For a lot of veterans and active-duty service members, VA loans are some of the helpful advantages of army service. Backed by the U.S. Division of Veterans Affairs, these loans make homeownership extra attainable by means of decrease upfront prices, no personal mortgage insurance coverage, and versatile credit score necessities.
With Veterans Day proper across the nook, it’s time to focus on this highly effective program and perceive the way it works. On this Redfin information, we’ll clarify who qualifies, what the primary advantages are, and the best way to profit from your VA mortgage when shopping for or refinancing a house.
What’s a VA mortgage?
A VA mortgage is a kind of mortgage assured by the U.S. Division of Veterans Affairs. It’s designed to assist eligible service members, veterans, and surviving spouses purchase or refinance a house with favorable mortgage phrases, typically with no down fee required.
Whereas the VA doesn’t lend cash immediately (besides in uncommon circumstances), it ensures a portion of the mortgage. This implies if a borrower defaults, the VA will cowl a part of the lender’s loss. Due to this assure, lenders can supply aggressive rates of interest and versatile qualification requirements.
Why the VA mortgage program exists
The VA mortgage program was established in 1944 as a part of the unique GI Invoice, designed to assist service members transition to civilian life and construct monetary stability. Since then, it has helped greater than 28 million veterans and their households purchase, construct, or refinance properties.
VA loans in at this time’s market
In keeping with a latest Redfin report, VA loans have turn into barely extra widespread because the housing market tilts in consumers’ favor and sellers develop extra open to gives with decrease down funds. Nationwide, 7.3% of mortgaged homebuyers used a VA mortgage in August 2025, up from 6.5% a 12 months earlier—the very best share for that month since 2019.
These loans are most prevalent in communities with a robust army presence. In Virginia Seashore, VA, greater than 43% of mortgaged consumers used a VA mortgage in August—the very best share of any main U.S. metro and the most important on file for the world. Jacksonville, FL (17%), Washington, D.C. (17%), San Diego, CA (15%), and Las Vegas, NV (12%) additionally rank among the many high markets for VA financing. VA loans are commonest in these locations as a result of they every have a big army presence.
Who qualifies for a VA mortgage?
You could be eligible for a VA mortgage when you meet at the least one of many following:
Service members & veterans
90 consecutive days of energetic service throughout wartime, or
181 days of energetic service throughout peacetime, or
6+ years within the Nationwide Guard or Reserves.
Surviving spouses
Unremarried surviving spouses of veterans who died in service or from a service-connected incapacity may qualify.
Certificates of Eligibility (COE)
You’ll want a COE from the VA to show eligibility. Most lenders may also help you request this on-line, or you possibly can apply by means of the VA’s eBenefits portal.
Tip: Even when you’ve used your VA mortgage profit earlier than, you should still qualify once more by means of restoration of entitlement.
Kinds of VA loans
Not each VA mortgage is for purchasing a house – some are designed that will help you refinance, renovate, and even faucet into your private home’s fairness. Regardless of your monetary state of affairs or targets, right here’s a take a look at the primary kinds of VA loans and what every gives.
Your lender may also help you determine which VA mortgage kind suits your monetary targets.
Sort of VA Mortgage
Objective
Key Options
VA Buy Mortgage
Purchase a main residence
No down fee required usually, no PMI, aggressive charges.
VA Money-Out Refinance
Refinance your present mortgage and faucet into residence fairness
Entry as much as 90% of your private home’s worth as money, can be utilized to refinance non-VA loans.
VA Curiosity Fee Discount Refinance Mortgage (IRRRL)
Refinance an current VA mortgage to decrease your rate of interest
Streamlined course of with minimal documentation; typically no appraisal or earnings test required.
VA Jumbo Mortgage
Purchase a dearer residence that exceeds conforming mortgage limits
No formal VA mortgage restrict if in case you have full entitlement; lender requirements might fluctuate.
Native American Direct Mortgage (NADL)
Purchase, construct, or enhance a house on Federal Belief Land
Supplied immediately by the VA (not personal lenders); obtainable to eligible Native American veterans.
VA Renovation Mortgage (much less widespread)
Purchase or refinance and fund repairs or enhancements
Combines buy/refinance with renovation prices into one VA-backed mortgage.
VA mortgage limits
The VA doesn’t cap how a lot you possibly can borrow, except you will have impacted entitlement, that means a part of your VA profit is already getting used on one other mortgage or wasn’t absolutely restored.
When mortgage limits do apply, they’re usually based mostly on the standard mortgage restrict, which for 2025 is $806,500 for one-unit properties in most areas of the U.S. Lenders additionally use these typical limits as the start line for VA jumbo loans.
Some high-cost areas have greater limits, giving certified debtors extra flexibility. And if you want to borrow greater than your native restrict permits, you should still qualify for a VA jumbo mortgage, which doesn’t require a down fee and may supply a decrease charge than a standard jumbo mortgage.
