VA loans are arguably one of the most valuable civilian-side perks of military service. While VA loans reward eligible borrowers with unbeatable benefits—including a 0% down payment and no mortgage insurance—navigating the program’s complexities may still feel overwhelming.
We’ll cover what a VA loan is, how to get one, what the requirements are to get approved, and how to know if it’s the best option for you.
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What is a VA loan?
A VA home loan is a mortgage that is guaranteed by the U.S. Department of Veterans Affairs (VA). It’s important to note that the VA is not the lender. Instead, the loan is originated and funded by private lenders. See our top recommendations for VA loan lenders.
Because the government guarantees a portion of the loan, the lender is protected against loss if the borrower defaults. That’s why they can offer exceptionally favorable terms, such as 0% down payments and competitive interest rates. In fact, using a VA loan is one of the best ways to buy a house with no money down.
Pros
- No down payment: Eligible veterans can immediately transition to homeownership with no out-of-pocket down payment.
- Lower rates: Government backing usually secures lower rates than other loan types.
- Easier qualification: VA loans have less stringent DTI and credit requirements compared to conventional loans.
- Assumability: This can be a valuable negotiation tool when selling in a high-rate market.
Cons
- VA funding fee: This is a one-time fee added to the loan balance (1.25%-3.3%, depending on your loan size).
- Primary residence requirement: You cannot use a VA loan to buy an investment property or a vacation home.
- Appraisal process: The VA appraisal can be stricter regarding property conditions than a conventional appraisal.
Do I need to work with a specific lender? No, most large private lenders participate in the VA home loan program. We recommend shopping around to compare rates, terms and options to find the best match. Here are our top recommendations of where to start with VA loan lenders.
How to get a VA loan
Do you have the required service history and financial profile to get approved? Here’s a quick summary of the requirements when applying for a VA loan:
Service eligibility
Eligibility is based on your service length and history. Generally, you are eligible if you have completed at least:
- 90 days of active duty service (during wartime);
- 181 days of active duty service during peacetime;
- 6 years in the National Guard or Selected Reserve;
- OR you are the spouse of a service member who died in the line of duty or from a service-related disability.
There are other situations in which you may qualify for a VA loan (for example, if you were discharged under a qualifying exception). See the full eligibility list here.
To apply for a VA loan, you need to present your lender with a Certificate of Eligibility (COE). In some cases, you may be able to get it automatically, but if not, you can request it online via the VA’s eBenefits portal.
Credit score
While the VA does not set a minimum credit score requirement for approval, individual lenders still set their own credit score limits. Typically, you need a score of at least 620 to qualify, but some lenders are willing to work with slightly lower scores.[1]
Down payment
One of the biggest perks of the VA program is that the down payment can be as low as 0%. Qualifying borrowers can buy homes with absolutely no money down.
However, you can make a down payment if you choose, and it may be a good move. Putting money down can lower your overall costs and save you money in the long run, by reducing the VA funding fee and potentially securing a better interest rate.
Funding fee
One special feature of the VA loan is the funding fee — a one-time charge that supports the program and is paid at closing. This fee depends on your loan’s size and type and whether you’ve used the benefit before. It usually ranges between 1.25% and 3.3%.[2]
Residual income
Unlike conventional loans that focus heavily on debt-to-income (DTI) ratios, the VA uses a unique concept called residual income. This is the amount of take-home pay you have left after paying your mortgage and major debts each month, and the minimum amount varies by region and family size. You can use a residual income calculator to see if you qualify.
VA loan types
There are multiple VA-backed loans designed for different needs and applicants. With them, veterans can not only purchase a home but also use certain loans for home upgrades or to refinance for more favorable terms.
| Type | Description |
|---|---|
| Purchase loan | The standard mortgage used to buy a primary residence with a 0% down. |
| Interest Rate Reduction Refinance Loan (IRRRL) | A loan used to replace an existing VA loan with a new one that offers better conditions. Requires minimal paperwork and comes with no appraisal. |
| Native American Direct Loan (NADL) | A loan for Native American veterans (or veterans married to a Native American) to buy or build homes on the Federal Trust Land. |
| Adapted Housing Grant | Grants for veterans and service members with specific service-connected disabilities to buy or modify a home that meets their accessibility needs. |
| Cash-out refinance | A loan that allows a veteran to replace their current mortgage with a new VA-backed loan and convert some part of their home equity into cash. |
How many times can you use a VA loan?
