VA HOME LOAN GUIDE
VA Loans: Eligibility, Benefits and Costs
A VA-backed home loan is made by a private lender and partially guaranteed by the U.S. Department of Veterans Affairs. Eligible Veterans, active-duty service members, National Guard or Reserve members, and certain surviving spouses may be able to use the benefit.
A VA purchase loan may offer no-down-payment financing and does not require monthly mortgage insurance. Eligibility, entitlement, lender underwriting, occupancy, appraisal, property requirements, closing costs and a possible VA funding fee still apply.
ShopRates helps consumers understand VA mortgage options and connect with independent providers that can evaluate eligibility and terms.
A Certificate of Eligibility and benefit eligibility do not guarantee loan approval, terms or funding-fee exemption.
Compare the complete VA loan
VA LOANS AT A GLANCE
Who makes the loan
A private VA-approved lender; VA guarantees part of an eligible loan
Potential down payment
Qualified borrowers may be able to purchase with no down payment
Monthly mortgage insurance
VA-backed loans do not require monthly mortgage insurance
Funding fee
A one-time VA funding fee may apply unless the borrower qualifies for an exemption
Property use
Generally a home the borrower will occupy as a primary residence
Approval
COE, credit, income, residual income, debts, appraisal and property requirements are evaluated
How Does a VA-Backed Loan Work?
The Department of Veterans Affairs provides a guaranty to an approved private lender for part of an eligible mortgage. The lender—not VA and not ShopRates—takes the application, evaluates credit and income, sets pricing, funds the loan and services it directly or through another company.
The guaranty can reduce lender risk and support features such as no required down payment in eligible purchase transactions and no monthly mortgage insurance. It does not eliminate closing costs, the funding fee, appraisal requirements or the need to demonstrate the ability to repay.
VA establishes program rules. Lenders may also maintain additional underwriting standards, including credit-score requirements, as long as applicable law and VA policy are followed.
Direct answer: VA guarantees a portion of the loan; it does not guarantee the borrower will be approved. ShopRates provides education and referrals only.
Who May Be Eligible for a VA Home Loan?
VA home-loan eligibility can extend to qualifying Veterans, active-duty service members, National Guard members, Reserve members and certain surviving spouses. Required service depends on when, how and how long the person served, the character of discharge and any qualifying exception.
Because service rules contain multiple eras and exceptions, use VA’s current eligibility page instead of relying on a simplified day-count checklist. Certain surviving spouses must complete a separate eligibility process.
Meeting service requirements establishes potential benefit eligibility. The lender must still approve the credit, income, debts, assets, occupancy, property and loan structure.
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| Eligibility path | Evidence may include | Verify with VA |
|---|---|---|
| Veteran | Evidence may includeDischarge/separation records such as DD214 | Verify with VAService period and character of discharge |
| Active duty | Evidence may includeStatement of service or VA/lender verification | Verify with VACurrent service and minimum requirement |
| National Guard/Reserve | Evidence may includePoints statement, discharge records or service statement | Verify with VACreditable service and activation rules |
| Surviving spouse | Evidence may includeMarriage, death/service records and VA forms | Verify with VAQualifying spouse status and remarriage rules |
| Other eligible service | Evidence may includeRecords for certain qualifying organizations or allied service | Verify with VASpecific statutory eligibility |
Official VA eligibility rules →  · VA home-loan overview →
Certificate of Eligibility (COE)
A Certificate of Eligibility confirms to the lender that VA has verified home-loan benefit eligibility and shows entitlement information or relevant conditions. It does not state the loan amount a borrower can afford and is not a mortgage preapproval.
A borrower can request a COE through VA.gov, an approved lender can often request it electronically, or the borrower can apply using VA Form 26-1880 when appropriate. Surviving-spouse procedures may require different documentation.
Review the COE for entitlement used, funding-fee status and conditions. Ask VA or the lender to resolve errors before relying on the benefit in a purchase contract.
- Gather service or surviving-spouse documentation.
- Request the COE through VA.gov or an approved lender.
