Retiring from the military in Hampton Roads? Buy the house you are keeping, in the right order.
Every PCS purchase came with an end date. This one does not. When you retire or separate here, BAH stops, a VA rating may start, Virginia now exempts up to $40,000 a year of military retirement pay, and a 100 percent permanent and total rating can take your real estate tax bill to zero. The order you do things in decides how much of that you keep. I am John King, a Navy veteran and REALTOR® with Berkshire Hathaway HomeServices RW Towne Realty, and 189 of the 428 MLS transactions in my record were VA-financed. This is the conversation I have with every service member who has decided to stay.
A service member retiring or separating in Hampton Roads should sequence the home purchase around three benefits. First, the VA funding fee is waived for veterans receiving VA disability compensation, for those eligible for compensation but receiving retirement pay instead, and for service members who have a proposed or memorandum rating from a pre-discharge claim before the loan closes; a rating with an effective date before closing can also bring a refund later. Filing the disability claim 180 to 90 days before separation, through Benefits Delivery at Discharge, is what makes the waiver possible at closing. Second, Virginia lets military retirees of any age subtract up to $40,000 of military retirement pay from state taxable income each year from 2025 on. Third, a veteran rated 100 percent service-connected, permanent and total is exempt from real estate tax on the home they live in, with the land under it up to one acre (more where the locality allows), under Virginia Code § 58.1-3219.5, and a surviving spouse who does not remarry keeps the exemption. Budget on retired pay, VA compensation and civilian income rather than BAH. With full entitlement there is no VA loan limit; if a first VA loan is still open on a home you are keeping as a rental, remaining entitlement may still cover the next purchase. Written and kept current by John King, U.S. Navy veteran and REALTOR® with Berkshire Hathaway HomeServices RW Towne Realty, Virginia license 0225211050, 441 closings across Hampton Roads since 2014, 189 of 428 MLS transactions VA-financed, 5.0 stars on 117 Google reviews. Call or text (757) 270-3994.
Last reviewed October 16, 2026 · Funding fee: VA.gov funding fee and closing costs page · Virginia: Code § 58.1-322.02 (military benefits subtraction) and § 58.1-3219.5 (disabled veteran real property exemption) · BDD window: VA.gov pre-discharge claim page · Medians: REIN MLS / Redfin, 2026 · Closing record: REIN MLS, June 2014 – September 2026
Retiring or separating in Hampton Roads?
Get your retirement home timeline
Tell John your separation date and where you want to land. He'll call within one business day to map your VA rating, entitlement and the current house onto a closing date that keeps the most money in your pocket.
- ✓A U.S. Navy veteran REALTOR®
- ✓189 of John’s 428 MLS transactions were VA-financed (44.2%)
- ✓Funding fee timing, entitlement reuse and Virginia tax rules, in plain terms
See the full buyer plan → · or call/text (757) 270-3994
What changes when the uniform comes off
The house you buy at retirement is usually the one you keep the longest, and it is bought in the one year your income changes shape. These are the five things I walk through before we look at a single listing.
BAH stops. The budget has to be rebuilt.
Every earlier purchase was sized against housing allowance. After retirement the lender is looking at retired pay, VA disability compensation if you have a rating, a spouse’s income and any civilian job, each with its own paperwork. A civilian offer letter, a retirement pay statement and a VA award letter are what turn “I should qualify” into an approval. We build the monthly payment ceiling from those numbers, not from the BAH you had last year.
The funding fee can disappear, if the rating comes first.
On a zero-down VA loan the funding fee is 2.15 percent on first use and 3.3 percent after first use. On a $415,000 loan at 3.3 percent that is $13,695. Veterans receiving VA disability compensation pay none of it, and a service member with a proposed or memorandum rating from a pre-discharge claim before closing is exempt too. That is why the disability claim timing is part of the home plan, not a separate errand. Detail in the funding fee section.
Virginia stopped taxing most military retirement pay.
From tax year 2025 on, Virginia lets you subtract up to $40,000 a year of military retirement pay from state taxable income, with no age requirement, and Survivor Benefit Plan payments to a surviving spouse qualify too. VA disability compensation is not taxable income in the first place. For a lot of retirees that changes what a comfortable payment looks like. Confirm your own numbers with a tax professional.
A 100 percent P&T rating can zero out the tax bill on your home.
Virginia exempts from real estate tax the home a veteran rated 100 percent service-connected, permanent and total lives in as a principal residence, along with the land under it up to one acre, or more where the locality’s own rules allow. A surviving spouse keeps it if the veteran died on or after January 1, 2011 and the spouse does not remarry, even after moving to a different home. In practice it means the house you can afford is bigger than the payment calculator says, because the tax line on the payment goes to zero. You apply with the city or county after you own the home.
Your entitlement may be tied up in the last house.
