The VA home loan is a benefit available to qualified veterans who wish to purchase a home or refinance an existing mortgage. VA loans do not require a down payment for a home purchase.
If you're eligible, you could save thousands in upfront costs and get better terms and conditions than with conventional financing.
1. Who qualifies for a VA home loan?
To qualify for a VA-backed loan, you must meet two key eligibility tests:
- Your length and type of military service
- Your character of service (for example, discharged under conditions other than dishonorable)
Here's a breakdown of the service-time rules:
| Period of service | Minimum active-duty requirement |
| 8/2/90–present | 24 continuous months during peacetime, or 90 days of active service during wartime, or 6 years in National Guard/Reserves |
| 9/8/80–8/1/90 | 24 continuous months during peacetime, 181 days of active service during wartime |
| 9/5/64–5/7/75 | 90 days of active duty, less if discharged for a service-connected disability |
If you are the spouse of a service-member who died in the line of duty or from a service-related injury or disability, you may qualify.
If you don't meet the standard minimum service, you may still be eligible under certain conditions. Download your DD-214 or discharge paperwork and verify your "character of service." If you're unsure, you can request your VA Form 26-1880 (Request for Certificate of Eligibility) and consult your lender or the VA directly.
2. What is a certificate of eligibility for a VA loan?
The Certificate of Eligibility is proof that you qualify for a VA home loan. In most situations, the lender can obtain the COE on your behalf.
3. What are the income, employment, and documentation requirements for a VA loan?
While the VA does not set a strict minimum income, the lender must be satisfied that your income is stable, sufficient, and that you'll be able to afford your mortgage — both now and into the future.
Here are the key points to know:
- Lenders typically expect a two-year employment history of consistent income (W-2 or equivalent)
- If you’re self-employed, expect to provide two years of tax returns and potentially more documentation
- If you’ve changed jobs but stayed in the same line of work and income is stable, many lenders will accept that
The VA reviews residual income: The amount you'll have left over each month after paying your mortgage, taxes, insurance, and other obligations. This cushion helps demonstrate long-term affordability.
Traditional DTI rations (monthly debts divided by gross monthly income) still apply; many lenders aim for DTI under ~41% for VA loans, though there's no hard rule.
Prepare these items to streamline your application:
- Most recent pay stubs covering last 4 weeks
- W-2 statements for the past 2 years
- Tax returns for past 2 years (especially if self-employed or commission-based)
- Bank statements (2-3 months) showing assets/reserves
- Employment verification or offer letter (if newly employed)
- Documentation for other income streams (bonus, overtime, disability, etc.)
4. What is the minimum credit score for a VA loan?
The Veterans Administration does not require veterans to have a minimum credit score, however, most lenders will require a credit score of at least 620. Ideally, 660 is desirable. Is your credit score and credit report acceptable? You can obtain a copy of your credit score and credit report from Equifax for free.
If applicable, the lender will need a copy of any divorce decrees and/or child-care statement(s) specifying monthly payments.
5. Assets and cash savings
Bank statements spanning the previous two months are needed by the lender to make sure you have enough money to cover the closing and escrow expenses.
6. How much can a veteran borrow?
One of the biggest myths about VA loans is that there’s a strict “cap” on how much you can borrow. Here’s the real story.
Entitlement and loan limits
You'll need to understand both entitlement and local loan limits.
- If you have full entitlement (meaning you’ve never used your VA home-loan benefit or your previous loan is paid off and entitlement restored), the VA effectively places no specific dollar cap on the loan amount.
- However, the VA sets county loan limits for the portion it will guarantee. For example: In a county with a one-unit loan limit of $900,000, the VA guaranty equals 25% of that amount (i.e., $225,000).
- If you’ve used part or all of your entitlement (e.g., you currently have a VA loan outstanding), your lender may require a down payment or apply different rules.
Borrowing power factors
Even with full entitlement, you still need to meet lender criteria:
- Credit score and credit history
- Income, employment history, asset reserves
- Debt-to-income ratio and residual income
- Property value and appraisal results
Example
- County limit: $900,000 → 25% guaranty = $225,000
- If your previously used entitlement is $50,000 → remaining bonus entitlement = $225,000 − $50,000 = $175,000
- Multiply by 4 gives an approximate maximum loan of $700,000 without a down payment (lenders may permit more if you have a down payment)
Bottom line: Your maximum loan amount isn’t fixed by the VA alone — your lender’s underwriting, your entitlement status, and county limits all matter.
Related reading
FAQ
Can anyone get a VA home loan?
Only eligible veterans who meet the lending guidelines can obtain a VA home loan.
How are VA loans different?
VA loans do not require a down payment and there is no private mortgage insurance (PMI) with VA mortgages. The home seller is permitted to pay all allowable closing costs.
How many times can I use a VA loan?
There is no limit on the number of times a veteran can use a VA loan; although, the existing VA loan should be paid off before moving onto a new VA mortgage. The reason is due to the entitlement amount (loan guarantee to the lender).
How does a VA loan work?
A VA mortgage is not unlike other mortgages. Applicants must meet income, debt to income ratios and other guidelines. Veterans must prove their VA eligibility with a Certificate of Eligibility. The COE is provided by the Veteran's Administration. The veteran can obtain the COE or approved lenders are able to acquire the certificate.
How much are closing costs on a VA loan?
There are closing costs with a VA home loan. The veteran can expect title insurance, transfer tax and mortgage stamps (if applicable), appraisal, and credit report fees and other fees just like any other mortgage.
How much home can I afford with a VA loan?
The loan amount is determined by the veteran's income, monthly debt, the location of the home, and of course the applicant's credit history.
What are the VA loan limits for 2021?
Technically, there are no loan limits on VA loans, however, thelender may have established loan limits. And, as previously mentioned, the 25% loan guarantee often limits the maximum loan size.
What is a VA home loan?
A VA home loan is a mortgage that are offered to eligible veterans by private lenders; and is backed by the Department of Veterans Affairs.
Who pays closing costs on a VA loan?
The closing costs are typically paid by the veteran, however, the seller is allowed to pay the closing costs on behalf of the veteran.