- Review entitlement and any conditions shown.
- Resolve missing service records or exemption questions.
- Provide the current COE to the lender for underwriting.
Request a VA COE → · VA Form 26-1880 → · Mortgage preapproval →
Do not misstate: A COE is evidence of benefit eligibility—not a credit approval, property approval, appraisal, rate quote or commitment to lend.
VA Entitlement and Loan Limits
Entitlement is the amount VA may guarantee to the lender if the borrower does not repay the loan. It is not a cash benefit, down payment or the maximum amount a person may borrow.
A borrower with full entitlement does not have a VA loan limit, but the lender must still approve the requested amount and the property appraisal must support the transaction. The maximum loan on an individual purchase is generally constrained by the lower of the purchase price or appraised value unless the borrower contributes the difference.
A borrower with entitlement already in use may have remaining entitlement. In that situation, county conforming limits and guaranty calculations can affect the amount available without a down payment. An approved lender or VA should calculate the specific file.
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| COE/entitlement situation | What it may mean | Required next step |
|---|---|---|
| Full entitlement | What it may meanNo VA loan limit solely from the guaranty benefit | Required next stepLender qualifies amount; appraisal supports value |
| Prior loan paid and property sold | What it may meanEntitlement may be restored | Required next stepRequest restoration and an updated COE |
| Prior VA loan still open | What it may meanPart of entitlement may remain in use | Required next stepCalculate remaining entitlement by location |
| Prior loan paid but property retained | What it may meanOne-time restoration may be possible in qualifying circumstances | Required next stepRequest VA determination before assuming availability |
| Assumption by qualified Veteran | What it may meanEntitlement substitution may be possible | Required next stepObtain servicer/VA approval and documentation |
VA Loan Requirements
VA benefit eligibility is only the first layer. The lender evaluates whether the borrower can repay the mortgage and whether the property and transaction meet VA requirements.
Common factors include credit history, stable qualifying income, recurring debts, residual income after major obligations, assets and cash to close, occupancy, entitlement, appraisal value and property condition. Automated findings and lender standards affect documentation.
VA does not require one universal minimum credit score, but lenders may set their own minimum. A score alone never guarantees approval or pricing.
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| Factor | What may be evaluated | Consumer guardrail |
|---|---|---|
| Credit | What may be evaluatedPayment history, scores, recent debt, bankruptcies and foreclosures | Consumer guardrailVA has no universal score; provider overlays vary |
| Income | What may be evaluatedAmount, stability, continuance and documentation | Consumer guardrailGross deposits are not automatically qualifying income |
| Debt-to-income | What may be evaluatedMonthly obligations relative to qualifying income | Consumer guardrailA ratio is not evaluated in isolation |
| Residual income | What may be evaluatedIncome remaining after obligations and estimated shelter expense | Consumer guardrailFamily size, region and loan size can matter |
| Assets | What may be evaluatedClosing funds, reserves when required and source of funds | Consumer guardrailKeep a complete paper trail |
| Occupancy/property | What may be evaluatedPrimary-residence intent, value and minimum property requirements | Consumer guardrailAppraisal is not a home inspection |
Does a VA Loan Require a Down Payment?
Qualified borrowers with sufficient entitlement may be able to purchase with no down payment when the sales price does not exceed the appraised value and the lender approves the loan. No down payment does not mean no cash is needed.
Closing costs, prepaid taxes and insurance, inspections, earnest money, an appraisal gap and other expenses can still require cash. Seller or lender credits may help with certain allowable costs, subject to VA and lender rules.
A voluntary down payment can reduce the loan amount and may lower the funding-fee percentage for a non-exempt purchase borrower at the 5% and 10% thresholds. Compare liquidity, fee savings, payment and reserves.