If you sold the last VA-financed home and paid the loan off, your entitlement can be restored. If you are keeping it as a rental, the loan is still charged against your entitlement, but remaining entitlement can often cover a second VA loan, with a down payment making up any gap. A one-time restoration is also available if the old VA loan is paid off and you keep the property. Which one applies decides whether this purchase is zero down. My full vs partial entitlement guide walks through the math.
This time, buy for the next twenty years.
A PCS purchase is judged partly on resale. A retirement purchase is judged on how you will live in it: the commute to a civilian job instead of a pier, distance to the VA clinic you will actually use, base access for the commissary and exchange, a first-floor bedroom if that matters to you, and flood zone and insurance cost on a home you will hold through many hurricane seasons. Those decide the short list.
The VA funding fee at retirement: who pays and who does not
This is the single biggest dollar decision in the timeline, and the easiest one to miss by a few weeks.
If you pay it
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% or more | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
Many retirees have used the benefit before. On a zero-down $415,000 loan, the Virginia Beach median, that is $13,695 at 3.3 percent, often rolled into the loan and paid with interest for thirty years.
You do not pay it if
- You receive VA compensation for a service-connected disability.
- You are eligible for VA compensation but receive retirement or active-duty pay instead.
- You are still serving and, before closing, received a proposed or memorandum rating saying you are eligible for compensation based on a pre-discharge claim.
- You are on active duty and show, on or before closing, that you received a Purple Heart.
- You receive Dependency and Indemnity Compensation as the surviving spouse of a veteran.
If you pay the fee and are later awarded compensation with an effective date before your closing date, you may be eligible for a refund through the VA regional loan center. A proposed or memorandum rating received after closing does not qualify for a refund, which is why the claim goes in early. More in the funding fee guide.
The practical rule: file the disability claim through Benefits Delivery at Discharge, 180 to 90 days before your separation date, and tell your lender the moment a proposed rating arrives. When that letter exists before closing, the fee comes off the closing statement.
The Virginia tax picture for military retirees
Two state rules change the math on a retirement purchase here. Both are in the Virginia Code, linked in the sources below.
| Benefit | Who qualifies | What it does |
|---|---|---|
| Military benefits subtraction Code § 58.1-322.02 | Military retirees of any age (2024 on); Survivor Benefit Plan payments to a surviving spouse also count | Subtracts military retirement pay from Virginia taxable income: up to $30,000 for 2024 and up to $40,000 a year from 2025 on |
| Disabled veteran real property exemption Code § 58.1-3219.5 | Veteran rated 100% service-connected, permanent and total; surviving spouse of such a veteran who died on or after January 1, 2011 and has not remarried | Exempts the principal residence and the land under it up to one acre (more where the locality allows) from local real estate tax; the spouse keeps it after moving to a different principal residence |
| VA disability compensation | Veterans with a service-connected rating | Not taxable income, and counted by VA lenders as income when you qualify for the loan |
The honest read: for a 100 percent P&T veteran, two homes at the same price can carry very different monthly payments depending on whether the exemption is in place, because the tax line drops out. I run the payment both ways so you know which number to shop on, and you file the exemption with the city’s Commissioner of the Revenue or real estate assessor once you own the home. This page is general information, not tax advice.
The retirement purchase, in the order that keeps the money
Counted back from your separation date. Retirement dates move; the sequence does not.
Decide where you will land
Civilian job location, the VA clinic you will use, base access, and whether the current home stays, sells or rents. Everything else is sized from this.
12 months outCheck your entitlement
Pull the Certificate of Eligibility. If a VA loan is still open on a home you are keeping, we work out the remaining entitlement and whether any down payment is needed.
9–12 months outFile the disability claim
Benefits Delivery at Discharge accepts claims 180 to 90 days before you leave active duty. A proposed rating before closing is what waives the funding fee.
180–90 days outFull approval on the new income
Retirement pay estimate, VA award or proposed rating, civilian offer letter, spouse income. One lender, one credit pull, a real number.
90–60 days outShop on the real payment
Payment ceiling built on post-retirement income, with taxes run both ways if a 100 percent P&T rating is likely. Showings sequenced, three to five homes a trip.
60–30 days outClose, then file the exemption
Inspection, wood-destroying insect report, VA appraisal, clear to close in 30 to 45 days. Then apply for the real estate tax exemption with the city if you qualify.
Around separationThe full buyer checklist is the A.N.C.H.O.R. Plan. If you are selling the current home in the same window, the sell-and-buy guide covers bridging the two closings, and the military landlord guide covers keeping it as a rental.
Where to land: what retirees weigh that PCS buyers do not
These are the 2026 city medians, with the guide for each city. The right neighborhood inside them depends on the job, the clinic and how you want to live; every guide has current medians, days on market, commute notes and a mortgage calculator.
| City | Median price | Guide |
|---|---|---|
| Norfolk | $330,000 | Norfolk neighborhoods & market |
| Virginia Beach | $415,000 | Virginia Beach neighborhoods & market |
| Chesapeake | $418,000 | Chesapeake neighborhoods & market |
VA health care locations on the Southside
The Hampton VA Medical Center is the main hospital for the region, on the Peninsula. On the Southside the Hampton VA system runs clinics in Virginia Beach (Clearfield Avenue), Chesapeake (South Military Highway, Knells Ridge Boulevard and Chesapeake Square) and Portsmouth (Crawford Street). If you will be a regular patient, drive time to your clinic belongs on the short list next to the commute. Check current locations and services at VA.gov.
