VA Loans

One-line summary: Mortgage loans guaranteed by the Department of Veterans Affairs for eligible active-duty service members, veterans, and surviving spouses, no down payment required, no monthly mortgage insurance, and competitive rates.

Best for

Active-duty military, veterans, National Guard and Reserve members who meet service eligibility requirements, and qualifying surviving spouses. Particularly powerful for buyers without a large down payment, since VA loans typically require zero down on most purchases.

Key terms (typical)

Attribute	Typical Range
Eligible borrowers	Active-duty, veterans, National Guard/Reserve, eligible surviving spouses
Down payment	Zero down on most purchases up to county loan limits
Credit score	No VA minimum; lenders typically require 580–620+
Loan limits	No VA loan limit for borrowers with full entitlement; county limits apply if entitlement is reduced
Mortgage insurance	None, no PMI or monthly MI
Funding fee	One-time fee (2.15% – 3.30% of loan amount typical), can be financed; exempt for service-connected disability
Term	15 or 30 years fixed; some ARM options
Property type	1–4 unit primary residence

Why borrowers choose this program

• Zero down payment. VA loans are one of the few programs that allow 100% financing on a purchase, eliminating the need to save a down payment.
• No mortgage insurance. Unlike FHA or low-down-payment conventional, VA has no monthly mortgage insurance, meaningful monthly savings over the life of the loan.
• Competitive rates. VA rates are typically among the lowest available, often inside conventional pricing for comparable credit profiles.
• Flexible qualifying. VA underwriting is more accommodating on debt-to-income, residual income, and credit history than conventional.
• No prepayment penalty. Pay extra, pay off early, or refinance without penalty.

Considerations

• Funding fee. Most VA borrowers pay a one-time funding fee (financed into the loan). Veterans with service-connected disabilities are exempt.
• Property requirements. VA appraisal includes a Minimum Property Requirements review, similar to FHA. Properties with significant condition issues may not qualify.
• Primary residence only. VA loans must be used for a primary residence. They cannot be used for investment property purchases (though buying a 2–4 unit and living in one unit is allowed).
• Entitlement. Borrowers using VA for a second time, or after a previous VA loan default, may have reduced entitlement affecting loan limits.