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1 (269) 462-8095VA Loans: The Complete Guide
Get the most out of your hard-earned benefit with the tools to navigate your VA home purchase.
See What You Qualify ForExplore the guide
Main Takeaways
- A VA loan lets most eligible Veterans buy with no down payment and no monthly private mortgage insurance (PMI).
- VA loans often have flexible credit guidelines and limits on certain closing costs and fees.
- The VA loan is a lifetime benefit that can be used more than once.
What is a VA Loan?
A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs for eligible Veterans, service members and surviving spouses. The VA guarantees part of the loan, but the loan itself comes from a private lender such as a mortgage company or bank.
VA home loans can be used to buy a single-family home, condo, multi-unit property (up to four units), manufactured home or new construction, as long as you live in it as your primary residence.
VA Loan Benefits
The VA home loan program was created in 1944 as part of the original GI Bill of Rights. VA loans work much like any other home loan, but come with significant benefits meant to make homeownership easier and more affordable for Veterans and service members.
Here's a look at some of the biggest benefits of VA loans:
$0 Down Payment
Buying a home without a down payment is the signature benefit of VA loans. Qualified Veterans can purchase with no money down, as long as the sale price doesn't exceed the appraised value.
Most other loan types require a down payment, often at least 3% or more. Saving that kind of lump sum can take years. VA buyers who do have cash saved can keep it for emergencies, repairs or other goals.
Lower Interest Rates
Because the VA guarantees part of every VA loan, lenders take on less risk. That often lets them offer VA borrowers competitive interest rates compared with conventional and FHA loans.
Flexible Credit Guidelines
The VA doesn't set a minimum credit score. Lenders set their own guidelines, which are often more flexible than for conventional loans, and VA loans can be easier to qualify for after past credit challenges.
Closing Cost Limits
The VA limits certain closing costs and fees that Veterans can be charged, and sellers can pay some or all of a buyer's closing costs. This helps keep the upfront cost of buying a home down.
No Private Mortgage Insurance
Conventional loans with less than 20% down and FHA loans typically require monthly mortgage insurance. VA loans never do, which can save you a meaningful amount every month.
VA Loan Eligibility
Veterans and service members must meet basic time-in-service and character of service requirements to be eligible for a VA home loan. Some surviving spouses also have VA loan eligibility.
Active-duty service members, Veterans and those serving in the National Guard and Reserves can all be eligible, along with select other groups.
Generally, you can be eligible for a VA loan if you served:
- 90 consecutive days on active duty (wartime)
- 181 consecutive days on active duty (peacetime)
- 6 years in the Guard or Reserve, or 90 days under Title 32 orders (at least 30 of those days consecutive)
Your Certificate of Eligibility (COE) is a document from the VA confirming you meet the service guidelines. You don't need it before starting the home loan process, and VeteranDirect can help you get it.
You'll also need to meet lender guidelines for things like credit and debt-to-income ratio.
Skip the guesswork and check your eligibility with VeteranDirect.
How VA Loans Compare
Every mortgage type has its own advantages and drawbacks. Side by side, VA loans stand out for many Veteran and military homebuyers. Here's a quick look at how they compare with FHA and conventional loans.
| VA Loan | FHA Loan | Conventional | |
|---|---|---|---|
| Minimum down payment | $0 | 3.5% | 3% to 5% |
| Monthly mortgage insurance | None | Required | Required under 20% down |
| Credit flexibility | Flexible, no VA minimum | Flexible | Stricter |
| Who can use it | Eligible Veterans, service members and some surviving spouses | Any qualified buyer | Any qualified buyer |
How to Get Started
- 1
Check your eligibility
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If I've Previously Used a VA Loan, Can I Use It Again?
Yes. The VA loan is a lifetime benefit, and you can use it again and again.
Most buyers get their full benefit back after selling a home and paying off the original VA loan. You can also buy a home with a VA loan, live in it for a while, then keep it as a rental and buy your next home using any VA loan entitlement you have left.
Usually you need to sell to restore your full entitlement. However, the VA gives qualified buyers a one-time chance to pay off a VA loan in full (often by refinancing into a non-VA loan), keep the home, and buy again with full entitlement.
Continue to learn more about VA loan eligibility.
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