Written and reviewed by Jack Gladden, Senior Loan Officer, NMLS #1470164
Updated · 7-minute read · How these guides are written
On this page
VA loans in brief
- What it is
- A mortgage guaranteed by the Department of Veterans Affairs for eligible veterans, service members and some surviving spouses.
- Down payment
- None required when you have full entitlement and the appraisal supports the price.
- No monthly mortgage insurance
- Instead there’s a one-time VA funding fee, which many disabled veterans don’t pay.
- No loan limit
- With full entitlement, VA sets no maximum loan; lenders still need you to qualify for the payment.
- Use
- A home you’ll live in, including 1–4 units if you occupy one. You can use the benefit more than once.
- Proof
- A Certificate of Eligibility (COE), which I can usually request for you.
Who’s eligible.
VA eligibility depends on your service. These are VA’s minimums for most applicants:
| You served as | Minimum service |
|---|---|
| Active duty now | 90 continuous days. |
| Veteran, August 2, 1990 to today | 24 continuous months, or the full period you were called to active duty (at least 90 days). |
| National Guard | 90 days of non-training Title 10 active duty, or 6 creditable years in the Guard. |
| Reserve | 90 days of non-training active duty, or 6 creditable years in the Selected Reserve. |
| Surviving spouse | Eligible in some cases, for example if you receive Dependency and Indemnity Compensation. |
Shorter service can still qualify after a discharge for a service-connected disability, and earlier service periods have their own rules. Your Certificate of Eligibility confirms it.
The VA funding fee.
Instead of monthly mortgage insurance, VA loans have a one-time funding fee, usually added to the loan. VA’s current rates for purchase loans:
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
- Refinancing
- Cash-out refinance 2.15% first use, 3.3% after; an interest rate reduction refinance (IRRRL) 0.5%.
- Who doesn’t pay
- Veterans receiving, or eligible for, VA compensation for a service-connected disability; surviving spouses receiving Dependency and Indemnity Compensation; and active-duty members who have received a Purple Heart.
- Refunds
- If you’re later awarded disability compensation effective before your closing date, you may get the fee refunded.
Want your numbers with and without the fee?
Tell me your service, any disability rating and your price range. I’ll show you the VA loan and how it compares with FHA and conventional.
What lenders look for.
| Requirement | What’s typical |
|---|---|
| Credit | VA sets no minimum; many lenders look for about 620. |
| Income | VA checks residual income, the money left each month after major expenses, as well as debt-to-income. |
| Occupancy | You must plan to live in the home as your primary residence. |
| Appraisal | A VA appraisal that also checks minimum property requirements for safety and soundness. |
| Seller help | Sellers can pay your closing costs plus concessions of up to 4% of the home’s reasonable value (its VA appraised value). |
Entitlement and loan limits.
- Full entitlement
- If you’ve never used the benefit, or used it and paid the loan off and sold the home, VA sets no loan limit; you still need to qualify for the payment.
- Remaining entitlement
- If a VA loan is still open, your remaining entitlement is based on your county’s loan limit, and a larger purchase may need a down payment.
- Using it again
- You can use your VA benefit more than once, and in some cases have two VA loans at the same time.
VA refinancing.
IRRRL (streamline)
Refinance an existing VA loan to a lower rate or a stable payment, often with little paperwork and a 0.5% fee.
Best forCurrent VA borrowers
VA cash-out refinance
Replace any loan, VA or not, with a VA loan and take equity out.
Best forEligible owners with equity
Compare with a conventional cash-out refinance if you’d rather keep your entitlement free.
The trade-offs.
- The funding fee. Up to 3.3% on later use with little down, though often added to the loan, and waived for many disabled veterans.
- Primary home only. Not for vacation homes or pure investments.
- Property standards. Homes needing major repairs may not pass the VA appraisal as they are.
- Entitlement tied up. While a VA loan is open, part of your benefit is in use.
How we get started.
Tell me your service
Branch, dates, any disability rating, and the home you’re looking for.
I get your COE
And compare VA with FHA and conventional for your situation.
Pre-approval
So you can make strong offers, including asking for seller concessions.
Appraisal and closing
The VA appraisal, underwriting, and your keys.
VA loans, answered plainly.
Do you have to put 20% down on a VA loan?
No. With full entitlement, no down payment is required as long as the appraisal supports the price. Putting 5% or more down lowers the funding fee.
How do I qualify for a VA loan?
Eligibility comes from service: veterans, active-duty service members, many National Guard and Reserve members, and some surviving spouses. The first step is a Certificate of Eligibility from the VA, which I can usually request for you. The home must be your primary residence, and you still need to meet credit and income guidelines. VA loans have no monthly mortgage insurance; a one-time funding fee applies unless you are exempt.
How much do I need to make to buy a house with a VA loan?
VA looks at two things: your debt-to-income ratio, often around 41%, and residual income, the money left each month after the mortgage, taxes, insurance, debts and living costs, which must meet VA’s minimum for your family size and region. Tell me the price and your debts, and I’ll work out the exact figure at today’s rates.
What is the 4% rule for VA loans?
Sellers can contribute concessions of up to 4% of the home’s reasonable value, the VA appraised value, on top of paying your normal closing costs.
What disqualifies you for a VA loan?
Not meeting the service requirement, a home you won’t live in, or not meeting the lender’s credit and income standards, including VA’s residual income test.
Is there a VA loan limit?
Not with full entitlement. With entitlement still in use on another VA loan, your county’s loan limit affects how much you can borrow with no money down.
Can I use my VA loan more than once?
Yes. You can reuse the benefit, and the funding fee is higher on later use unless you’re exempt or put 5% or more down.
Do VA loans have mortgage insurance?
No monthly mortgage insurance. The one-time funding fee takes its place.
Which lender is best for VA loans?
The one that prices your file best and closes VA loans often, since VA appraisals and paperwork reward experience. Compare Loan Estimates from more than one lender; as a broker I can compare several for you. See also: VA funding fee calculator.
Can a 75-year-old veteran get a VA loan?
Yes. VA eligibility has no age limit, and lenders can’t refuse you or shorten the term because of your age. Retirement income, Social Security, pensions and VA benefits can all count toward qualifying. See also: FHA vs VA loans.
What is the downside of a VA loan?
The funding fee, unless you’re exempt; the home must be your primary residence and meet VA’s property requirements; and some sellers are wary of VA offers. For most eligible buyers the savings still outweigh these.
Conventional
FHA
Refinance
Jumbo