Scroll sideways to see the full table.
| Scenario | Potential benefit | Evaluate |
|---|---|---|
| No down payment | Potential benefitPreserves upfront cash | EvaluateAppraised value, payment, closing costs and reserves |
| At least 5% down | Potential benefitMay reduce purchase funding-fee rate for non-exempt borrower | EvaluateCash retained versus fee/payment reduction |
| At least 10% down | Potential benefitMay reduce funding-fee rate further | EvaluateAlternative conventional pricing and liquidity |
| Appraisal below price | Potential benefitBuyer may renegotiate, exit under contract protections or contribute difference | EvaluateVA escape clause, market risk and cash |
| Credits/assistance | Potential benefitMay reduce eligible costs | EvaluateContribution limits, price, rate and assistance lien terms |
VA Funding Fee
The VA funding fee is a one-time charge that helps support the home-loan program. It generally applies unless VA determines the borrower meets an exemption. The fee can usually be paid at closing or financed into the loan.
For VA-backed purchase and construction loans, the percentage depends on the down payment and whether the borrower is using the benefit for the first time or after the first use. Financing the fee increases the loan balance and interest paid over time.
The lender must verify exemption status. Some borrowers may qualify for a refund if a later VA disability-compensation award has an effective date before closing; VA determines refund eligibility.
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| Purchase down payment | First use | After first use |
|---|---|---|
| Less than 5% | First use2.15% | After first use3.30% |
| 5% or more | First use1.50% | After first use1.50% |
| 10% or more | First use1.25% | After first use1.25% |
Rates shown are the current VA-published rates reviewed September 7, 2026. They apply to eligible VA-backed purchase and construction loans for Veterans, active-duty service members, and National Guard and Reserve members. Confirm the current official table and exemption status before publishing or quoting a transaction. Official VA funding-fee and closing-cost page →
No exemption promise: Do not infer exemption from a disability statement, proposed rating or COE screenshot. VA and the lender must verify the borrower’s funding-fee status for the closing.
VA Closing Costs, Fees and Credits
A no-down-payment VA purchase can still involve closing costs. These may include lender charges, appraisal, credit report, title and settlement services, recording, taxes, insurance, prepaid interest and initial escrow deposits.
VA limits certain lender charges and identifies which fees may be paid by the borrower. Seller concessions and lender credits may cover eligible costs within applicable rules, but a credit can be offset by price or interest-rate tradeoffs.
The funding fee, when required, is separate from ordinary closing costs. On a purchase loan it may generally be financed, while most other costs cannot simply be added to the purchase loan balance.
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| Cost category | Examples | Comparison question |
|---|---|---|
| Lender charges | ExamplesOrigination or other allowable lender fees | Comparison questionIs the lender using a flat origination charge or itemized fees? |
| VA-related | ExamplesFunding fee and appraisal | Comparison questionIs the fee exempt, paid or financed? |
| Third-party | ExamplesTitle, settlement, recording and credit services | Comparison questionCan the service be shopped? |
| Prepaids/escrow | ExamplesInterest, taxes and homeowners insurance | Comparison questionWhich figures are estimates? |
| Credits/concessions | ExamplesSeller or lender help with eligible costs | Comparison questionDoes the price or rate change? |
| Inspections | ExamplesGeneral and specialist inspections | Comparison questionWhat does the property warrant? |
VA Appraisal and Property Requirements
The lender orders a VA appraisal to support reasonable value and determine whether the property meets VA minimum property requirements. VA issues a Notice of Value based on the appraisal process.
A VA appraisal is not a home inspection and does not guarantee the property is free from defects. Buyers should consider an independent inspection and specialist evaluations appropriate to the home.
If the value is below the sales price, the borrower may have options under the contract and VA protections, such as renegotiating, contributing cash or declining to proceed. If minimum property requirements are not met, repairs or additional review may be required.
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| Appraisal outcome | Potential issue | Next step |
|---|---|---|
| Value supports price | Potential issueNo appraisal gap identified | Next stepContinue subject to underwriting and all conditions |
| Value below price | Potential issueLoan may not support full contract price | Next stepReview reconsideration, renegotiation, cash and escape rights |
| MPR issue | Potential issueSafety, sanitation or structural/property concern | Next stepDetermine required repair and responsible party |
| Unique property | Potential issueComparable data or eligibility complexity | Next stepAllow time for review and lender guidance |
| Condo/manufactured home | Potential issueProject, title or construction requirements | Next stepConfirm eligibility before contract reliance |
VA home-buying process → · VA appraisal resources →
Terminology: Use “VA appraisal” and “minimum property requirements.” Never call it a VA inspection or imply that VA warrants the condition of the home.
