VA loans are one of the best mortgage benefits available to U.S. military members. Zero down payment, no PMI, and often the lowest rates on the market. Here’s how to use your benefit.
VA Loan Benefits at a Glance
| Benefit | Details |
|---|---|
| Down payment | $0 required |
| Private mortgage insurance (PMI) | None |
| Interest rates | Typically 0.25-0.5% lower than conventional |
| Credit score minimum | No VA minimum (lenders typically require 620+) |
| Closing costs | Limited by VA; seller can pay up to 4% |
| Prepayment penalty | None |
| Loan limits | None for full entitlement |
| Assumable | Yes—buyer can assume the VA loan |
| Funding fee | 1.25-3.3% (one-time, can be financed) |
| Number of times you can use it | Unlimited (entitlement can be restored) |
Eligibility Requirements
Minimum Service Requirements
| Service Type | Minimum Service | Certificate of Eligibility |
|---|---|---|
| Active duty (wartime) | 90 consecutive days | DD-214 |
| Active duty (peacetime) | 181 consecutive days | DD-214 |
| Currently active duty | 90 days (can be less during wartime) | Statement of service from commander |
| National Guard | 90 days active duty OR 6 years in Guard | DD-214 or NGB Form 22 |
| Reserves | 90 days active duty OR 6 years in Reserves | DD-214 or proof of service |
| Surviving spouse | Spouse died in service or from service-connected disability | VA Form 26-1817 |
Who Is NOT Eligible
| Not Eligible | Alternative |
|---|---|
| Civilians with no military service | FHA, conventional, USDA loans |
| Veterans with dishonorable discharge | May appeal discharge status |
| Guard/Reserve with < 6 years and no active duty | Complete 6 years or serve 90 days active duty |
| Ex-spouses after divorce | Eligibility ends with marriage |
VA Funding Fee (2026)
The funding fee is a one-time charge that helps fund the VA loan program:
First-Time Use
| Down Payment | Active Duty/Veteran | National Guard/Reserves |
|---|---|---|
| 0% down | 2.15% | 2.40% |
| 5-9.99% down | 1.50% | 1.75% |
| 10%+ down | 1.25% | 1.50% |
Subsequent Use
| Down Payment | Active Duty/Veteran | National Guard/Reserves |
|---|---|---|
| 0% down | 3.30% | 3.30% |
| 5-9.99% down | 1.50% | 1.75% |
| 10%+ down | 1.25% | 1.50% |
Funding Fee Exemptions
| Exempt Group | Fee |
|---|---|
| Veterans receiving VA disability compensation | $0 |
| Surviving spouse receiving DIC benefits | $0 |
| Purple Heart recipients (active duty) | $0 |
| Veterans eligible for disability but receiving retirement pay | $0 |
Funding Fee In Dollars
| Loan Amount | First Use (0% Down) | Subsequent Use (0% Down) | With 10% Down |
|---|---|---|---|
| $200,000 | $4,300 | $6,600 | $2,500 |
| $300,000 | $6,450 | $9,900 | $3,750 |
| $400,000 | $8,600 | $13,200 | $5,000 |
| $500,000 | $10,750 | $16,500 | $6,250 |
VA Loan vs. Other Mortgage Types
| Feature | VA Loan | FHA Loan | Conventional |
|---|---|---|---|
| Min. down payment | 0% | 3.5% | 3-5% |
| Mortgage insurance | None | UFMIP + annual MIP | PMI until 78-80% LTV |
| Min. credit score (VA/FHA min) | None (lender: 620) | 580 | 620 |
| Funding/guarantee fee | 2.15% first use | 1.75% UFMIP | None |
| Interest rate | Lowest | Low | Moderate |
| Loan limits | None (full entitlement) | $498,257-$1,149,825 | $766,550 (conforming) |
| Property types | Primary residence | Primary residence | Primary, second, investment |
| Seller concessions | Up to 4% | Up to 6% | 3-9% |
Monthly Payment Comparison: $350,000 Home
| Cost | VA (0% Down) | FHA (3.5% Down) | Conventional (5% Down) |
|---|---|---|---|
| Down payment | $0 | $12,250 | $17,500 |
| Loan amount | $350,000 | $337,750 + $5,911 UFMIP | $332,500 |
| Funding fee/UFMIP | $7,525 (financed) | $5,911 (financed) | $0 |
| Total loan | $357,525 | $343,661 | $332,500 |
| Rate | 6.25% | 6.5% | 6.75% |
| P&I | $2,201 | $2,173 | $2,156 |
| MI/MIP | $0 | $155/month | $139/month |
| Total monthly | $2,201 | $2,328 | $2,295 |
VA loan wins: lowest monthly payment despite 0% down and no PMI.
VA Loan Entitlement
Full vs. Reduced Entitlement
| Type | Situation | Loan Limit |
|---|---|---|
| Full entitlement | No existing VA loans; or previous VA loans fully paid and entitlement restored | No limit |
| Reduced entitlement | One VA loan currently active (haven’t sold or paid off) | County conforming limit applies |
Restoring Entitlement
| Scenario | Entitlement Restored? |
|---|---|
| Sold the home, paid off the VA loan | Yes—one-time restoration |
| Refinanced out of VA loan into conventional | Yes |
| Still own the home with VA loan | No—must sell or pay off first |
| Assumed by another veteran | Yes, if buyer substitutes their entitlement |
The VA Loan Process
| Step | Action | Timeline |
|---|---|---|
| 1 | Get your Certificate of Eligibility (COE) | Instant online or 1-2 weeks by mail |
| 2 | Get pre-approved with a VA-approved lender | 1-3 days |
| 3 | Find a home and make an offer | Varies |
| 4 | VA appraisal ordered | 5-10 business days |
| 5 | Underwriting and loan processing | 2-4 weeks |
| 6 | Closing | 30-45 days total from offer |
VA Appraisal Requirements
| Requirement | What the VA Appraiser Checks |
|---|---|
| Market value | Home must be worth the purchase price |
| Minimum Property Requirements (MPRs) | Safe, sanitary, structurally sound |
| Adequate heating/cooling | Must have functional HVAC |
| Roof condition | Must have at least 3 years of remaining life |
| Pest inspection | Required in most areas (termites, etc.) |
| No lead paint hazards | Peeling paint in pre-1978 homes must be addressed |
| Safe water supply | Well water must be tested |
If the Appraisal Comes in Low
| Option | Details |
|---|---|
| Negotiate with seller | Ask seller to lower the price to appraised value |
| Pay the difference | Cover the gap in cash (above the loan amount) |
| Request a Reconsideration of Value | Provide comparable sales to challenge the appraisal |
| Walk away | VA loans allow this without penalty |
VA Loan Myths
| Myth | Reality |
|---|---|
| “VA loans are only for first-time buyers” | No—you can use VA benefits repeatedly |
| “VA loans take forever to close” | Average is 30-45 days, same as conventional |
| “Sellers don’t like VA offers” | Less true now; VA offers are often competitive |
| “You need perfect credit” | No—620 is a common lender minimum |
| “You can only use it once” | Entitlement can be restored and reused |
| “VA loans are only for houses” | VA covers houses, condos (VA-approved), and manufactured homes |