VA mortgage advantages
VA loans supply a number of benefits that make them particularly interesting:
No down fee required usually
No personal mortgage insurance coverage (PMI)
Decrease common rates of interest in comparison with typical loans
Versatile credit score and earnings requirements
Streamlined refinance choices by means of VA IRRRL (Curiosity Fee Discount Refinance Mortgage)
Assumable loans, that means a professional purchaser can take over your VA mortgage
For instance, on a $400,000 residence, a standard mortgage with 5% down would require $20,000 upfront – plus PMI. With a VA mortgage, you may pay $0 down and skip PMI fully, saving 1000’s within the first 12 months alone.
VA mortgage necessities
Whereas VA loans are identified for being versatile, you’ll nonetheless want to satisfy a couple of key necessities:
Credit score and earnings: The VA units common tips, however lenders set up their very own requirements. Most search for a credit score rating of 620 or greater, although some might approve decrease scores with sturdy financials.
Property: The house have to be your main residence and meet the VA’s Minimal Property Necessities (MPRs).
Funding payment: Most debtors pay a VA funding payment, which ranges from 1.25% to three.3% of the mortgage quantity relying on service historical past and down fee. Some veterans are exempt (e.g., these with service-connected disabilities).
Residual earnings: Lenders consider whether or not you will have sufficient earnings left over after month-to-month bills, a singular VA requirement to assist forestall foreclosures.
Need to estimate your month-to-month VA mortgage funds? Use our mortgage calculator to see how your mortgage quantity, rate of interest, and time period have an effect on your fee.
Can you utilize your VA mortgage profit greater than as soon as?
Sure, you need to use your VA mortgage profit a number of instances. You’ll be able to restore your full entitlement by promoting your present residence, or you need to use partial entitlement to purchase one other property when you preserve your first one. This flexibility is particularly helpful for army households who relocate steadily.
VA loans vs. different mortgage sorts
Right here’s how VA loans examine to standard and FHA loans at a look:
Function
VA Mortgage
Typical
FHA
Down fee
0% (most circumstances)
3%+
3.5%+
PMI / MIP
No PMI
Required if
Required
Credit score rating
Versatile
Sometimes 620+
580+
Funding payment
Sure, 1.25–3.3%
No
Upfront MIP (1.75%) + annual
Assumable
Sure
Uncommon
Sure
VA loans usually supply the perfect phrases for individuals who qualify, particularly when in comparison with typical or FHA loans.
>>Learn: Kinds of Dwelling Loans
The VA mortgage course of: Step-by-step information
The VA mortgage course of is just like a standard mortgage, with a couple of key variations alongside the best way. Right here’s a fast overview of the VA mortgage course of:
Step
What Occurs
Key Particulars
1. Examine eligibility
Affirm your service historical past and get a COE.
You’ll be able to apply on-line or have your lender request it.
2. Discover a VA-approved lender
Work with a financial institution, credit score union, or mortgage firm.
The VA doesn’t lend immediately (aside from Native American Direct Loans).
3. Get preapproved
Lender opinions credit score, earnings, and entitlement.
This helps you set a finances and strengthen gives.
4. Home hunt
Store for a house inside your preapproval quantity.
The house have to be your main residence.
5. VA appraisal
The VA requires a particular appraisal.
Ensures the property meets VA minimal property necessities (MPRs).
6. Underwriting
Lender verifies paperwork and finalizes the mortgage.
Might ask for additional information earlier than closing.
7. Closing
You signal ultimate paperwork and get the keys.
You could pay a one-time VA funding payment (might be rolled into the mortgage).
>>Learn: Purchase a Foreclosed Dwelling With a VA Mortgage
When a VA mortgage may not be proper
VA loans are an excellent choice for a lot of veterans and repair members, however they’re not best for each state of affairs. You could wish to contemplate one other mortgage kind if:
You’re shopping for a trip or funding property: VA loans are just for main residences. For a second residence or rental, you’ll want a standard mortgage.
The house doesn’t meet VA property requirements: Houses should meet the VA’s security and livability necessities. A fixer-upper might not qualify except it’s financed with a VA renovation mortgage.
The funding payment might offset your financial savings: As famous earlier, most debtors pay a one-time VA funding payment. For smaller mortgage quantities or when making a big down fee, that payment can cut back a number of the mortgage’s monetary benefits.
Even when a VA mortgage isn’t the proper match now, you should still qualify sooner or later. For instance, if a fixer-upper doesn’t meet VA requirements at this time, you may use a VA renovation mortgage as soon as repairs are full.
Continuously requested questions on VA loans
1. Can I exploit a VA mortgage for a second residence or funding property?
No. VA loans are just for main residences, although you possibly can reuse your profit for a brand new main residence.
2. Are VA loans just for first-time consumers?
No. You need to use the profit a number of instances so long as you will have remaining entitlement.
3. Can I get a VA mortgage with bad credit report?
Probably. The VA doesn’t set a minimal rating, however most lenders search for round 620. Some might approve decrease with sturdy compensating components.
4. How lengthy does it take to shut on a VA mortgage?
On common, 30–45 days, just like typical loans, although the VA appraisal can add a little bit of time.
5. Do I would like mortgage insurance coverage with a VA mortgage?
No. As an alternative of PMI, you’ll usually pay a one-time funding payment, which might be financed.
