Check Rates

The Complete Guide to VA Home Loans

6 minute read

If you’re a Veteran then you’ve probably heard about VA home loans.

The mortgage program is the greatest benefit provided to our Nation’s Veterans.

A no down payment home loan with no mortgage insurance.

In this article we’re going to cover everything there is to know about VA loans.

RATE SEARCH: Check Today’s VA Rates

VA Home Loan Infographic

How Does a VA Loan Work?

Check Current VA Loan Rates

Who is Eligible

Basic VA Service Eligibility Requirements:

* VA loans are not available to Dishonorably discharged veterans

VA Loan Advantages

VA Credit Score Requirements

VA home loans technically don’t have a minimum credit score. The Department of Veterans Affairs will guarantee a mortgage loan regardless of the borrowers FICO scores.

Lenders often set their own minimum credit requirements, most VA lenders want to see at least a 620 score to approved the loan application.

Some lenders may be able to approve credit scores of 580 and higher. Lenders will look at more than just your FICO score. They take into account your entire credit history.

FHA loans are also available for those with lower credit scores.

If you have a credit score below 580 it’s highly recommended that you improve your credit score before applying.

Or if you have at least a 10% down payment you may qualify for an FHA loan with a credit score as low as 500.

Credit Guidelines

Check Current VA Rates and Get Pre-Approved

First-time Homebuyers

Veterans that are also first-time homebuyers appreciate the fact that there is zero down payment and no mortgage insurance.

However, these loans are not just for first-time buyers, veterans can use a VA home loan multiple times throughout their life-time.

VA Entitlement

VA entitlement is a figure that shows how much you are able to qualify for.

If you’re a first time user your basic entitlement will be enough to qualify for a $453,100 loan, or higher in certain high-cost areas.

You need to speak to a VA lender to find out how much of an entitlement you qualify for.

What is the VA funding fee?

Because the VA loan program doesn’t require mortgage insurance, in order to help fund the VA program there is a one time VA funding fee.

The funding fee amount will depend on the amount of the loan, and whether or not you’re using a down payment.

It needs to be paid at closing, you may be able to roll the funding fee into the loan and finance it.

Funding fee not required if you are:

VA Funding Fee Chart

Regular Military
Down payment Fee (first-time buyer) Fee (subsequent use)
0% 2.15 percent 3.3 percent
5-10% 1.5 percent 1.5 percent
10%+ 1.25 percent 1.25 percent

National Guard and Reserves and Chart

Reserve & National Guard Personnel
Down payment Fee (first-time buyer) Fee (subsequent use)
0% 2.4 percent 3.3 percent
5-10% 1.75 percent 1.75 percent
10%+ 1.5 percent 1.5 percent

VA IRRL (Cash-out refinance) Chart

VA funding fee for IRRL’s (VA cash-out refinance) is the same for all military personal weather Reserves, Regular Military, or National Guards.

All Military Personal, National Guard, and Reserves
Loan type Fee (first-time buyer) Fee (subsequent use)
IRRL’s 0.50 percent 0.50 percent
Manufactured Home Loans 1.00 percent 1.00 percent
Loan Assumptions 0.50 percent 0.50 percent

VA Certificate of Eligibility

In order to receive a VA-insured mortgage loan you must have a certificate of eligibility from the Dept. of Veterans Affairs.

Your mortgage lender can get one on your behalf, or you can visit the VA website to receive your certificate.

Qualifying VA Income

Non-Qualifying VA Income

VA Streamline Refinance

With a VA mortgage loan you may may qualify to refinance your mortgage using a streamline refinance to reduce your interest rate and lower your monthly payment.

A 210 days after closing you are eligible to refinance your VA loan.

VA streamline refinance loans are quick and easy.

It must have a net tangible benefit in order to close. You must be able to reduce your interest or lower your payments by at least 5% to qualify.

Check and Compare VA Loan Rates

VA Loan Limits

The VA loan limit in low cost areas of the country has been increased to $453,100 in low cost areas, and up to $721,050 in high cost areas of the country.

High cost areas of the country include cities such as, San Fransisco, Los Angeles or Denver.

If you are seeking a loan for a home priced above the loan limit you can get a jumbo VA loan.

You can check VA loan limits in your county here.

VA Jumbo Loans

If you’re seeking a loan to buy a home that exceeds the loan limit in your area you may be able to get a VA jumbo loan.

You will need to pay 25 percent of the amount over the loan limit.

For example if you lived in a low cost area like Dallas where the loan limit is $453,100.

And you wanted to buy a home that costs $553,100, which is $100,000 over the limit.

You will need to pay 25% of $100,000. So you will have a down payment of $25,000.

Debt-to-Income Ratio

The Department of Veteran Affairs does not state a maximum debt-to-income ratio (DTI ratio).

However lenders typically want to see a DTI ratio at or below 41%. 41% is not a hard cap, these are certain situations in which a lender will allow higher debt-to-income ratios.

Strong compensating factors for high DTI ratio

In Conclusion…

The VA home loan program offers a wealth of benefits for many home buyers.

They are easier to qualify for than conventional loans and have lower interest rates.

They are great for all Veterans, especially first-time home buyers because they offer zero down payment and no mortgage insurance making them the cheapest mortgage available.

Do you think you’re ready to buy a new home using your VA benefits?

Get Approved for a Home Loan Today

VA Loans Frequently Asked Questions

Is there a minimum credit score for a VA loan?

While technically there is no minimum credit score the VA requires, lenders set their own credit requirements, usually between 580-640. Some lenders may be able to accept credit scores lower than 580.

How many times can you use a VA home loan?

One of the great benefits of VA loans is that Veterans may use them for life. In some cases you may be able to have two VA loans at the same time, however, there are restrictions.