VA Loan
A VA loan is a mortgage benefit for active-duty service members, veterans, and eligible surviving spouses, guaranteed by the U.S. Department of Veterans Affairs. VA loans offer no down payment, no private mortgage insurance, competitive rates, and more flexible qualification standards. The VA guarantee protects lenders from default losses.
VA loans are arguably the best mortgage product available in America for those who qualify. The combination of zero down payment, no PMI, and competitive rates (often 0.25–0.50% below conventional) creates significant savings. VA loans are available through any VA-approved direct lender, and working directly with a lender who specializes in VA loans can help ensure the appraisal and funding fee process goes smoothly. On a $400,000 home, a VA loan vs. a conventional loan with 3.5% down could save a veteran $350–$450/month in the first year when eliminating PMI alone.
To be eligible, you generally need 90 days active service during wartime, 181 days during peacetime, 6 years in the Reserves or National Guard, or be the spouse of a service member who died in service or from service-connected disability. Get your Certificate of Eligibility (COE) through the VA website, your lender, or the eBenefits portal.
VA loans have a funding fee: 1.25–3.3% of the loan amount depending on your down payment and whether it's your first VA loan. First-time users with no down payment pay 2.15%; subsequent use is 3.3%. Veterans with a service-connected disability rating of 10% or more are exempt from the funding fee. The fee can be rolled into the loan. VA loans require a VA appraisal and the property must meet VA's Minimum Property Requirements (MPR) for safety and livability.
Key Takeaway
A VA loan is a mortgage benefit for active-duty service members, veterans, and eligible surviving spouses, guaranteed by the U.S. Department of Veterans Affairs. VA loans offer no down payment, no private mortgage insurance, competitive rates, and more flexible qualification standards. The VA guarantee protects lenders from default losses.
Related Terms
Frequently Asked Questions
Yes. VA loan benefit is reusable. After paying off one VA loan, full entitlement is restored. You can also have two VA loans simultaneously in some circumstances (using remaining entitlement). The funding fee is higher on subsequent uses.
A one-time fee ranging from 0.5% to 3.3% of the loan amount, depending on down payment and prior VA loan use. Veterans with 10%+ service-connected disability ratings are exempt. The fee can be financed into the loan.
No, with full entitlement you can borrow up to the conforming limit ($766,550 in most areas) with zero down. Above the conforming limit, a down payment of 25% of the amount over the limit is required. VA loans have no PMI regardless of down payment.
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