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VA Loan FAQ

A VA home loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs (VA) for eligible service members, veterans, and surviving spouses.

• No Down Payment Requirement: 

One of the most significant advantages is the ability to purchase a home with 0% down payment, a major benefit that sets it apart from conventional and FHA loans.

• No Private Mortgage Insurance (PMI): 

Unlike conventional loans with a down payment of less than 20% or FHA loans, VA loans do not require a borrower to pay for private mortgage insurance, which can lead to substantial monthly savings.

• Competitive Interest Rates: 

VA loans often have lower interest rates than conventional loans, as the government guarantee reduces the risk for lenders.

• Flexible Credit Requirements: 

The VA does not set a minimum credit score. However, individual lenders may have their own credit score requirements, which are often more flexible than those for other loan types.

• Lower Closing Costs: 

Closing costs are regulated by the VA, and lenders are limited in the fees they can charge. The seller may also contribute to the buyer's closing costs.

• No Prepayment Penalty: 

You can pay off the loan early without facing any financial penalty.

Eligibility Requirements

To be eligible for a VA loan, you must meet one or more of the following service requirements. The specific duration of service required varies based on the time period you served.

• Veterans: 

Generally, you must have served a specific period on active duty or as a reservist or National Guard member.

• Active-Duty Service Members: 

You may be eligible after a certain period of continuous service.

• Reservists and National Guard Members: 

You may be eligible after serving for at least six years.

• Surviving Spouses: 

The unmarried surviving spouse of a veteran who died while in service or from a service-connected disability may be eligible.

Certificate of Eligibility (COE)

The first step in the process is obtaining a Certificate of Eligibility (COE) from the Department of Veterans Affairs, which verifies that you have met the minimum service requirements.

The VA Funding Fee

While there is no PMI, VA loans do come with a one-time VA funding fee. This fee helps the VA guarantee the loan and is paid directly to the VA. The amount of the fee depends on your service status, the type of loan, and whether you have used a VA loan before. Veterans receiving VA disability compensation are typically exempt from paying this fee.