A VA-backed home loan may help eligible Veterans, active-duty service members, qualifying National Guard or Reserve members, and eligible surviving spouses purchase, build, improve or refinance a primary residence.
A personalized review can help verify your Certificate of Eligibility, available entitlement, possible no-down-payment financing, funding-fee status, estimated payment, closing costs, property requirements and documents needed.
Assistance is not guaranteed. Program funding, eligibility, amount, repayment terms, mortgage compatibility, property requirements, and availability vary.
A conventional mortgage may be worth considering when you have a reasonable amount of credit history, with more than a couple of creditors, and a FICO score above 700 typically. FHA, USDA, or VA government-backed loans are more flexible without the above conventional financing underwriting standards.
A Certificate of Eligibility, commonly called a COE, shows that the applicant meets VA’s service-related eligibility requirement and displays entitlement information.
A participating lender may often request the COE electronically.
Eligible borrowers with sufficient entitlement may be able to purchase without a down payment when the sales price does not exceed the VA-established reasonable value and the borrower satisfies lender and VA requirements.
A down payment may still be needed when:
VA does not set one universal minimum credit score for VA-backed home loans.
Private lenders may establish minimum scores and additional credit requirements.
The borrower must have stable, sufficient income.
VA underwriting considers debt-to-income ratio and residual income remaining after major monthly obligations.
VA-backed purchase financing is generally for an eligible borrower’s primary residence.
An eligible one- to four-unit property may qualify when the borrower occupies one unit.
VA-backed home loans do not require monthly private mortgage insurance or FHA mortgage insurance premiums.
A one-time VA funding fee may apply unless the borrower qualifies for an exemption.
Borrowers with full entitlement are not subject to a VA county loan limit.
Borrowers with partial entitlement may require a county conforming-limit and guaranty calculation.
A VA-backed home loan is made by a participating private lender and partially guaranteed by the U.S. Department of Veterans Affairs.
VA generally does not provide the purchase-loan funds directly. The guaranty reduces part of the lender’s risk and may help eligible borrowers obtain favorable terms.
The borrower remains responsible for:
Most VA home loans are VA-backed loans from private lenders.
The Native American Direct Loan program is different. Under NADL, VA may lend directly to eligible Native American Veterans or qualifying spouses to buy, build or improve a home on federal trust land.
VA service eligibility can apply to certain:
Eligibility depends on:
Current service members may generally meet the minimum active-duty requirement after at least 90 continuous days. Veteran requirements vary based on the period of service.
Do not rely only on a general wartime or peacetime checklist. Request a COE or verify the current VA eligibility criteria.
Certain surviving spouses may qualify, including some spouses of service members or Veterans who:
Remarriage, age, dates and benefit status can affect eligibility.
The surviving spouse must obtain a COE.
A COE is a VA-issued document used to confirm service-related eligibility for the home-loan benefit.
The COE may show:
A COE does not guarantee mortgage approval.
A COE may be requested:
A DD214 generally documents a Veteran’s release or discharge and service history.
It can help establish eligibility, but it is not the same as a COE.
Not every applicant uses a DD214:
A borrower may have full entitlement when the COE shows no entitlement charged or when entitlement has been restored.
With full entitlement, VA does not impose a county loan limit. The lender still determines the approvable amount based on:
A borrower may have partial entitlement when:
County conforming limits may affect the guaranty and possible down-payment calculation.
The VA home-loan benefit may be used more than once.
Reuse can depend on:
A qualified borrower with sufficient entitlement may be able to finance up to the lower of the sales price or appraised reasonable value without a down payment.
Do not describe no-down-payment financing as automatic.
VA-backed home loans do not require monthly PMI or FHA MIP.
This can reduce the monthly payment compared with another low-down-payment loan, but the complete cost must still be compared.
Because VA guarantees part of the loan, participating lenders may offer competitive terms.
VA does not set:
Compare multiple Loan Estimates using the same assumptions.
VA restricts certain fees and charges that may be paid by the borrower.
The actual permitted costs depend on:
VA-backed home loans generally do not impose a penalty for paying the mortgage ahead of schedule.
Eligible borrowers may use VA financing more than once when entitlement is available or restored.
An eligible purchaser may assume an existing VA-backed loan with servicer or lender approval.
Important considerations include:
A funding fee may increase the loan balance or cash needed.
The fee does not apply to qualifying exempt borrowers.
Standard VA purchase financing is not intended for an ordinary second home or non-owner-occupied investment purchase.
