A VA loan is a mortgage loan program backed by the U.S. Department of Veterans Affairs (VA), designed to help veterans, active-duty service members, and eligible surviving spouses purchase homes. The VA doesn't actually lend the money—instead, it guarantees a portion of the loan, which allows approved lenders to offer more favorable terms.
The VA loan program was created in 1944 as part of the GI Bill to help returning World War II veterans achieve homeownership. Since then, the VA has helped over 25 million veterans and service members purchase homes.
The VA guarantees up to 25% of the loan amount, which protects lenders against loss and enables them to offer loans with no down payment and no PMI requirement.
VA loans offer the most generous terms of any mortgage program available. Here are the major benefits that make VA loans exceptional:
Purchase a home with 0% down payment up to the conforming loan limit in your county. This can save you $20,000-$50,000+ compared to conventional loans.
Unlike conventional loans with less than 20% down, VA loans never require private mortgage insurance, saving $100-$300+ monthly.
VA loans typically offer interest rates 0.25% to 0.50% lower than conventional loans, saving thousands over the life of the loan.
While lenders set their own minimums, VA loans are generally more forgiving of credit issues than conventional loans.
You can use your VA loan benefit multiple times throughout your lifetime—there's no one-time limit.
The VA limits what lenders can charge veterans for closing costs, and sellers can pay all your closing costs if negotiated.
Pay off your loan early without any penalties or fees—great for building equity faster.
If you face financial hardship, the VA can intervene to help you avoid foreclosure through their servicing program.
Understanding how VA loans work helps you appreciate the unique advantages and navigate the process smoothly. Here's a step-by-step breakdown:
Before applying, confirm you meet the service requirements for VA loan eligibility. The basic requirements include:
The COE is a document from the VA that proves you're eligible for a VA loan. You can get your COE:
Contact VA-approved lenders to get pre-approved. The lender will review your:
Work with a real estate agent to find a home that meets VA minimum property requirements (MPRs). The home must be:
The VA requires a special appraisal to ensure the home meets MPRs and is worth the purchase price. The VA appraiser will:
The lender's underwriter reviews your complete loan file to ensure you meet all VA and lender requirements. They'll verify:
Once approved, you'll sign final documents and pay closing costs (if any). You'll receive:
Most borrowers pay a VA funding fee (1.25% to 3.3% of the loan amount depending on down payment and use), which helps keep the program running. However, veterans with service-connected disabilities and surviving spouses are exempt from this fee. The funding fee can be financed into your loan amount.
VA loan eligibility is based on your service history and character of discharge. Here's a detailed breakdown:
Eligibility varies by when you served:
Unmarried surviving spouses of veterans may be eligible if the veteran:
You must have received a discharge that was other than dishonorable to be eligible for VA loan benefits. If you're unsure about your discharge status, you can request a copy of your DD-214 or contact the VA.
While the VA doesn't set a minimum credit score, most lenders require:
One of the most frequently asked questions about VA loans is: "Can you use a VA loan twice or multiple times?"
Your VA loan benefit is reusable and available for your lifetime. There's no limit to how many times you can use it, as long as you meet the eligibility requirements.
To use your VA loan benefit again, you can restore your entitlement by:
If you still have an active VA loan, you may be able to use your remaining entitlement to purchase another home if:
As of 2025, veterans have the following entitlement:
Since the Blue Water Navy Vietnam Veterans Act of 2019, veterans with full entitlement can borrow above the conforming loan limit with no down payment, as long as the lender approves and they meet credit and income requirements.
Here's how VA loans compare to other popular mortgage options:
| Feature | VA Loan | FHA Loan | Conventional Loan |
|---|---|---|---|
| Minimum Down Payment | 0% | 3.5% | 3% - 20% |
| PMI/MIP Required | No | Yes (lifetime for 3.5% down) | Yes (if less than 20% down) |
| Funding Fee | 1.25% - 3.3% (can be financed) | 1.75% upfront + 0.55% - 0.85% annual | None |
| Credit Score Minimum | No VA minimum (lender typically 620+) | 580 for 3.5% down; 500 for 10% down | 620 - 640+ |
| Eligibility | Veterans, active military, eligible spouses | Anyone who qualifies | Anyone who qualifies |
| Property Requirements | Must meet VA MPRs; primary residence | Must meet FHA standards; primary residence | Standard appraisal; any use |
| Interest Rates | Typically lowest | Competitive | Varies by credit/down payment |
| Loan Limits | No limit with full entitlement | $498,257 - $1,149,825 (2025) | $766,550 - $1,149,825 (2025) |
Understanding the costs associated with VA loans helps you budget properly and avoid surprises.
| Loan Type | Down Payment | First Use | Subsequent Use |
|---|---|---|---|
| Purchase/Construction | Less than 5% | 2.15% | 3.3% |
| Purchase/Construction | 5% - 9% | 1.5% | 1.5% |
| Purchase/Construction | 10% or more | 1.25% | 1.25% |
| Cash-Out Refinance | N/A | 2.15% | 3.3% |
| Interest Rate Reduction Refinance (IRRRL) | N/A | 0.5% | 0.5% |
The VA limits what lenders can charge. Allowed closing costs include:
The following costs CANNOT be charged to veterans:
Sellers can pay up to 4% of the home price toward your closing costs. This means you could potentially buy a home with zero down payment AND have the seller pay all your closing costs!
