You served your country. Now it's time to claim one of the most valuable benefits you've earned—a VA loan that requires zero down payment, no PMI, and offers rates that beat conventional mortgages.
Yet 70% of eligible veterans don't use their VA loan benefit, often due to misconceptions or lack of information. Let's change that.
VA Loan Eligibility: Who Qualifies?
More service members qualify than realize it. You're likely eligible if you meet ANY of these criteria:
Active Duty Service
- 90 consecutive days during wartime
- 181 consecutive days during peacetime
- 90 days under Title 32 orders (National Guard)
- 6 years in Selected Reserve or National Guard
Veterans
- 24 continuous months of active service (post-1980)
- Full period ordered to active duty (at least 90 days)
- Discharged for hardship, government convenience, or certain medical conditions
- Discharged for service-connected disability (any length)
Other Eligible Groups
- Surviving spouses of veterans who died in service
- Surviving spouses of veterans who died from service-connected disabilities
- Spouses of MIA/POW service members (90+ days)
- Public Health Service officers
- NOAA commissioned officers
Unlike the strict requirements for FHA or conventional loans, VA loans focus on service, not just credit scores.
The Incredible Benefits Most Veterans Miss
1. Zero Down Payment (Really!)
While conventional loans require 3-20% down and FHA needs 3.5%, VA loans require $0 down on homes up to conforming loan limits (and even beyond with partial down payments).
On a $400,000 home:
- Conventional (20% down): $80,000 needed
- FHA (3.5% down): $14,000 needed
- VA loan: $0 needed
2. No Private Mortgage Insurance
This saves $200-500+ monthly compared to FHA or conventional loans with less than 20% down. Over 30 years, that's $72,000-180,000 in savings.
3. Competitive Interest Rates
VA loans typically offer rates 0.25-0.75% lower than conventional mortgages. On a $300,000 loan, that's $150-450 monthly savings.
4. No Prepayment Penalties
Pay off your loan early without any fees. Make extra payments whenever you want.
5. Assumable Mortgages
Future buyers can take over your VA loan and its rate—a huge selling point if rates rise. We discuss this advantage in our analysis of rising interest rates.
6. Lifetime Reusable Benefit
Use it multiple times throughout your life. Buy, sell, and buy again with your VA benefit.
The VA Funding Fee: What You'll Actually Pay
The only significant cost unique to VA loans is the funding fee, which varies based on your situation:
First-Time Use (No Down Payment)
- Regular military: 2.15%
- Reserve/National Guard: 2.40%
Subsequent Use (No Down Payment)
- Regular military: 3.30%
- Reserve/National Guard: 3.30%
With Down Payment
- 5-9% down: 1.50% fee
- 10%+ down: 1.25% fee
Funding Fee Exemptions
You're exempt if you:
- Receive VA disability compensation
- Are eligible for compensation but receive retirement pay instead
- Are a Purple Heart recipient
- Are a surviving spouse
The fee can be rolled into your loan, requiring no upfront payment. Compare this to the perpetual mortgage insurance on FHA loans discussed in our Emergency Fund vs Down Payment guide.
VA Loan Limits and Jumbo VA Loans
As of 2020, there are NO loan limits for veterans with full entitlement. You can borrow what you qualify for based on income and credit.
Full Entitlement Applies If:
- You've never used your VA loan benefit
- You've paid off a previous VA loan and sold the property
- You've had a foreclosure or short sale but it's been 2+ years
Partial Entitlement Limits
If you have an existing VA loan or defaulted previously, county loan limits apply (typically $548,250-$1,089,300 in 2024). You can still buy above these limits with a down payment of 25% of the amount over the limit.
For luxury homes, see our guide on Jumbo Mortgages for comparison.
Credit Score Requirements: The Flexible Truth
The VA doesn't set a minimum credit score. However, lenders typically require:
- 620+ for automated underwriting
- 580-619 for manual underwriting
- Some lenders go as low as 500 with compensating factors
Compensating Factors for Lower Credit
- Strong residual income
- Minimal debt
- Significant assets
- Previous satisfactory mortgage history
- Conservative loan amount relative to income
Learn more about credit requirements in our Credit Score Myths guide.
The VA Appraisal: Protecting Your Investment
VA appraisals are more thorough than conventional appraisals, ensuring the home is safe and fairly priced.
Minimum Property Requirements (MPRs)
- Safe drinking water and working sewage
- Adequate heating system
- Roof in good condition (3+ years remaining life)
- No lead paint hazards
- No wood-destroying insect damage
- Safe electrical systems
- Structurally sound
These requirements protect you from buying a money pit. For warning signs, see our Home Inspection Red Flags guide.
If Appraisal Comes Low
Options include:
- Seller reduces price
- Request Reconsideration of Value (ROV)
- Pay the difference in cash
- Walk away with earnest money protected
Types of Properties You Can Buy
Eligible Properties
- Single-family homes
- Condominiums (VA-approved)
- Manufactured homes (on permanent foundations)
- Multi-unit properties (up to 4 units if you occupy one)
- New construction homes
Ineligible Properties
- Investment properties (must be primary residence)
- Vacation homes
- Cooperatives (in most states)
- Farms or business properties
The VA Loan Process: Step by Step
Step 1: Get Your Certificate of Eligibility (COE)
Three ways to obtain:
- Online through VA.gov (instant for most)
- Through your lender (they can pull it)
- Mail Form 26-1880 to VA
Step 2: Find a VA-Approved Lender
Not all lenders offer VA loans. Compare at least 3-5 lenders for:
- Interest rates
- Lender fees
- Experience with VA loans
- Customer service reputation
Use strategies from our Rate Negotiation guide to get the best deal.
