
There is no VA loan limit with full entitlement. When part of your entitlement is in use, the 2026 limit is $832,750 in every Vermont county. Your zero-down ceiling is then four times your remaining entitlement, based on 25% of that limit.
How much is the Vermont disabled veteran property tax exemption?
It is $10,000 of appraisal value under the statute. Towns can vote to raise it up to $40,000. You qualify if you receive VA compensation for at least 50% disability, or certain death or pension benefits. It covers your home, not any part used for business or rental.
How do I apply for the Vermont veterans exemption?
File with the Vermont Office of Veterans Affairs before May 1. Include a written application and a statement from VA showing you receive compensation or pension. If your disability is permanent, you file only once, and the exemption stays until the property is sold.
Does my town offer more than $10,000 for veterans in Vermont?
It depends on your town’s vote. The statute lets voters raise the exemption up to $40,000 of appraisal value at an annual or special town meeting. Ask the town clerk or listers what your town adopted. We use that number when we figure your escrow.
Can Vermont National Guard members get a VA loan?
Yes, once you meet VA service rules and get a Certificate of Eligibility. Guard members often qualify through six years of service or qualifying federal active duty. We pull the certificate and read your history before we talk numbers. Traditional Guard members often use drill pay plus a civilian job.
What is the Vermont property transfer tax on a VA purchase?
For a principal residence it is 0.5% on the first $200,000 and 1.25% above that, plus a 0.22% clean water surcharge. On a $400,000 home that comes to $4,380 in this example. The contract decides who pays. The buyer and seller can split it by contract.
Do I need to file a Vermont homestead declaration after buying?
Yes. Every Vermont resident who owns and lives in a home must file each year. For 2026 it was due April 15. If you do not file, the home is taxed at the higher nonhomestead education rate, which raises your escrow.
Can I use a VA loan on rural land in Vermont?
Yes, if you will live in the home. VA has no acre limit. VA does not make farm business loans, but a farm home you live in can qualify. The loan covers only the home’s value as a place to live. The home needs safe heat, water, septic and year-round access. We check these before you pay for an appraisal. Class 4 roads can be a problem.
Do I need a down payment for a VA loan in Vermont?
Usually not, with full entitlement (your full VA benefit). You can buy a Vermont home with $0 down at the price your income supports, if it appraises at or above that price. If it appraises lower, you pay the gap in cash from your own money. If part of your benefit is tied up, many lenders cap $0 down at four times what VA can still back. That cap is below the county limit. Above the cap, a lender may ask for money down.
What is residual income on a VA loan?
Residual income is the money left each month after the house payment, taxes, insurance, debts, and a maintenance estimate. VA compares it to a table by region and family size. It is the number that decides most tough files.
Can I get a VA loan after bankruptcy?
Yes. VA generally looks for 2 years after a Chapter 7 discharge, and a Chapter 13 can work after 12 months of on-time plan payments with trustee approval. The reason and your recovery matter more than the date alone.
Does VA allow a VA loan on a condo?
Yes, if the condo project is on VA’s approved list. If it is not, the project can often be submitted for approval. We check the project before you write an offer.
Can I refinance a VA loan later?
Yes. An IRRRL is VA’s streamline refinance of an existing VA loan, and a VA cash-out refinance can pull equity or replace a non-VA loan. Both carry seasoning rules set by VA and Ginnie Mae.
Related Vermont Resources
About the Author
J.D. Peck is an Area Manager and Mortgage Loan Originator (NMLS #314883) with the JD.Mortgage Team at Paramount Residential Mortgage Group, Inc. (NMLS #75243), based in Colorado Springs. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.
Last updated: September 24, 2026. VA loan rules sourced from VA Pamphlet 26-7, 38 CFR, VA.gov, and the Ginnie Mae MBS Guide, which govern over any other source. Loan limits from FHFA 2026 values. Vermont tax and property facts from official Vermont state sources linked above.
Get Your Vermont VA Numbers Before You Shop
We check your entitlement, residual income, and the real tax and insurance line for your county, then show you the payment and the approval path before you write an offer.
More for Vermont: Vermont HELOC · Vermont self-employed mortgage
Source: JD.Mortgage Team at PRMG, Vermont VA Loans: No Overlays, No Minimum Credit Score, updated September 2026, https://jd.mortgage/va-loans-vermont/
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