The property must meet VA appraisal and Minimum Property Requirements.
A home needing major repairs may require correction, specialized financing or another loan program.
When the sales price exceeds the VA-established reasonable value, the borrower may need to renegotiate, request reconsideration of value, pay the difference or terminate under the VA escape clause.
VA eligibility and lender approval are separate.
The COE establishes service-related eligibility. The lender still evaluates the ability to repay.
VA does not establish a universal minimum credit score.
The lender may evaluate:
Income must be:
Potential qualifying sources may include:
Employment and income history are evaluated based on the full circumstances.
Active-duty separation dates, reenlistment, civilian job offers, military retirement, relocation and expected continuance may require additional documentation.
VA underwriting does not rely on one promised maximum ratio.
The lender considers:
Residual income is the income remaining after major monthly obligations and estimated maintenance and utility expenses.
VA residual-income guidelines vary by:
A borrower can have an acceptable DTI and insufficient residual income, or a higher DTI with strong residual income and compensating factors. Final approval remains an underwriting decision.
The lender may review:
A no-down-payment VA purchase may be possible when:
A down payment may be required when:
No VA county loan limit does not mean unlimited borrowing.
The lender determines the available amount using:
When entitlement is already charged, the lender evaluates:
The calculation should be completed using the current COE and property county.
The VA-backed loan generally cannot cover the amount by which the purchase price exceeds the VA-established reasonable value.
The buyer may:
The VA funding fee is a one-time charge that helps support the home-loan program.
The funding fee may be:
Financing the fee increases the loan balance and interest paid over time.
| Use | Down Payment | Funding Fee |
|---|---|---|
| First Use | Less than 5% | 2.15% |
| First Use | 5% or more | 1.50% |
| First Use | 10% or more | 1.25% |
| Subsequent Use | Less than 5% | 3.30% |
| Subsequent Use | 5% or more | 1.50% |
| Subsequent Use | 10% or more | 1.25% |
| Loan Type | Funding Fee |
|---|---|
| IRRRL | 0.50% |
| Cash-out Refinance, First Use | 2.15% |
| Cash-out Refinance, Subsequent Use | 3.30% |
| VA Loan Assumption | 0.50% |
| Manufactured Home Not Permanently Affixed | 1.00% |
Rates are subject to legislative or VA change. Verify the current chart before quoting.
Possible exemptions include qualifying borrowers who:
A borrower who receives a qualifying retroactive disability award with an effective date before closing may be eligible for a funding-fee refund.
VA determines refund eligibility.
Do not promise a refund until VA confirms it.
Potential VA purchase costs can include:
The borrower should review the Loan Estimate and Closing Disclosure.
On a VA purchase or construction-permanent loan, the VA funding fee may generally be financed.
Other closing costs cannot simply be added to the purchase loan above the permitted amount. They may be paid through:
VA allows buyers and sellers to negotiate payment of eligible ordinary closing costs.
The credit cannot exceed the actual permitted charges.
Eligible assistance may help with approved costs when the VA loan and assistance program permit the structure.
VA separately limits seller concessions to no more than 4% of the property’s reasonable value.
Concessions may include certain:
Ordinary closing costs and defined concessions are not the same category.
VA-backed purchase financing is generally for a home the eligible borrower will personally occupy.
Ordinary second homes and non-owner-occupied investment purchases are not standard VA purchase uses.
The borrower must certify an intent to occupy within a reasonable time under VA requirements.
Deployment, retirement, separation, dependent occupancy, spouse occupancy and other circumstances may require additional review.
An eligible borrower may purchase:
The borrower generally occupies one unit.
Rental income from other units may be considered when properly documented and permitted.
A condominium unit generally must be in a VA-approved project unless another current approval path applies.
Check the VA condominium database before relying on eligibility.
VA-backed financing may support eligible new construction.
The builder, warranty, plans, inspections, property and lender program must satisfy current requirements.
A property with limited business use may require specific review. The property must remain primarily residential and suitable for the borrower’s occupancy.
A borrower cannot use standard VA purchase financing solely to acquire a non-owner-occupied rental property.
An owner-occupied multi-unit purchase is different because the borrower resides in the property.
The VA appraisal helps establish:
A VA appraisal is not:
Buyers should consider an independent home inspection.
VA MPRs address broad areas such as:
Not every cosmetic issue causes VA ineligibility.
When required, repairs may be:
If the appraiser expects the value may be below the contract price, the lender or designated contact may have an opportunity to provide relevant comparable sales during the Tidewater process.