Another benefit of a VA loan is that it’s not a one-time deal. You can use a VA loan as many times as you want throughout your life, provided it is used to buy a primary residence.
VA loan entitlement, explained
If you decide to take out a VA loan while having another active one, you need to know about entitlement. Think of a VA entitlement as an insurance policy for your lender — the specific amount the VA guarantees to pay the bank if you default.
- Full entitlement: You have it if you have no active VA loans. The VA promises to cover 25% of your loan amount, no matter the price. This means you can buy a home of any cost with 0% down, provided you qualify for the monthly payments.
- Partial entitlement: You have this if you still have another active VA loan (for example, a home you kept as a rental). You can use a VA loan to buy a new home, but because some of the VA “insurance” is tied up in the first property, you may face a loan limit or need a down payment for the second one.
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VA assumable loan: A hidden asset
A VA loan is assumable, meaning it can be transferred to a buyer — even if they are not a veteran — with its existing rates and terms. This feature is a massive selling point in a high-interest-rate environment.
For example, if a veteran seller has a 3% interest rate from a few years ago, a buyer can take over that existing mortgage rather than taking out a new one at current market rates (e.g., 6.5%).
However, VA loan assumability comes with its own intricacies:
- The gap: The buyer must cover the difference between the purchase price and the loan balance in cash.
- Approval: Both VA and the lender must approve the loan’s assumption and the particular buyer.
- Tied entitlement: If you sell to a non-veteran, your entitlement status remains tied to that loan until it is paid off.
VA loan vs. FHA loan
Both VA and FHA loans are government-backed, but they serve different borrowers. FHA loans are available to a wide range of homebuyers, while VA loans are exclusive to the military community.
| Feature | VA loan | FHA loan |
|---|---|---|
| Minimum down payment | 0% | 3.5% |
| Minimum credit score | 620 (lenders could consider less) | 580 |
| Mortgage insurance | None | MIP (removed after 11 years if down payment is > 10%). |
| Funding fee | 1.25%-3.3% | 1.75% |
| Property type | Primary residence only | Primary residence only |
| Loan limits | None | $524,225 in low-cost areas |
🤔 If you are eligible for a VA loan, it’s likely to be superior to an FHA loan. The lack of monthly mortgage insurance makes it cheaper; what’s more, VA loans historically have slightly lower interest rates. An FHA loan is generally a backup option for veterans who cannot qualify for a VA loan due to credit score issues or entitlement limitations.
VA loan vs. conventional loan
If a veteran has strong credit and significant savings for a down payment (closer to 20%), the choice between a VA loan and a conventional loan can be tough.
| Feature | VA loan | Conventional loan |
|---|---|---|
| Minimum down payment | 0% | 3% |
| Minimum credit score | 620 | 620 |
| Mortgage insurance | None | PMI (ends at 20% equity) |
| Property type | Primary residence only | Primary, secondary, and investment properties |
| Loan limits | None | $806,500 in most areas in 2025 |
🤔 Thanks to the 0% down payment requirement, a VA loan provides an immediate path to homeownership. It also usually wins on lower interest rates and the absence of PMI. However, if you want to buy an investment or vacation home, you must use a conventional loan, since VA loans are strictly for primary residences.
VA loan FAQ
If my father was a veteran can I get a VA loan?
No, generally, you cannot purchase a home with a VA loan if your parent is a veteran. It is exclusive to veterans themselves and, in some cases, surviving spouses. The only exception is a joint VA loan, in which you buy a home with your father as a co-borrower, provided he occupies the home as his primary residence.
Do I need a down payment for a VA loan?
No, it’s possible to purchase a home with 0% down. However, a down payment may be required in certain situations, for example, if the purchase price exceeds the appraised value, or if your lender requires it because of credit issues.
What is the Trump VA loan reform of 2025?
This act, signed by President Trump in July 2025, established a Partial Claim Program. This allows veterans facing financial hardships to move missed mortgage payments to the back of their loan as a 0% interest second lien (paid when the home is sold or refinanced) to prevent foreclosure.
Disclaimer: The information provided in this article is for informational purposes only. It is not intended as legal, financial, investment, or tax advice, and should not be relied upon as such. Consult a licensed financial advisor or tax professional regarding your personal financial situation before making any decisions.