If you have a 100 percent VA disability rating and you are thinking about buying a house in Nebraska, you are in a stronger position than most of what you will read online suggests. The national articles cover the loan and stop there. The part they skip is the Nebraska part, and in this state it is worth real money every single year you own the home. Here is the whole picture, from a Marine veteran who works these purchases in and around Lincoln.
The loan side: your rating makes a strong benefit stronger
A 100 percent rating changes the VA loan itself in two concrete ways.
The funding fee disappears. Veterans receiving VA disability compensation are exempt from the VA funding fee. On a $300,000 first-use purchase with nothing down, that is 2.15 percent, or about $6,450, that you simply do not pay. On a second use it would have been 3.3 percent, so the exemption is worth even more to a veteran buying again. Combined with no down payment and no mortgage insurance, this is about as inexpensive as it is possible for a mortgage to be.
Your disability compensation counts as income. Lenders treat VA disability pay as stable, qualifying income, and because it is not taxed, many underwriters effectively count it as more than its face value when they compare it against your debts. It also never expires and does not depend on an employer. Plenty of veterans qualify comfortably on disability income alone, or on disability income plus a working spouse.
The Nebraska part: the homestead exemption
Nebraska runs a homestead exemption program that can remove some or all of the taxable value of your primary residence, and there is a category built specifically for veterans with a total service-connected disability. It is called Category 4V, and it sits in Neb. Rev. Stat. 77-3506. This is the part the national articles skip, and in Lancaster County it is worth more over a decade of ownership than the funding fee waiver.
Two things make Category 4V different from every income-tested category in the program, and both are worth saying plainly:
There is no income limit and no home value cap. Categories 1, 2, 3 and 6 are means-tested on a sliding scale and are also capped against the county average home value. Category 4V is not. The Nebraska Department of Revenue puts it directly: there are no income and homestead value limits for categories 4V, 4S, 5 and 7. A qualifying veteran gets 100 percent of the exempt amount regardless of what they earn or what the house is worth.
You do not have to be rated 100 percent. Category 4V covers two groups: veterans with a 100 percent service-connected permanent disability, and veterans with a lower rating who hold a 100 percent Individual Unemployability rating. Plenty of IU veterans assume this benefit is not for them. It is. In either case the effective date of the rating has to be on or before January 1 of the year you apply.
The dates that actually decide it
This is where a purchase goes right or wrong, because two different clocks run at once.
Own and occupy from January 1 through August 15. A homestead is your residence plus the land around it, not exceeding one acre, and you have to be the owner of record living there across that whole window. Close after January 1 and you are generally looking at the following year for the exemption on that house.
File after February 1 and on or before June 30. You file Form 458 with your county assessor, not with the state and not with the VA. Miss June 30 and the county board can extend you to July 20 if you ask in writing, but that is a favor, not a right, and it is not granted two years running. Late filing beyond that is governed by Neb. Rev. Stat. 77-3512 and needs a specific qualifying reason.
Category 4V does not refile every year. This surprises people who have read the general homestead instructions. Categories 1, 2, 3 and 6 file annually. Category 4V files Form 458 with VA certification of disability in the first year, and then only in years ending in 0 or 5, or whenever status changes. That five year gap is called the exemption period.
If you buy a different house mid-year, file Form 458T
This is the one I most often have to correct, and getting it wrong costs a full year of taxes. If you already filed on time for your current homestead and you close on a new one before August 15, you do not simply reapply next February. You file an Application for Transfer, Form 458T, with the county assessor in the county where the new residence is located, on or before August 15. If the assessor sends you a Form 458R notice of rejection, you have 30 days from receiving it to file the 458T.
Move-up buyers and veterans relocating between Lancaster, Cass and Otoe County are exactly who this catches. It is the reason I ask about homestead status before we write an offer with an August closing date, rather than after.
The rules and the dollar thresholds are set by the legislature and do change, so treat the Nebraska Department of Revenue homestead page and your county assessor as the final word on your situation. The Nebraska Homestead Helpline is 888-475-5101.
