Taxation and Revenue; disabled veterans' homestead taxes inclusion in debt-to-income ratio under certain circumstances prohibited

Mortgage calculation help for disabled veterans

Beginning October 1, 2026, qualifying Alabama veterans can get a tentative disability certificate before buying their main home. Veterans must have a 100% VA rating for a service-connected, permanent, total disability and qualify for the existing homestead exemption. They must submit a purchase agreement, VA disability records, and an affidavit on a Department of Revenue form. The affidavit must name the veteran and spouse, if applicable, state whether they will own the home jointly, and confirm it will be the veteran’s main residence. Tax officials must issue the certificate within 20 days after receiving all required information. The Department of Revenue must set the certificate’s form, including a statement of eligibility for the property tax exemption. Once the veteran buys the home, the certificate is valid for the existing exemption. Settlement agents and loan closing officers must exclude the home’s property taxes from the borrower’s debt-to-income calculation when given this certificate.