Reading Your Escrow Analysis When Property Tax Is Zero: A VA Disability Homeowner's Guide

October 20, 2026

If your 100% P&T rating gets your home exempted from property tax, the largest line in your escrow account may be gone. The account itself is not. It still gets analyzed every year, and it can still move. This guide goes straight to the part most exempt homeowners never learn: how to read the analysis when only insurance is left.

The line items that remain

After the exemption is applied, escrow on a VA loan typically comes down to homeowners insurance and, where the property needs it, flood insurance. There is no monthly mortgage insurance on a VA loan. Skylar, a fictional veteran in this situation, found that her entire escrow story was now two possible lines.

That simplifies things. It also means every change you see traces back to one of those two lines or to the account mechanics below.

How the yearly analysis works

Your servicer looks at what it expects to pay out over the coming year and compares that to what it has collected. Three outcomes are possible:

- Balanced: your payment into escrow stays about the same.
- Surplus: the account holds more than needed, and you may see a refund or a lower deposit.
- Shortage: the account fell behind, often because a premium came in higher than projected.

Federal escrow rules allow a cushion of up to two months of charges. If your statement shows a shortage, it may include rebuilding that cushion. Ask the servicer to show you the math.

Where the exemption can quietly fail

The exemption is only as good as the paperwork behind it. In many places you must apply with your VA rating letter, and the county has to approve it. Check three things:

- The county records show the exemption on your home, not just a pending application.
- Your servicer has been told, so tax is no longer being collected into escrow.
- The exemption covers what you think it covers. Some places limit it to a primary residence or to certain charges, and special assessments may be treated differently.

If tax was collected after the exemption took effect, ask the servicer how the account will be corrected.

Insurance is the whole game now

Because nothing else moves, your insurance renewal sets your escrow change. I will not give you a percentage, because there is not an honest one to give. It depends on your insurer, your home, and your area.

What you can control:

- Request quotes from more than one insurer before each renewal.
- Ask your current insurer what drove any change and which discounts apply.
- Review your coverage so you are not paying for something you do not need or missing something you do.
- If your home needs flood coverage, shop that separately. In the Charleston area, coastal homes can fall into that group.

A yearly checklist

1. Confirm the exemption is still in place with the county.
2. Read the escrow analysis the day it arrives.
3. Identify whether any change is premium, shortage, or cushion.
4. If there is a shortage, ask whether it can be spread over time.
5. Re-shop insurance before the next renewal.

Exemption rules vary by state and county, so verify the details where you live.

If you want help with a VA purchase or a clearer look at your current escrow, I am Jason Sharon, a licensed mortgage broker, and I find the path. Call 843-LOW-RATE.

Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.