The house itself
- Flood zone and insurance: a twenty-year hold sees a lot of storms; know the zone and the premium before you offer. My waterfront guide covers it in detail.
- Layout for the long run: a first-floor bedroom, fewer stairs, a garage you will actually use.
- Age of the big systems: roof, HVAC and water heater on a home you plan to keep, not flip in three years.
- Base access: commissary, exchange and clinic trips are part of the weekly drive.
Every neighborhood I work: all Hampton Roads neighborhood guides. Base-by-base commute rankings: Naval Station Norfolk, NAS Oceana, JEB Little Creek.
Why a Navy veteran should be on your side of this one
Every figure below comes from my own REIN MLS record, published in full in the 13-year sales study.
I served five years as a Machinist Mate and made the same transition you are making. I have been licensed since 2013, and nearly half of the transactions in my record were VA-financed, so the entitlement questions, the funding fee timing and the rental-or-sell decision on the old house are ones I work through regularly. The case studies show how that played out for real clients, with their reviews linked.
Questions retiring and separating buyers ask
Do I still pay the VA funding fee if I am about to retire?
Not if you are receiving VA disability compensation, are eligible for it but receiving retirement pay instead, or, while still serving, have a proposed or memorandum rating from a pre-discharge claim before the loan closes. Otherwise the fee on a zero-down purchase is 2.15 percent on first use and 3.3 percent after first use. If you pay it and are later awarded compensation with an effective date before closing, you may be eligible for a refund.
When should I file my VA disability claim if I plan to buy a home at retirement?
Benefits Delivery at Discharge accepts claims 180 to 90 days before you leave active duty. Filing in that window gives the best chance of having a proposed or memorandum rating before closing, which is what waives the funding fee at the closing table.
Does Virginia tax military retirement pay?
Virginia lets military retirees of any age subtract up to $40,000 a year of military retirement pay from state taxable income from tax year 2025 on, under Virginia Code section 58.1-322.02. The limit was $30,000 for 2024. Survivor Benefit Plan payments to a surviving spouse also qualify. VA disability compensation is not taxable income.
Do 100 percent disabled veterans pay property tax on their home in Virginia?
A veteran rated 100 percent service-connected, permanent and total by the VA is exempt from local real estate tax on the home they occupy as a principal residence, including the land under it up to one acre, or more where the locality allows, under Virginia Code section 58.1-3219.5. A surviving spouse keeps the exemption if the veteran died on or after January 1, 2011 and the spouse does not remarry, including after moving to a different home. You apply with your city or county.
Can I use my VA loan again if I am keeping my current home as a rental?
Often, yes. While the first VA loan stays open, its entitlement remains charged, but remaining entitlement can usually support a second VA loan, with a down payment covering any gap where lenders want 25 percent of the loan backed. Selling the first home and paying off the loan restores full entitlement, and a one-time restoration is available if the old loan is paid off while you keep the property.
How do lenders qualify me without BAH?
They look at the income you will have after separation: military retirement pay, VA disability compensation, a spouse’s income and civilian employment, each documented with a pay statement, award letter or offer letter. The budget for the house is built from that, not from the allowance you had on active duty.
Is there a VA loan limit for retirees in Hampton Roads?
With full entitlement there is no VA loan limit; the lender decides how much you can borrow from your credit, income, debts and assets. If part of your entitlement is still tied to an open VA loan, the county loan limit is used to work out how much remaining entitlement you have.
Should I buy before or after my retirement date?
It depends on when your new income can be documented and when your rating arrives. Closing after a proposed rating exists saves the funding fee; closing before a civilian job starts can make qualifying harder. Map the dates first, then pick the closing window with your lender.
Start your retirement home plan
Send your separation or retirement date, whether you have a VA rating or a claim in, and where you want to land. You will hear from me within one business day with the timeline and the lender introduction, no obligation.
Or skip the form
Call or text, any day.
(757) 270-3994What to include: your separation or retirement date, whether a disability claim is filed or a rating is in hand, whether you are keeping, selling or renting the current home, and where you will work. Everything else we cover on the call.
The last move should be the best one. Plan it like it is.
One conversation maps your separation date, the rating, your entitlement and the old house onto a closing date that keeps the most money in your pocket.
John King · Navy veteran, Machinist Mate · REALTOR® with Berkshire Hathaway HomeServices RW Towne Realty · License #0225211050 · Serving Virginia Beach, Norfolk, Chesapeake, Suffolk, Portsmouth, Hampton & Newport News
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