Occupancy and Eligible Properties
VA-backed purchase loans are intended for a home the eligible borrower will occupy as a primary residence. Occupancy timing and exceptions can depend on active-duty circumstances, deployment, spouse occupancy and other VA rules.
Eligible property types may include a single-family home, approved condominium, manufactured home and certain one- to four-unit properties when requirements are met. The borrower generally cannot use a VA-backed purchase loan solely to acquire a non-owner-occupied investment property or vacation home.
A borrower purchasing a multi-unit property may be able to occupy one unit and use eligible rental income under lender and VA underwriting rules.
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| Property/use | Potential VA path | Verify early |
|---|---|---|
| Single-family primary home | Potential VA pathCommon purchase use | Verify earlyValue, condition and occupancy |
| 2–4 unit owner-occupied | Potential VA pathPotentially eligible | Verify earlyRental-income treatment, reserves and experience |
| Condominium | Potential VA pathPotentially eligible | Verify earlyVA project approval and unit review |
| Manufactured home | Potential VA pathPotentially eligible | Verify earlyLand, title, foundation, term and lender availability |
| New construction | Potential VA pathPotential VA construction/permanent path | Verify earlyBuilder, warranty, inspection and lender program |
| Second home/investment-only | Potential VA pathNot standard VA purchase purpose | Verify earlyConsider conventional or investor financing |
Multi-unit home loans →  · Condo loans →  · Manufactured home loans →  · Investor loans →
VA Loan Types
VA-Backed Purchase Loan
An eligible borrower may use a VA-backed purchase loan to buy or build a qualifying primary residence through an approved private lender. Entitlement, underwriting, appraisal, occupancy, funding fee and property requirements apply.
Purchase loans → · Official VA purchase loan page →
Interest Rate Reduction Refinance Loan (IRRRL)
An IRRRL can refinance an existing VA-backed home loan to reduce the interest rate or make payments more stable, subject to eligibility, seasoning, recoupment and net-tangible-benefit rules.
An IRRRL does not mean “no cost,” and repeated solicitations can be misleading. Compare the new rate, fees, funding fee, recoupment period, payment and total cost.
VA IRRRL guide → · Official VA IRRRL page →
VA-Backed Cash-Out Refinance
A VA-backed cash-out refinance may allow an eligible borrower to refinance a VA or non-VA mortgage and, when permitted, access equity. Credit, income, occupancy, appraisal, loan-to-value, seasoning and lender requirements apply.
Using home equity to pay unsecured debt can convert that debt into an obligation secured by the home. Compare the new total balance, rate, term, fees and foreclosure risk.
VA cash-out refinance → · Official VA cash-out page →
Native American Direct Loan (NADL)
Eligible Native American Veterans and certain spouses may be able to use a VA direct loan to buy, build or improve a home on federal trust land, subject to VA and tribal requirements. Unlike a standard VA-backed loan, VA is the lender for NADL.
VA Loan Assumptions and Entitlement Risk
A qualifying buyer may be able to assume an existing VA loan, subject to servicer and VA requirements. The assuming buyer does not always have to be a Veteran, but approval, credit qualification and funding-fee rules can apply.
The seller’s entitlement may remain tied to the loan unless an eligible Veteran assuming the mortgage substitutes entitlement or the loan is otherwise paid in full and entitlement is restored. A release from personal liability is also a separate issue.
Before an assumption, both parties should obtain written answers about approval, liability release, entitlement substitution, equity due to the seller, funding fee, servicing and future eligibility.
Seller warning: Never state that a VA assumption automatically restores the seller’s entitlement or releases the seller from liability. Require written servicer/VA confirmation.