What the purchase itself looks like
The transaction runs like any VA purchase, with the fee waiver making the cash-to-close smaller. You will still want earnest money in the bank, a few hundred dollars each for the appraisal and inspection, and either cash or a seller credit for closing costs. The details of all of that, including the funding fee schedule and the Veterans United versus local lender question, are on the VA loan costs page.
Houses still have to meet the VA’s minimum property requirements, which protect you from buying something unsafe or unsound. With a 100 percent rating there is no extra property hurdle and no special process sellers should worry about. Your offer looks like any other VA offer, and a prepared agent presents it that way.
Where I fit
I am a Marine veteran and VA purchases are a core part of my work, not a sideline. For buyers with a 100 percent rating the job is making sure every benefit you have earned actually lands: the fee waiver applied correctly on the loan estimate, the offer written so the appraisal and property requirements do not surprise anyone, and the homestead exemption filed with the assessor after closing instead of forgotten. None of that is complicated, but each piece is missable, and missing them costs real money. How I work with veterans generally is on the veterans page.
Questions people ask
Can I buy a house with 100 percent VA disability in Nebraska?
Yes, and usually on excellent terms. VA disability compensation counts as stable qualifying income for a mortgage, a 100 percent rating exempts you from the VA funding fee, and the VA loan itself requires no down payment and no mortgage insurance. Many veterans qualify on disability income alone. After closing, Nebraska’s homestead exemption can also remove some or all of the property tax on your primary residence.
Does Nebraska have a property tax exemption for 100 percent disabled veterans?
Yes. It is called Category 4V, under Neb. Rev. Stat. 77-3506, and it covers veterans with a 100 percent service-connected permanent disability as well as veterans with a lower rating who hold a 100 percent Individual Unemployability rating. Unlike the age and income based categories, Category 4V has no income limit and no home value cap, so it can remove 100 percent of the exempt amount regardless of earnings or house price. You file Form 458 with your county assessor after February 1 and on or before June 30, and you must own and occupy the home from January 1 through August 15.
Do 100 percent disabled veterans pay the VA funding fee?
No. Veterans receiving VA disability compensation are exempt from the funding fee on every use of the benefit, first purchase or fifth. On a $300,000 no-down first purchase that waiver is worth about $6,450, and more on any later use, since the second-use fee is higher. The exemption should appear on your loan estimate automatically, but it is worth confirming that the lender has your status on file.
Does VA disability income count for a mortgage?
Yes. Lenders treat VA disability compensation as stable, long-term qualifying income. Because it is not taxed, underwriters comparing it against your monthly debts often credit it at more than its face amount, which strengthens your application. It does not depend on employment and does not expire, which is exactly the kind of income mortgage underwriting favors.
Is the Nebraska homestead exemption automatic after I buy?
No, and this is the step veterans most often miss. You must file Form 458 with the county assessor, generally between early February and June 30, with VA documentation of your disability status, and file again if you move to a new primary residence. If you close on a house outside that window, contact the assessor’s office right away about the current year rather than waiting. The rules are set by the legislature and can change, so confirm current details with the assessor or the Department of Revenue.
Do I have to reapply for the Nebraska homestead exemption every year?
Not under Category 4V. Categories 1, 2, 3 and 6 file Form 458 annually. A Category 4V veteran files Form 458 with VA certification of disability in the first year of application, then only in years ending in 0 or 5, or any year their status changes. The gap between required filings is called the exemption period. Everything still has to be filed with the county assessor after February 1 and on or before June 30 in the years it is due.
What happens to my homestead exemption if I buy a different house during the year?
You file an Application for Transfer, Form 458T, rather than starting over. If you filed on time for your original homestead and you become the owner of a new one before August 15, the Form 458T goes to the county assessor in the county where the new residence is located, on or before August 15. If you receive a Form 458R notice of rejection, the 458T is due within 30 days of receiving it. This is the step most often missed when a veteran moves mid-year, and missing it costs a full year of the exemption.