FED-001 // Federal law
Disabled Veterans’ Compensation Must Be Left Out of Certain HUD Income Tests
A new federal law requires service-connected disability compensation to be excluded from certain federal housing and community-development income determinations.
Disabled Veterans applying for, renewing, or disputing an income determination in an applicable HUD-funded housing or community-development program
What changed
Service-connected disability compensation is excluded from the covered income test.
The Disabled Veterans Housing Support Act, H.R. 224, was signed into law on January 20, 2026. It amends the Housing and Community Development Act of 1974 so service-connected disability compensation is not included when the covered statute determines whether a person is low- or moderate-income.
The change is about the income calculation used in the covered housing and community-development context. It does not create a new VA compensation benefit.
Why it matters
An earned disability benefit should not push a Veteran over the wrong line.
Eligibility rules can turn on how income is counted. For a Veteran whose VA disability compensation was previously included in a covered calculation, excluding it could affect whether the program sees the household as low- or moderate-income.
The statute is targeted. A local program may use a different rule, funding source, or income standard, which is why the name of the program and the written calculation matter.
What remains unknown
Local administration decides the practical next step.
The law does not mean every housing provider must recalculate every account the same way. Veterans should ask the provider or local administrator which income standard governs the program and whether the new federal rule applies to that determination.
Practical next move
What to do with this information.
- Ask the housing or community-development program which income definition and funding rule it uses before assuming this law applies.
- Keep the VA award letter and any written income calculation used by the program.
- If service-connected disability compensation appears to have been counted in an applicable federal calculation, request a written review or correction from the program administrator.
- For help interpreting a local program’s process, contact a HUD-approved housing counselor or a qualified local legal-aid organization.
Verify it yourself
Source rack.
Read the primary source before applying a national announcement to an individual situation.