How It Works
VA loans are mortgage loans guaranteed by the U.S. Department of Veterans Affairs. Available exclusively to eligible veterans, active-duty service members, and surviving spouses, VA loans offer some of the best terms in the mortgage industry: zero down payment, no private mortgage insurance, and competitive interest rates that are often lower than conventional loans.
The VA does not directly lend money - instead, it guarantees a portion of the loan to private lenders, reducing their risk and allowing them to offer favorable terms. While the VA does not set a minimum credit score requirement, most lenders will have their own minimums, typically around 620. The VA does charge a funding fee that ranges from 1.25% to 3.3% of the loan amount, depending on the down payment and whether it is the borrower's first VA loan. This fee can be rolled into the loan.
One of the most powerful features of VA loans is that there is no loan limit for eligible borrowers with full entitlement. This means qualifying veterans can finance high-value homes without needing a jumbo loan or a down payment. VA loans also have a streamline refinance option called the Interest Rate Reduction Refinance Loan (IRRRL), which allows existing VA loan holders to refinance with minimal documentation.
Who Is This For?
- Active-duty military service members
- Veterans with honorable or other-than-dishonorable discharge
- National Guard and Reserve members with qualifying service
- Surviving spouses of veterans who died in service or from service-connected disability
- Military families looking for the most affordable path to homeownership
Pros & Cons
Frequently Asked Questions
Who qualifies for a VA loan?+
Eligible veterans, active-duty service members, National Guard and Reserves with sufficient service, and unremarried surviving spouses of veterans qualify for VA loans. A Certificate of Eligibility (COE) confirms your benefit.
Do I really need zero down payment for a VA loan?+
Yes. VA loans allow 100% financing with no down payment required, no matter the loan size, as long as you qualify based on income, credit, and the property's appraised value.
What is the VA funding fee?+
The funding fee is a one-time charge (typically 1.25%–3.3% of the loan) that goes back to the VA program. It can be financed into the loan. Veterans with 10%+ service-connected disability, Purple Heart recipients, and certain surviving spouses are exempt.
Can I use my VA loan benefit more than once?+
Yes. You can use your VA loan benefit multiple times throughout your life as long as you have remaining entitlement. After selling and paying off a previous VA loan, your full entitlement is restored.