Understanding how to get a VA loan can save veterans thousands of dollars on their home purchase. VA loans offer zero down payment, no private mortgage insurance, and competitive interest rates. These benefits make VA loans one of the best mortgage options available to eligible service members, veterans, and surviving spouses.
This guide covers everything veterans need to know about VA loans. It explains eligibility requirements, the application process, key benefits, and common mistakes to avoid. Whether someone is buying their first home or refinancing an existing mortgage, this information will help them make informed decisions.
Key Takeaways
- VA loans offer zero down payment, no PMI, and competitive interest rates—potentially saving veterans over $60,000 on a 30-year mortgage.
- To get a VA loan, start by obtaining your Certificate of Eligibility (COE) through the VA eBenefits portal, a VA-approved lender, or by mail.
- Eligibility for VA loans depends on military service history, with requirements varying for active-duty members, veterans, National Guard, and surviving spouses.
- Always compare rates from at least three VA-approved lenders, as a 0.25% rate difference can cost over $13,000 in extra interest over the loan’s life.
- Plan for the VA funding fee (1.25%–3.3% of the loan amount) and never skip a home inspection, even though the VA appraisal is required.
- VA loan benefits are reusable—veterans can use this program multiple times throughout their lives for primary residence purchases.
What Is a VA Loan and Who Qualifies
A VA loan is a mortgage program backed by the U.S. Department of Veterans Affairs. The VA doesn’t lend money directly. Instead, it guarantees a portion of the loan, which reduces risk for lenders. This guarantee allows lenders to offer better terms to borrowers.
VA loans exist to help veterans achieve homeownership. The program started in 1944 as part of the GI Bill. Since then, it has helped millions of service members buy homes.
Who qualifies for a VA loan?
Eligibility depends on military service history. The following groups may qualify:
- Active-duty service members with at least 90 consecutive days of service during wartime
- Active-duty service members with at least 181 days of service during peacetime
- National Guard and Reserve members with at least six years of service
- Veterans who meet the above service requirements
- Surviving spouses of service members who died in the line of duty or from a service-connected disability
Service members discharged due to hardship, government convenience, or service-connected disability may also qualify. But, those with dishonorable discharges typically cannot use the VA loan program.
The VA uses specific service dates to determine eligibility. For recent conflicts, service members need 90 continuous days of active service. The VA website lists all qualifying service periods.
Steps to Apply for a VA Loan
Getting a VA loan involves several key steps. The process is straightforward when borrowers know what to expect.
Obtain Your Certificate of Eligibility
The Certificate of Eligibility (COE) proves a veteran’s entitlement to VA loan benefits. This document is essential for the application process.
Veterans can obtain their COE through three methods:
- Online through the VA eBenefits portal – The fastest option. Most veterans receive instant results.
- Through a VA-approved lender – Many lenders can pull the COE directly during the application process.
- By mail using VA Form 26-1880 – This method takes the longest, typically several weeks.
The COE shows the borrower’s entitlement amount and confirms their eligibility status. Veterans should request this document early in the home-buying process.
Find a VA-Approved Lender
Not all lenders offer VA loans. Borrowers must work with lenders approved by the VA to participate in the program.
When choosing a lender, veterans should:
- Compare interest rates from multiple lenders
- Ask about closing costs and fees
- Check the lender’s experience with VA loans
- Read customer reviews and ratings
VA loan rates vary between lenders. Shopping around can save borrowers significant money over the life of the loan. Most experts recommend getting quotes from at least three lenders.
After selecting a lender, the borrower completes a loan application. The lender reviews income, credit history, and debt-to-income ratio. VA loans don’t require a minimum credit score set by the VA, but most lenders prefer scores of 620 or higher.
The lender then orders a VA appraisal. This appraisal ensures the property meets VA minimum property requirements and determines fair market value.
VA Loan Requirements and Benefits
VA loans come with specific requirements and substantial benefits. Understanding both helps borrowers prepare for success.
Key Requirements
VA loans require borrowers to meet certain standards:
- Primary residence – The property must be the borrower’s primary home. VA loans cannot be used for investment properties or vacation homes.
- VA appraisal – All properties must pass a VA appraisal, which checks for safety and livability issues.
- Stable income – Borrowers must demonstrate reliable income to repay the loan.
- Acceptable debt-to-income ratio – Most lenders prefer a ratio below 41%, though exceptions exist.
- VA funding fee – This one-time fee ranges from 1.25% to 3.3% of the loan amount, depending on down payment and service history.
Major Benefits
VA loans offer advantages that other mortgage programs cannot match:
- No down payment required – Borrowers can finance 100% of the home’s value. This benefit alone saves veterans thousands of dollars upfront.
- No private mortgage insurance (PMI) – Conventional loans require PMI when borrowers put down less than 20%. VA loans never require PMI, saving hundreds of dollars monthly.
- Competitive interest rates – VA loan rates typically run 0.25% to 0.5% lower than conventional loan rates.
- Limited closing costs – The VA limits what fees lenders can charge borrowers.
- No prepayment penalty – Borrowers can pay off their VA loan early without extra charges.
- Reusable benefit – Veterans can use their VA loan benefit multiple times throughout their lives.
These benefits make VA loans extremely valuable. A veteran buying a $300,000 home could save over $60,000 compared to a conventional loan with PMI over 30 years.
Common VA Loan Mistakes to Avoid
Many veterans make avoidable errors during the VA loan process. Learning from others’ mistakes can save time, money, and frustration.
Skipping the COE step
Some borrowers assume they qualify without verifying eligibility first. They start house hunting and make offers before confirming their VA loan benefits. This creates problems when the COE reveals issues with their entitlement. Veterans should always obtain their COE before shopping for homes.
Not shopping for lenders
Accepting the first lender’s offer is a costly mistake. VA loan rates and fees vary significantly between lenders. A difference of 0.25% in interest rate on a $250,000 loan equals over $13,000 in additional interest over 30 years.
Ignoring the VA funding fee
The funding fee surprises some borrowers at closing. This fee can range from $3,750 to $9,900 on a $300,000 loan. Veterans should plan for this expense or consider rolling it into the loan amount.
Waiving the home inspection
The VA appraisal checks for major safety issues but isn’t a thorough home inspection. Some veterans skip the inspection to save money. This decision can lead to expensive repairs after closing. A $400 inspection can prevent thousands in unexpected costs.
Maxing out the budget
Just because a lender approves a certain amount doesn’t mean the borrower should spend it all. Housing costs include more than the mortgage payment. Property taxes, insurance, maintenance, and utilities add up quickly. Smart borrowers leave room in their budget for these expenses.
Forgetting about remaining entitlement
Veterans who already have a VA loan may still have remaining entitlement for another purchase. Understanding how entitlement works helps veterans maximize their benefits.