VA loans can be used to purchase various property types, but they must meet Minimum Property Requirements (MPRs):
The home must:
Also called a "VA Streamline Refinance," the IRRRL allows you to refinance your existing VA loan to:
Benefits: No appraisal required, minimal documentation, funding fee only 0.5%
Access your home's equity by refinancing for more than you owe and taking the difference in cash. You can use the funds for:
If you're a Native American veteran, the NADL program provides direct loans from the VA to purchase, build, or improve a home on Federal Trust Land.
Veterans with certain service-connected disabilities may qualify for grants to:
TRUTH: VA loans typically close in 30-45 days, similar to conventional loans. With an experienced VA lender and proper preparation, some close even faster.
TRUTH: While some sellers may have concerns, VA loans are just as secure as conventional loans. Many sellers appreciate working with qualified buyers, and in competitive markets, your guaranteed financing can be an advantage.
TRUTH: You can use your VA loan benefit multiple times throughout your lifetime. Your entitlement is reusable after you pay off the loan and sell the property.
TRUTH: VA loans are available whether you're a first-time homebuyer or have owned homes before. You can use the benefit multiple times.
TRUTH: VA appraisals ensure the home is safe and worth the price. Most homes easily pass. If repairs are needed, sellers often make them or offer credits.
Review the service requirements and ensure you qualify. If you're unsure, contact the VA or a VA-approved lender.
Get your Certificate of Eligibility through eBenefits, your lender, or by mail. This usually takes just minutes online.
Check your credit score, calculate your debt-to-income ratio, and gather financial documents:
Compare at least 3 VA-approved lenders. Ask about:
Complete a full loan application and get a pre-approval letter. This shows sellers you're a serious, qualified buyer.
Work with a real estate agent experienced with VA loans. Make sure properties you view meet VA requirements.
Submit your offer with your pre-approval letter. Consider asking the seller to contribute to closing costs (up to 4%).
Your lender will order the VA appraisal. Review the results and address any required repairs through negotiations with the seller.
Once underwriting is complete and you're cleared to close, review your Closing Disclosure, conduct a final walkthrough, and sign documents at closing.
Calculate your potential monthly payment and see how much home you can afford with a VA loan's zero down payment requirement.
Try Our Mortgage Calculator →As of 2025, there is no maximum VA loan amount for veterans with full entitlement. You can borrow as much as a lender will approve based on your income, credit, and debt-to-income ratio. In high-cost counties, entitlement amounts can exceed $1 million.
While the VA doesn't set a minimum credit score, most lenders require at least 620. Some lenders may work with scores as low as 580 with compensating factors. Past credit issues like bankruptcies or foreclosures may be acceptable if you've re-established good credit and meet waiting periods.
VA loans typically close in 30-45 days, similar to conventional loans. Factors affecting timeline include: lender efficiency, appraisal scheduling, your document preparation, and whether repairs are required.
You must occupy the home as your primary residence for at least 12 months. After that, you can rent it out while maintaining your VA loan. This is a common strategy for building rental property portfolios.
Standard VA loans require homes to meet minimum property requirements at purchase. However, the VA offers a renovation loan (VA Rehab Loan) that allows you to buy and renovate a home with one loan, rolling renovation costs into your mortgage.
If the appraisal is lower than the purchase price, you have several options: negotiate a lower price with the seller, make up the difference with a down payment, request a Reconsideration of Value, or walk away from the deal.
Yes! You can buy a 2-4 unit property with a VA loan as long as you occupy one unit as your primary residence. This is an excellent way to start building wealth through real estate.
If you've fully restored your entitlement (paid off previous loan and sold the property), you can still purchase with 0% down on your next VA loan. If using remaining entitlement, you may need a down payment depending on the loan amount and your available entitlement.
Here are official resources to help you navigate the VA loan process:
VA loans are arguably the best mortgage product available, offering unmatched benefits that can save you tens of thousands of dollars. If you're eligible, a VA loan provides:
The VA loan program is a well-deserved benefit for those who have served our country. Whether you're buying your first home or your fifth, a VA loan can help you achieve homeownership with better terms than nearly any other financing option.
Your VA home loan benefit is a thank you for your service to our nation. Take advantage of this powerful benefit to achieve the American dream of homeownership and build lasting wealth for you and your family.
See what your monthly payment would be with 0% down and no PMI. Our calculator helps you understand the true cost and savings of a VA loan.
Calculate Now →