VA Home Loan
A VA home loan is a mortgage benefit available to eligible Veterans, active-duty service members, certain National Guard and Reserve members, and some surviving spouses. The loan is provided by a private lender and partially guaranteed by the U.S. Department of Veterans Affairs, which may allow qualified borrowers to receive favorable financing terms.
Frequently Asked Questions
Does a VA loan require a down payment?
Qualified borrowers may be able to purchase a home with no down payment, provided the purchase price does not exceed the home’s appraised value and the borrower has sufficient VA entitlement.
Does a VA loan require monthly mortgage insurance?
No. VA-backed loans do not require private mortgage insurance or monthly mortgage insurance premiums, even when the borrower makes no down payment.
Who may qualify for a VA loan?
Eligibility is based primarily on service history and duty status. Veterans, active-duty service members, certain members of the National Guard and Reserve, and some surviving spouses may qualify. Borrowers must also satisfy the VA’s and lender’s credit, income and occupancy requirements.
What is a Certificate of Eligibility?
A Certificate of Eligibility, or COE, confirms to the lender that the borrower qualifies for the VA home loan benefit. A COE may be requested online, through an approved lender or by mail. Receiving a COE does not guarantee loan approval.
Is there a minimum credit score?
The VA requires borrowers to demonstrate sufficient credit and income, but individual lenders may establish additional credit standards. Qualification is based on the borrower’s complete financial profile and the lender’s underwriting requirements.
What is the VA funding fee?
The VA funding fee is a one-time charge that helps support the home loan program. The amount depends on factors such as the loan type, down payment and whether the benefit has been used before. The funding fee may generally be financed into a purchase loan.
Can the VA funding fee be waived?
Certain borrowers are exempt, including some Veterans receiving or eligible to receive compensation for a service-connected disability and other qualifying individuals. The borrower’s COE and VA documentation help determine exemption status.
Does the property have to be my primary residence?
Yes. The borrower must intend to personally occupy the property as a primary residence. VA purchase loans generally cannot be used solely for vacation homes or investment properties.
What types of properties may be purchased?
VA financing may be used for eligible single-family homes, properties with up to four units, approved condominium units, manufactured homes, new construction and certain purchase-and-improvement transactions. Program and lender restrictions may apply.
Does a VA loan require an appraisal?
Yes. The lender generally orders a VA appraisal to estimate the property’s market value and determine whether it meets applicable VA property requirements. A VA appraisal is not the same as a professional home inspection.
Are there VA loan limits?
Borrowers with full entitlement generally do not have a VA-imposed loan limit, although the lender will determine how much they can afford based on their income, credit, debts and financial qualifications. Loan limits may affect borrowers who have remaining rather than full entitlement.
Can I use my VA home loan benefit more than once?
Yes. Eligible borrowers may be able to reuse their benefit after selling or refinancing a property, restoring their entitlement or using remaining entitlement.
Can a VA loan be used to refinance?
Yes. Eligible homeowners may use a VA Interest Rate Reduction Refinance Loan to refinance an existing VA loan or a VA cash-out refinance to replace an existing VA or non-VA mortgage, subject to program and lender requirements.
Can the seller help pay closing costs?
Yes. A seller or builder may provide credits toward eligible closing costs. VA rules limit certain seller concessions to no more than 4% of the home’s reasonable value, although that limit does not apply to every standard closing-cost credit.
How do I know whether a VA loan is right for me?
A VA loan may be a strong option for eligible borrowers seeking a low- or no-down-payment mortgage without monthly mortgage insurance. A mortgage professional can confirm eligibility, help obtain the COE and compare the VA loan’s rate, fees and total cost with other available programs.