After a Notice of Value is issued, a reconsideration of value may be available when valid market evidence supports a different conclusion.
When required, the VA escape clause allows the buyer to avoid forfeiting earnest money solely because the property’s reasonable value is lower than the purchase price.
The buyer may still choose to:
Do not upload sensitive financial or identity documents through an unsecured form. Use the approved mortgage application or secure document portal.
An eligible borrower may use a VA-backed purchase loan to buy a qualifying primary residence.
Possible property uses include:
An IRRRL may help refinance an existing VA-backed loan to reduce the payment or make the payment more stable.
Requirements can include:
An IRRRL funding fee is currently 0.50% unless exempt.
A VA-backed cash-out refinance may:
The borrower must generally occupy the home.
A larger mortgage can increase:
Specialized VA construction or construction-to-permanent financing may be available through participating lenders.
Possible requirements include:
Not every VA lender offers construction financing.
Eligible financing may support purchasing and improving a home when offered by a participating lender and approved under VA requirements.
Contractor, repair, appraisal and escrow requirements may apply.
Eligible energy-efficiency improvements may be included under applicable VA rules and lender programs.
Eligible Native American Veterans and qualifying spouses may use NADL to buy, build or improve a home on federal trust land.
A qualified buyer may assume a VA-backed loan with approval.
The seller should confirm:
The exact checklist depends on service status, COE, income, assets, credit, entitlement, property, loan purpose and underwriting findings.
Possible documents:
Common items:
Depending on income type:
Possible documents:
Possible documents:
Possible documents:
Every borrower whose income, assets, credit or entitlement is used provides the applicable documentation.
A non-Veteran spouse can often be included, but other joint-loan structures may require special review and can affect the guaranty.
Do not publish one mandatory document list for every applicant.
Do not upload sensitive financial or identity documents through an unsecured form. Use the approved mortgage application or secure document portal.
Review the applicant’s military or surviving-spouse category.
Request or retrieve the COE.
Determine whether the borrower has:
Provide information about:
Compare:
Use the same purchase price, rate assumptions, term and closing date.
The lender evaluates:
A preapproval is conditional and does not guarantee final approval.
The property should:
Work with the real estate agent to address:
The lender requests the VA appraisal through the applicable VA system.
The lender verifies:
Possible actions include:
Avoid before closing:
Review:
Sign the documents, provide required funds and complete funding and recording conditions.
| Feature | VA | Conventional | FHA | USDA |
|---|---|---|---|---|
| Government Status | VA guarantees part of loan | Not federally insured or guaranteed | FHA insured | USDA guaranteed |
| Eligibility | Qualifying service or surviving-spouse eligibility plus lender approval | Borrower and property underwriting | Borrower, property and FHA underwriting | Income, property-location and underwriting requirements |
| Potential Down Payment | May be 0% with sufficient entitlement and acceptable value | As low as 3% for eligible programs | As low as 3.5% for eligible borrowers | May provide 100% financing for eligible borrower and property |
| Monthly Mortgage Insurance | No PMI or FHA MIP | PMI generally above 80% LTV | Annual MIP normally applies | Annual guarantee fee may apply |
| Upfront Fee | VA funding fee unless exempt | No government funding fee | Upfront MIP | Upfront guarantee fee |
| Credit Score | VA has no universal minimum; lender rules apply | Program and lender requirements | FHA framework plus lender requirements | USDA and lender requirements |
| Occupancy | Primary residence | Primary, qualifying second home or investment property | Primary residence | Eligible primary residence |
| Property Location | No general rural restriction | No general rural restriction | No general rural restriction | Eligible rural area required |
| Income Limit | No general VA program income cap | Standard conventional usually has no cap | No general FHA income cap | Household-income limits apply |
| Loan Limit | Full entitlement has no VA county limit; partial entitlement may use county calculation | Conforming county limits or jumbo | FHA county and unit limits | Program and lender limits |
| Seller Concessions | Defined concessions capped at 4%; closing-cost credits treated separately | Program-specific limits | Interested-party contributions subject to FHA limits | USDA requirements |
| Refinancing Options | IRRRL and cash-out | Rate-term and cash-out | Streamline and cash-out | Streamlined and other USDA options |
A VA borrower may not need assistance for the minimum down payment, but eligible assistance may help with permitted closing costs or other approved expenses.