Step 3: Get Pre-Approved
Provide:
- Certificate of Eligibility
- DD-214 or Statement of Service
- Recent pay stubs
- W-2s or tax returns (2 years)
- Bank statements
Step 4: Shop for Homes
Consider:
- VA inspection requirements
- Distance from VA medical facilities
- Future resale value
- Property tax rates (vary significantly)
See our analysis of best times to buy for market timing.
Step 5: Make an Offer
Include VA escape clauses protecting your earnest money if:
- Home doesn't appraise
- Home fails VA requirements
- You can't secure financing
Step 6: VA Appraisal and Underwriting
Timeline: 10-15 business days typically
- Order appraisal immediately after contract
- Address any repair requirements
- Provide any additional documentation requested
Step 7: Closing
VA loans often close in 30-45 days. Review our Closing Process Timeline for details.
Special VA Programs You Should Know
VA Streamline Refinance (IRRRL)
Refinance an existing VA loan with:
- No appraisal required
- No income verification
- No credit check (with some lenders)
- Can roll costs into loan
- Must lower rate by at least 0.5%
VA Cash-Out Refinance
Access up to 100% of home value for:
- Debt consolidation
- Home improvements
- Investment opportunities
- Emergency funds
Compare to conventional options in our Refinancing Guide.
Native American Direct Loan (NADL)
For Native American veterans buying on Federal Trust Land:
- Direct loan from VA
- No down payment
- No funding fee
- Limited to specific tribal lands
Adapted Housing Grants
- Specially Adapted Housing (SAH): Up to $109,986
- Special Housing Adaptation (SHA): Up to $22,036
- Temporary Residence Adaptation (TRA): Up to $44,299
Common VA Loan Myths Debunked
Myth: VA Loans Take Forever
Reality: Average 30-45 days, same as conventional loans with experienced lenders.
Myth: Sellers Don't Like VA Offers
Reality: In normal markets, VA offers are competitive. Education and strong pre-approval help.
Myth: You Can Only Use It Once
Reality: Reusable benefit. Can have two VA loans simultaneously in some cases.
Myth: Only for First-Time Buyers
Reality: Use at any point in life, multiple times.
Myth: Can't Buy Fixer-Uppers
Reality: VA Renovation loans available for properties needing work.
Maximizing Your VA Benefit: Advanced Strategies
Strategy 1: Second-Tier Entitlement
Keep first VA loan as rental, use remaining entitlement for new purchase. Build wealth through real estate while maintaining low VA rates.
Strategy 2: Geographic Arbitrage
Buy in lower-cost areas where VA loan limits don't matter, rent out property when PCS moves occur.
Strategy 3: Assumptions for Profit
In rising rate environments, your assumable low-rate VA loan becomes a valuable selling point, potentially commanding premium prices.
Strategy 4: Energy Efficient Mortgage
Add up to $6,000 for energy improvements to your loan amount, reducing long-term costs.
State-Specific VA Benefits
Many states offer additional benefits:
Texas
- Property tax exemptions for disabled veterans
- Hazlewood Act education benefits
California
- CalVet home loans (additional option)
- Property tax exemptions
Illinois
- Veterans' Homestead Exemption
- Reduced vehicle registration
Check our upcoming State-by-State guide for complete details.
Resources for Veterans
Financial Counseling
- VA Financial Counselors (free)
- Military OneSource (free financial planning)
- Veterans Service Organizations (VSOs)
Housing Assistance
- HUD-VASH program for at-risk veterans
- Supportive Services for Veteran Families (SSVF)
- Veterans Community Living Centers
Dispute Resolution
- VA Regional Loan Centers
- VA Ombudsman
- Congressional representatives
Making Your Decision: VA vs Other Loans
Compare your options using our detailed guides:
- Calculate affordability with the 28/36 rule
- Use our mortgage calculator for payment comparisons
- Compare renting vs buying in your area
Action Steps for Veterans
- Confirm Eligibility: Get your COE today at VA.gov
- Check Your Credit: Know your score before applying
- Calculate Affordability: Use residual income guidelines
- Get Multiple Quotes: Compare 3-5 VA lenders
- Understand the Market: Research your target area
- Prepare Documents: Gather all required paperwork
- Start Shopping: Work with VA-experienced agents
The Bottom Line for Veterans
Your VA loan benefit is one of the most powerful wealth-building tools available. Zero down payment, no PMI, and competitive rates make homeownership accessible immediately—not years from now.
Don't let myths or misunderstandings keep you from using this earned benefit. Whether you're active duty facing PCS moves or a veteran ready to settle down, the VA loan adapts to your needs.
You served your country. Now let your country serve you by making homeownership affordable and accessible. Start your VA loan journey today—your future self will thank you for building equity instead of paying rent.
Ready to explore your options? Check if you should buy now or wait, and understand the true costs of homeownership to make an informed decision.