VA vs. Conventional, FHA and USDA
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| Feature | VA | Conventional | FHA | USDA |
|---|---|---|---|---|
| Government role | VAVA guaranty | ConventionalNo federal insurance/guarantee | FHAFHA insurance | USDAUSDA guaranty |
| Eligibility | VAService/eligible spouse + COE | ConventionalProgram/provider underwriting | FHAFHA/provider underwriting | USDAIncome and rural-property rules |
| Low/no down | VAQualified borrower may have no down payment | ConventionalCertain programs as low as 3% | FHAAs low as 3.5% | USDAQualified borrower may have no down payment |
| Ongoing insurance | VANo monthly mortgage insurance | ConventionalPMI may apply below 20% | FHAAnnual MIP generally applies | USDAAnnual guarantee fee applies |
| Upfront fee | VAFunding fee unless exempt | ConventionalNo government guaranty fee | FHAUpfront MIP generally | USDAUpfront guarantee fee |
| Property use | VAPrimary residence | ConventionalBroader uses by program | FHAPrimary residence | USDAEligible rural primary residence |
VA can be powerful for an eligible borrower, but no loan is automatically cheapest. Compare the full Loan Estimate, funding fee, rate, APR, cash to close, payment and expected holding period.
Conventional loans →  · FHA loans →  · USDA loans →
VA Loan Document Checklist
Benefit and identity
- Certificate of Eligibility
- Service records if needed
- Government identification
- Funding-fee exemption evidence handled through VA/lender
- Address/housing history
Income and credit
- Recent pay statements
- W-2s/tax returns when required
- Employer/service information
- Self-employment/business records if applicable
- Other qualifying income
Assets and property
- Bank/investment statements
- Purchase contract
- Earnest-money trail
- Gift/assistance documents
- Insurance quote
- Property/HOA documents as requested
Privacy: Use the provider’s secure document channel. Do not send Social Security numbers, DD214 records, disability information, tax returns, bank statements or identity documents through ordinary email or a general contact form.
VA Homebuying Process
- Review budget, credit, debts, income and post-closing reserves.
- Confirm potential VA benefit eligibility and request a current COE.
- Review entitlement and funding-fee status shown or pending.
- Compare qualified VA-approved lenders using the same scenario.
- Obtain documented preapproval and define an affordable property range.
- Choose an eligible primary residence and contract terms you understand.
- Submit a complete application and supporting documents.
- Review the Loan Estimate, funding fee, credits and cash to close.
- Complete the VA appraisal and an independent home inspection.
- Resolve value, MPR, title, insurance and underwriting conditions.
- Review the Closing Disclosure and final figures before signing.
- Close, retain benefit/loan records and confirm servicing information.
Before closing: Ask the lender before opening credit, financing a vehicle or furniture, changing employment, moving large funds, co-signing, missing payments or making undocumented deposits. The lender can reverify eligibility before closing.
Compare VA Loan Offers
Request Loan Estimates for the same purchase price, loan amount, down payment, term, rate type and lock period. Confirm whether each estimate treats the funding fee as exempt, paid at closing or financed.
Compare the note rate, APR, points or lender credits, funding fee, lender charges, projected payment, cash to close and “In 5 Years” figures. Ask why any offer differs from what was discussed.
Scroll sideways to see the full worksheet.
| Field | Offer A | Offer B | Offer C |
|---|---|---|---|
| Purchase price / down payment | Offer A | Offer B | Offer C |
| Base loan amount | Offer A | Offer B | Offer C |
| Funding fee / exemption status | Offer A | Offer B | Offer C |
| Total loan amount | Offer A | Offer B | Offer C |
| Rate / lock period | Offer A | Offer B | Offer C |
| APR | Offer A | Offer B | Offer C |
| Points / lender credits | Offer A | Offer B | Offer C |
| Total monthly payment | Offer A | Offer B | Offer C |
| Estimated cash to close | Offer A | Offer B | Offer C |
| Five-year total / principal paid | Offer A | Offer B | Offer C |
Print this page or copy the fields to record each written offer side by side.
