What is a VA Loan?

If you’ve served or are serving on active duty in the US Military, you may be eligible for a Veterans Affair loan. A Veterans Affair loan, or VA loan, helps veterans, active-duty service members, and their surviving spouses buy a home while taking advantage of their significant benefits.


No Down Payment

By far, the single-largest benefit of the VA loan is that qualified Veterans can purchase a home without a down payment. The minimum down payment amount on an FHA loan is 3.5 percent, and for conventional financing, it’s often 5 percent. On a $250,000 mortgage, a military borrower would need $8,700 in cash for an FHA loan and $12,500 for a typical conventional loan. With the VA loan, qualified borrowers can finance 100 percent of the home’s value without putting down a dime.

Relaxed Credit Requirements

Veterans don’t need a perfect credit score, let alone anything near it, to secure a home at competitive interest rates. The Department of Veterans Affairs does not set or enforce credit minimums. VA loans are also more forgiving when bouncing back after a foreclosure, bankruptcy, or short sale.

Closing Cost Limits

All mortgages come with fees and closing costs, but the VA loan limits what Veterans can be charged with these expenses. VA borrowers can ask a seller to pay all their loan-related closing costs and up to 4 percent in concessions, which can cover expenses such as prepaid taxes and insurance, paying off collections and judgments, and more. Although it is not guaranteed that the seller will agree to that request, veterans can certainly ask during the negotiation process.

No Loan Limits

A common misconception of the VA loan is that it can only be used once. Veterans who qualify for a VA loan can use this program over and over again, and the benefit never expires. Unlike what you may have heard, you don’t necessarily have to pay back your VA loan in full to use your benefit again.

To learn more about VA loans, visit https://www.benefits.va.gov/homeloans/