A personalized VA review can help determine:
All loans are subject to borrower, credit, income, residual-income, debt, asset, entitlement, occupancy, property, appraisal and underwriting approval. VA service eligibility and a Certificate of Eligibility do not guarantee lender approval. Funding-fee rates, exemptions, entitlement calculations, lender overlays, rates, fees and program requirements may change. This information is educational and is not a commitment to lend. Equal Housing Opportunity.
Qualifying Veterans, active-duty service members, certain National Guard and Reserve members, eligible surviving spouses and other statutory beneficiaries may qualify for a COE.
Service requirements depend on dates, duty status, length of service, discharge and qualifying exceptions.
A COE is a VA-issued document confirming service-related eligibility and showing entitlement information.
It does not guarantee lender approval.
Not every applicant needs a DD214.
A DD214 may be used for an applicable Veteran. Active-duty, Guard, Reserve and surviving-spouse applicants use other documentation.
VA does not set one universal minimum credit score.
Private lenders may establish minimum scores and additional credit requirements.
A down payment may not be required when the borrower has sufficient entitlement, the lender approves the loan and the purchase price does not exceed appraised reasonable value.
Partial entitlement, excess price or lender requirements can create a down-payment need.
Borrowers with full entitlement are not subject to a VA county loan limit.
Borrowers with partial entitlement may require a county conforming-limit and guaranty calculation.
No.
The lender still determines the approvable amount based on income, debts, credit, residual income, assets, property, purchase price and appraised value.
It is a one-time fee that supports the VA home-loan program.
The amount depends on loan type, down payment and first or subsequent use. Exempt borrowers do not pay it.
The current published rate is 2.15% for a qualifying non-exempt purchase or construction borrower using the benefit for the first time.
The current published rate is 3.30% for a qualifying non-exempt purchase or construction borrower using the benefit after the first use.
Possible exemptions include certain borrowers receiving or eligible for service-connected disability compensation, qualifying Purple Heart recipients on active duty and eligible surviving spouses receiving DIC.
VA or the COE must confirm the exemption.
VA-backed loans do not require monthly PMI or FHA MIP.
The one-time funding fee may apply.
Buyers and sellers may negotiate eligible closing-cost credits.
VA separately caps defined seller concessions at 4% of reasonable value.
Yes, an eligible borrower may purchase a qualifying duplex and occupy one unit.
Property, appraisal, income and underwriting requirements apply.
Standard VA purchase financing is not intended for a non-owner-occupied rental purchase.
An owner-occupied multi-unit property may qualify.
Yes, when entitlement remains available or is restored.
An outstanding VA loan or prior VA loss may affect the available entitlement.
Possibly, when the borrower has remaining entitlement and satisfies occupancy, relocation, guaranty, lender and underwriting requirements.
It is not automatic.
A spouse who is not independently VA eligible can generally be a co-borrower with the eligible Veteran.
Other joint-loan structures involving a non-spouse or non-eligible borrower can require special guaranty and underwriting treatment.
Yes, certain surviving spouses may qualify after VA confirms eligibility and issues a COE.
Yes, when the condominium project or unit satisfies current VA approval requirements.
Potentially, when the home, land, title, foundation, appraisal and lender program satisfy VA and lender requirements.
Specialized VA construction or construction-to-permanent financing may be available through participating lenders.
Not every lender offers it.
An Interest Rate Reduction Refinance Loan refinances an existing VA-backed mortgage and must satisfy net tangible benefit, seasoning, recoupment, payment and lender requirements.
A qualifying VA cash-out refinance may refinance an eligible non-VA mortgage into VA-backed financing.
Potentially, through a VA-backed cash-out refinance when the borrower, occupancy, equity, credit, income, property and lender requirements are satisfied.
VA-backed loans may be assumable by qualified purchasers with servicer or lender approval.
The seller should obtain release of liability and address entitlement substitution.
It protects an eligible buyer from being required to complete the purchase solely when the VA reasonable value is below the contract price, subject to the clause and transaction terms.
No.
The appraisal addresses value and observable Minimum Property Requirements. A separate inspection evaluates property condition for the buyer.
There is no universal timeline.
Timing depends on:
No.
Preapproval remains conditional on documentation, property, appraisal, entitlement, underwriting and closing conditions.
Loan Officer / Branch Manager
NMLS #1396861 · DRE #00853403
E Mortgage Capital, Inc. · NMLS #1416824
All loans are subject to credit, income, asset, property and underwriting approval. Program guidelines, loan limits, rates, costs and availability may change. This information is educational and is not a commitment to lend. Equal Housing Opportunity.
