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Buy Home Tips

A place to prepare, not a push to purchase

Topic file 06 of 20

VA home loans

A VA-backed loan can let an eligible service member, veteran or surviving spouse buy with no down payment and no monthly mortgage insurance. The trade-off is a one-time funding fee, and the details decide how much it costs you.

VA home loans are made by private lenders and guaranteed in part by the Department of Veterans Affairs. VA explains that the guaranty lets lenders offer loans without a down payment or monthly mortgage insurance, and that the one-time funding fee paid at closing helps lower the program's cost to taxpayers. VA sets the program rules; the lender sets the interest rate, discount points and its own closing costs, and those vary from lender to lender.

To get a VA-backed loan, you need to meet the service requirements, get a Certificate of Eligibility, and meet credit, income and occupancy requirements from both VA and the lender.

Service requirements in brief

VA publishes minimum active-duty requirements by period of service. For current service members, it is at least 90 continuous days. For veterans who served from August 2, 1990, to the present, it is generally at least 24 continuous months, or the full period of at least 90 days for which you were called to active duty, with exceptions such as a discharge for a service-connected disability. National Guard and Reserve members have their own routes, including 90 days of qualifying active duty or a number of creditable years. Some surviving spouses are also eligible. The eligibility guide in this file lists where to check your own situation.

The Certificate of Eligibility

The COE shows a lender that you qualify for the benefit. VA lists the documents for each situation: veterans usually need a DD214, current service members a statement of service signed by their command, and Guard or Reserve members the records that show their activation or creditable years. Many lenders can request the COE electronically during the application.

The funding fee

VA calculates the funding fee as a percentage of the loan amount, not the price. For purchase loans, the chart effective April 7, 2023, sets first use at 2.15 percent with less than 5 percent down, 1.5 percent with 5 percent or more, and 1.25 percent with 10 percent or more. After first use, the no-down-payment rate is 3.3 percent, while the 5 and 10 percent tiers stay the same. Veterans receiving compensation for a service-connected disability and certain others do not pay the fee. You can pay it in cash at closing or finance it into the loan.

Closing costs and seller help

VA lets sellers or builders credit some or all of a buyer's closing costs and limits seller concessions, such as paying the funding fee or paying off a buyer's debts, to 4 percent of the home's reasonable value from the VA Notice of Value. On a purchase loan, VA says only the funding fee can be financed; other fees and charges are paid at closing, which makes seller credits and negotiation important.

The VA appraisal

VA appraisals estimate reasonable value and check minimum property requirements. If the value comes in below the price, the buyer can renegotiate, cover the gap in cash, or walk away under the contract terms. The appraisal guide explains the reconsideration process.

The order of steps

Start by confirming your eligibility against VA's service rules for your era and component. Then request your Certificate of Eligibility, online or through a lender, and check whether it shows a funding fee exemption. With the certificate in hand, shop lenders and compare Loan Estimates the same way any buyer would. VA sets limits on some closing costs and concessions, but rates and lender fees still vary. The guides on eligibility, the certificate and the funding fee cover each step in order.

Guard, Reserve and surviving spouses

The VA home loan is not only for people with long active-duty careers. Members of the National Guard and Reserve can qualify through 90 days of qualifying active duty or through six creditable years of service, while still serving or after an honorable discharge, and VA's funding fee chart lists the same purchase rates for them as for other borrowers. Certain surviving spouses can also qualify, depending on how the veteran died and on remarriage timing set out by VA, and surviving spouses who receive Dependency and Indemnity Compensation are exempt from the funding fee. In every case the first step is the Certificate of Eligibility, and the lender still reviews credit and income. The guides on Guard and Reserve eligibility and on surviving spouse benefits list the documents each group needs.

How to use this file

Read the funding fee guide first if you already know you are eligible; it includes the chart, worked examples and a calculator. Then use the guides on entitlement, Guard and Reserve service, surviving spouses and comparing VA with FHA. Bring your COE and Loan Estimates from at least two lenders to the comparison.

Guides in this file

  1. The VA appraisal: Notice of Value, Tidewater and what to do if it comes in low

    What the VA appraiser checks and your options if value falls short.

  2. How to get a VA Certificate of Eligibility (COE)

    The document that proves your VA home loan benefit, and how to get it.

  3. VA loan closing costs, seller credits and the 4 percent concession limit

    Closing-cost credits are unlimited; concessions stop at 4 percent.

  4. VA loan entitlement: basic, bonus and what is left after a first loan

    The number on your COE is a guaranty, not a loan amount.

  5. The VA funding fee: chart, examples and exemptions

    VA's chart turned into dollars, plus who pays nothing and how refunds work.

  6. VA loan eligibility: service requirements by group

    The service minimums VA uses, and what to do if you fall short.

  7. VA loans for National Guard and Reserve members

    Guard and Reserve service can earn the VA benefit through activation or six creditable years.

  8. VA home loans for surviving spouses

    The benefit can pass to a spouse, and the forms depend on whether you receive DIC.

  9. VA loan vs FHA loan: which costs less for an eligible buyer

    If you can use both, compare the funding fee against FHA's upfront and yearly premiums.

Related reading on this site

Questions buyers ask

Do VA loans require a down payment?

VA's own explanation is that the program does not require a down payment or monthly mortgage insurance. The lender still has credit and income requirements, and a down payment of 5 or 10 percent lowers the funding fee.

Can I use a VA loan more than once?

Yes. The benefit can be used again, though the funding fee for later use with less than 5 percent down is higher than for first use, according to VA's chart.

Sources checked for this page

Checked November 2026. Programs and limits change; confirm with the source before you rely on a figure.

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