CFPB Loan Estimate explainer →  · VA home-buying process →  · Mortgage payment calculator →
Frequently Asked Questions
What is a VA loan?
A standard VA-backed home loan is made by a private VA-approved lender and partially guaranteed by the U.S. Department of Veterans Affairs for an eligible borrower and transaction.
Who may qualify for a VA home loan?
Eligibility may extend to qualifying Veterans, active-duty service members, National Guard and Reserve members, and certain surviving spouses. VA determines benefit eligibility under current service rules.
What is a VA Certificate of Eligibility?
A COE verifies home-loan benefit eligibility and entitlement information for a lender. It is not mortgage approval, an appraisal or a promise of a particular loan amount.
Does a VA loan require a down payment?
Qualified borrowers with sufficient entitlement may be able to purchase with no down payment when the sales price does not exceed appraised value and the lender approves the loan.
Do VA loans have mortgage insurance?
VA-backed loans do not require monthly mortgage insurance. A one-time VA funding fee may apply unless VA determines the borrower is exempt.
What is the VA funding fee?
It is a one-time charge that helps support the VA home-loan program. For purchase loans, the percentage depends on down payment and first or subsequent use; verified exemptions apply to qualifying borrowers.
Does VA require a minimum credit score?
VA does not set one universal minimum credit score, but lenders may establish credit-score requirements and evaluate the complete credit, income, debt and residual-income profile.
Is there a VA loan limit?
A borrower with full entitlement does not have a VA loan limit solely from the benefit, but the lender must approve the amount and the appraisal must support the transaction. Remaining entitlement can change the calculation.
Is a VA appraisal a home inspection?
No. The VA appraisal supports value and minimum property requirements. Buyers should consider an independent home inspection and specialist evaluations.
Can a VA loan finance a multi-unit property?
Potentially. An eligible borrower may be able to purchase a qualifying two- to four-unit property while occupying one unit, subject to appraisal, rental-income, reserve and underwriting rules.
Can a VA loan be assumed?
Potentially. A buyer must satisfy the servicer and VA process. Entitlement substitution and release of the seller’s liability are separate issues that require written confirmation.
How should I compare VA lenders?
Compare Loan Estimates for the same scenario, including rate, APR, funding-fee treatment, points or credits, lender charges, monthly payment, cash to close and five-year cost figures.
Ready to Compare VA Loan Options?
Explore potential VA-backed mortgage paths and connect with independent providers that can evaluate your COE, entitlement, documentation, property and goals.
ShopRates is not a lender, VA benefits representative or government agency and is not affiliated with or endorsed by VA. Independent providers and VA determine eligibility and terms.
RELATED RESOURCES
Sources
- VA home-loan program overview — va.gov/housing-assistance/home-loans
- VA service and surviving-spouse eligibility — va.gov/housing-assistance/home-loans/eligibility
- VA COE request — va.gov/housing-assistance/home-loans/request-coe-form-26-1880
- VA entitlement and loan limits — va.gov/housing-assistance/home-loans/loan-limits
- VA funding fee and closing costs — va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs
- VA home-buying process — va.gov/housing-assistance/home-loans/home-buying-process
- VA loan types — va.gov/housing-assistance/home-loans/loan-types
- VA appraisal resources — benefits.va.gov/homeloans/appraiser.asp
- CFPB Loan Estimate comparison — consumerfinance.gov/owning-a-home/loan-estimate
- VA Buyer’s Guide — benefits.va.gov VA Buyers Guide (PDF)
ShopRates provides general educational information and may connect consumers with independent mortgage providers. ShopRates is not a lender, bank, mortgage broker, loan originator, servicer, underwriter, government agency or VA benefits representative. ShopRates is not affiliated with or endorsed by the U.S. Department of Veterans Affairs. We do not provide individualized legal, tax, investment, benefits or financial advice or guarantee eligibility, approval, funding-fee exemption, rates, savings, appraisal results, closing dates or loan terms.
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