When the Tunnel to Towers Foundation delivers a mortgage-free home, the recipient becomes the legal owner. Their name goes on the deed at the county land records office, not the foundation’s. That is true whether the foundation builds a new smart home for a catastrophically injured veteran, gives a new home to a Gold Star family, or pays off the existing mortgage on a home a surviving family already owns.1Tunnel to Towers Foundation. About Smart Home Program The foundation is not a landlord, and recipients are not tenants. They hold title with the same rights any homeowner has: to live in the property, modify it, and pass it to heirs.
How Ownership Transfers Under Each Program
The foundation runs three housing programs, and the paperwork looks a little different in each one.
The Smart Home Program builds or renovates fully accessible homes for veterans and first responders who suffered catastrophic line-of-duty injuries that permanently limit their mobility or ability to live independently.1Tunnel to Towers Foundation. About Smart Home Program The foundation handles land acquisition, construction, and accessibility modifications. Once construction is done, it transfers the property to the recipient through a deed recorded in the local county land records. From that point on, the veteran or first responder holds legal title to the home and the land beneath it.
The Gold Star Family Home Program provides mortgage-free homes to surviving spouses of service members killed in action, focusing on families with young children.2Tunnel to Towers Foundation. Gold Star Family Home Program The Fallen First Responder Home Program does the same for families of first responders who died in the line of duty or from 9/11-related illnesses and left behind young children.3Tunnel to Towers Foundation. Fallen First Responder Home Program For these two programs, the path to ownership takes one of two shapes.
In many cases, the family already owns a home with an outstanding mortgage, and the foundation pays that mortgage off in full. The lender then files a satisfaction or release of mortgage in the public records, removing the bank’s lien from the property. The surviving spouse’s name stays on the deed exactly as it was before. The home is now free and clear of institutional debt.
In other cases, the foundation provides a brand-new mortgage-free home. The surviving spouse or designated family member is named as the owner on the deed, just as in the Smart Home Program. Either way, the family ends up holding the property without a monthly mortgage payment.
Because the deed is a public record, anyone can confirm ownership by checking with the county recorder’s office.
What a Recipient Can and Cannot Do With the Home
Charitable housing programs frequently attach conditions to their donations, and the standard tool for this across the field is a forgivable lien, sometimes called a silent mortgage, recorded against the property. This instrument typically requires the recipient to live in the home as their primary residence for a set number of years. Each year of occupancy reduces the lien by a proportional amount until it reaches zero and is formally released. The purpose is to make sure the home actually serves the person it was intended for, rather than being flipped for a quick profit. If a recipient sells the home before the restriction period expires, they may owe the foundation a prorated share of the value. Once the occupancy period passes, the lien is discharged and the owner has completely unrestricted title.
The specific terms of any restrictions Tunnel to Towers places on individual properties are not published on the foundation’s website. If you are receiving a home, review your closing documents carefully, and consider consulting a real estate attorney about what you can and cannot do with the property during any restriction period.
Is the Home Taxable Income?
No. A home received from a charitable foundation is treated as a gift under federal tax law, and its value is not counted as taxable income. Section 102 of the Internal Revenue Code excludes property acquired by gift from gross income.4Office of the Law Revision Counsel. 26 USC 102 – Gifts and Inheritances A transfer qualifies as a gift when it comes from “detached and disinterested generosity” rather than a legal obligation or expected economic benefit, and a charitable foundation donating a home to a wounded veteran or a Gold Star family fits that description.5Internal Revenue Service. Rev. Rul. 99-44
The same logic applies when the foundation pays off an existing mortgage. The family does not owe income tax on the amount the foundation paid to the lender. Any income the property later generates, such as rental income if the owner eventually rents it out, would be taxable in the year received.4Office of the Law Revision Counsel. 26 USC 102 – Gifts and Inheritances Keep the closing documents and any correspondence from the foundation on file in case the IRS ever asks about the nature of the transfer.
Property Taxes and Ongoing Costs
Owning the home outright is not the same as living expense-free. Once the foundation transfers the property or pays off the mortgage, every future cost of homeownership belongs to the recipient.
Property taxes are owed to local governments regardless of how you acquired the home. There is no federal property tax exemption for disabled veterans, but the vast majority of states offer some form of relief for service-connected disabilities. The scope varies. In Florida, Oklahoma, and Mississippi, veterans with a 100% service-connected disability rating pay zero property taxes on their primary residence. Illinois exempts all property taxes for veterans rated at 70% or higher, while those rated between 30% and 50% receive a $2,500 deduction.6Veterans Affairs. Unlocking Veteran Tax Exemptions Across States and U.S. Territories Because most Smart Home recipients have severe service-connected disabilities, many will qualify for a full or near-full exemption. Apply through the county tax assessor’s office as soon as possible after receiving the home; exemptions may not apply retroactively, and missing a filing deadline could mean paying a full year of taxes you did not owe.
Homeowner’s insurance is another unavoidable cost. Even without a lender requiring coverage, going uninsured on a mortgage-free home would be a serious financial risk. If the home is damaged by fire, weather, or another covered event, insurance is the only way to recover the value the foundation provided.
Beyond taxes and insurance, the owner is responsible for all utilities, structural maintenance, and repairs. Smart homes often include automated doors, wheelchair lifts, and voice-controlled features that require periodic servicing. If the home is in a community with a homeowners association, monthly or annual dues and special assessments fall on the owner as well. Failing to pay property taxes can eventually result in a tax lien or government seizure of the property, which would be a devastating outcome after receiving a charitable home. Building a budget for these recurring costs before or immediately after taking title is one of the most important practical steps a recipient can take.