The best mortgage deal available — 0% down, no monthly PMI, and competitive rates. Everything veterans and military members need to know about VA home loans.
A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs (VA). The VA doesn't lend money directly — it guarantees a portion of each loan, which allows VA-approved private lenders to offer exceptional terms: no down payment, no monthly mortgage insurance, and competitive interest rates.
VA loans are widely considered the best mortgage product available for those who qualify. The combination of 0% down and no PMI makes homeownership dramatically more accessible — and dramatically cheaper over time — compared to conventional and FHA alternatives. VA loans have helped over 28 million veterans become homeowners since the program launched in 1944.
Key stat: A veteran buying a $350,000 home with a VA loan vs a conventional loan (5% down + PMI) saves approximately $17,500 in upfront costs and $250–$400/month in PMI — over $90,000 in potential savings over 30 years when opportunity cost is included.
You generally qualify for a VA loan if you meet one of these service criteria:
You'll need a Certificate of Eligibility (COE) to prove your entitlement. Most VA-approved lenders can obtain your COE electronically in minutes through the VA portal.
The VA itself has no official minimum credit score. However, most VA-approved lenders impose their own minimums, typically 580–620. The VA uses a residual income test (money left after all monthly obligations) rather than a strict DTI cap — though the guideline is 41% back-end DTI.
Residual Income Test: After paying all debts and the proposed mortgage, you must have a minimum amount of "residual income" left based on family size and geographic region. This is a more holistic qualification approach than DTI alone.
| Feature | VA Loan | FHA Loan | Conventional (5% down) |
|---|---|---|---|
| Down Payment | 0% | 3.5% | 5% |
| Monthly Mortgage Insurance | None | $128+/mo | $100–$300/mo |
| Upfront Insurance Fee | 1.25%–3.3% (once) | 1.75% | None |
| Typical Interest Rate | Lowest | Middle | Highest (low credit) |
| Credit Score Min | No official min | 580 | 620 |
| Seller Concessions | Up to 4% | 6% | 3% |
| Property Types | Primary only | Primary only | Primary/2nd/Invest |
Instead of monthly PMI, VA loans require a one-time VA funding fee. This fee helps sustain the VA loan program and can be rolled into the loan amount.
| Borrower Type | Down Payment | Funding Fee (1st Use) | Funding Fee (Subsequent) |
|---|---|---|---|
| Regular Military | Less than 5% | 2.15% | 3.3% |
| Regular Military | 5%–9.99% | 1.5% | 1.5% |
| Regular Military | 10%+ | 1.25% | 1.25% |
| National Guard/Reserves | Less than 5% | 2.3% | 3.6% |
| Surviving Spouses | Any | 2.15% | 3.3% |
Exemptions: Veterans receiving VA disability compensation (10%+ rating), surviving spouses of veterans who died in service or from service-connected disability, and Purple Heart recipients on active duty pay no funding fee.
Since January 2020, there are no loan limits for VA-eligible borrowers with full entitlement (meaning they haven't used their VA benefit before, or have fully paid off a previous VA loan). You can borrow as much as a lender will approve with $0 down.
If you have reduced entitlement (active VA loan on another property), loan limits apply based on county conforming limits.