The VA loan is one of the most favorable mortgage programs available, but eligibility is restricted to those who have served in the US military.
Who is eligible
- Active-duty military with 90+ days of continuous service (wartime) or 181+ days (peacetime)
- Veterans who served the qualifying minimum and received an honorable or general discharge
- National Guard / Reserves with 6+ years of service or specific deployment criteria
- Surviving spouses of service members who died in the line of duty (with restrictions)
Key VA loan benefits
- No down payment required — 100% financing is the headline benefit. Borrower can put down 0% on the home purchase
- No monthly mortgage insurance — unlike FHA’s MIP or conventional’s PMI, VA loans have no recurring MI cost
- Flexible credit standards — VA doesn’t set a hard credit score minimum; lenders typically require 580-620+
- Reusable benefit — eligible veterans can use VA financing multiple times across their lifetime
- Assumable — VA loans can be assumed by another qualifying veteran, transferring the existing rate and terms
VA Funding Fee
The trade-off for the favorable terms is the VA Funding Fee, charged upfront at closing. The fee ranges from 1.4% to 3.6% of the loan amount, depending on down payment, first-time vs. subsequent VA loan use, and disability status. Veterans with service-connected disabilities are exempt from the funding fee. The fee can be financed into the loan rather than paid in cash at closing.
VA Streamline (IRRRL)
The VA Interest Rate Reduction Refinance Loan (IRRRL) is the VA equivalent of FHA’s streamline refi. Allows existing VA borrowers to refinance to a lower rate with reduced documentation, no appraisal, and no income verification.
