VA Home Loans
Benefit Fact Sheet
VA helps service members, veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. VA Home Loans are provided by private lenders, such as banks and mortgage companies. VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms. For VA housing loan purposes, the term "veteran" includes members of the National Guard, the Reserves, active duty service members, and certain categories of spouses. As part of the Blue Water Navy Vietnam Veterans Act of 2019, Congress authorized the following changes to the VA Home Loan benefit that began January 1, 2020 for ALL eligible veterans:
- VA Loan Funding Fee Change - At this time, there is a temporary change to the VA Funding Fee, which is a congressionally mandated fee associated with the VA Home Loan. Veterans and service members will see a slight increase of 0.15% to 0.30% in their funding fee (currently for two years), while National Guard and Reserve members will see a slight decrease in their fee to align with the fee paid by 'Regular Military' borrowers (permanent). Veterans with service-connected disabilities, some surviving spouses, and other potential borrowers are exempt from the VA loan funding fee and will not be impacted by this change.
- Purple Heart - If you are an active duty service member who has earned a Purple Heart, your funding fee can be waived if you close on your home while still serving on active duty.
- Conforming Loan Limits - Veterans will have greater access when using their no-down payment home loan benefit. Veterans seeking to obtain what are commonly referred to as "jumbo" loans, or veterans living in higher-cost markets, will no longer be subject to the Federally-established conforming loan limit After January 1, 2020, veterans may obtain no-down payment VA-backed loans in all areas of the country, regardless of home prices.
- Native American Direct Loan - The new law removes the loan limit of $80,000 for veterans using their entitlement for a VA Native American Direct loan to build or purchase a home on Federal trust land. Eliminating the loan limit enhances access to home loan benefits for Native American veterans.
Retired service members are eligible for a VA Home Loan if the time-in service criteria is met. For more information on time-in-service criteria, please visit: https://www.va.gov/housing-assistance/home-loans/eligibility/
If you do not meet the minimum service requirements, you may still be eligible if you were discharged due to one of the following reasons:
- Hardship, or
- The convenience of the government (you must have served at least 20 months of a two-year enlistment), or
- Early out (you must have served 21 months of a two-year enlistment), or
- Reduction in force, or
- Certain medical conditions, or
- A service-connected disability (a disability related to your military service)
Surviving Spouse Eligibility:
You may be able to get a Certificate of Eligibility (COE) if you are the spouse of a veteran, and at least one of these descriptions is true for them.
At least one of these must be true:
- The veteran is missing in action, or
- The veteran is a prisoner of war (POW), or
- The veteran died while in service or from a service-connected disability and you did not remarry, or
- The veteran died while in service or from a service-connected disability and you did not remarry before you were 57 years old or before December 16, 2003, or
- The veteran had been totally disabled and then died, but their disability may not have been the cause of death (in certain situations)
Note: A surviving spouse who remarried before December 16, 2003, and on or after their 57th birthday, must have applied no later than December 15, 2004, to establish home loan eligibility. We’ll have to deny applications we received after December 15, 2004, from surviving spouses who remarried before December 16, 2003. https://www.va.gov/housing-assistance/home-loans/surviving-spouse/
The VA Guaranteed Loan: VA guaranteed loans are made by private lenders to eligible veterans for the purchase of a home that must be for their own personal occupancy. A veteran must apply for a loan through a VA-approved lender. If the lender determines that the veteran meets VA credit and income standards, the loan is approved and VA guarantees a portion of it to the lender. The guaranty protects the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms. A veteran's basic entitlement is $36,000 but additional entitlement is available for certain loans over $144,000. VA does not have a maximum loan amount but lenders will generally only loan up to four times a veteran's available entitlement without a down-payment, provided the veteran is income and credit-qualified and the property appraises for the asking price. The maximum entitlement amount changes on an annual basis and is currently $144,000 for 2024. Therefore, if a veteran qualifies, a loan up to $766,550 (or higher in certain areas of the following locations: Alaska, Hawaii, Guam, and the U.S. Virgin Islands) can be obtained without a down payment. NOTE: For 2024, the VA guaranty limit (or maximum entitlement amount) mirrors the Federal Housing Finance Agency limits.
Benefits of a VA Guaranteed Home Loan:
- Equal opportunity for all qualified veterans to obtain a VA loan
- No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property)
- No mortgage insurance
- One time VA funding fee that can be included in the loan
- veterans receiving VA disability compensation are exempt from the VA funding fee
- VA limits certain closing costs a veteran can pay
- Can be assumed by qualified persons
- Minimum property requirements to ensure the property is safe, sanitary, and sound
- VA staff dedicated to assisting veterans who become delinquent on their loan
Types of VA Home Loans Available:
- Purchase Loan: Purchase loans help you purchase a home at a competitive interest rate often without requiring a down payment or private mortgage insurance.
- Cash-Out Refinance Loan: Cash-out refinance loans allow you to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements.
- Interest Rate Reduction Refinance Loan (IRRRL): Also called the Streamline Refinance Loan can help you obtain a lower interest rate by refinancing your existing VA loan.
- Native American Direct Loan (NADL) Program: Helps eligible Native American veterans finance the purchase, construction, or improvement of homes on Federal Trust Land, or reduce the interest rate on a VA loan.
- Adapted Housing Grants: Helps veterans with a permanent and total service-connected disability purchase or build an adapted home or to modify an existing home to account for their disability.
- Other Resources: Many states offer resources to veterans, including property tax reductions to certain veterans.
Obtaining a VA Guaranteed Loan:
Get a Certificate of Eligibility (COE): The COE verifies to a lending institution that you meet the eligibility requirements for a VA loan. Learn more about the evidence you submit and how to apply for a COE on the VA Home Loans Eligibility page.
Find a Lender: Locate a lending institution that participates in the VA program. You may want to get "pre-qualified" at this point - that is, find out how big a loan you can afford. Lenders set their own interest rates, discount points, and closing points, so you may want to shop around.
Find a Home and Sign a Purchase Agreement: Work with a real estate professional and negotiate a purchase agreement. Make sure the purchase and sales agreement contains a "VA Option Clause." You may also want the purchase agreement to allow you to "escape" from the contract without penalty if you cannot get a VA loan.
Apply for your VA Loan: Work with the lender to complete a loan application and gather the needed documents, such as pay stubs and bank statements.
Loan Processing: The lender orders a VA appraisal and begins to process all the credit and income information.
(Note: VA's appraisal is not a home inspection or a guaranty of value. It is just an estimate of the market value on the date of the inspection. Although the appraiser does look for obviously needed repairs, VA does not guarantee the condition of the house. The appraiser, who is licensed, is not a VA employee. The lender cannot request a specific appraiser; assignments are made on a rotating basis.)
The lending institution reviews the appraisal and all the documentation of credit, income, and assets. The lender then decides whether the loan should be granted.
Closing: The lender chooses a title company, an attorney, or one of their own representatives to conduct the closing. This person will coordinate the date/time and the property is transferred. If you have any questions during the process that the lender cannot answer to your satisfaction, please contact VA at your Regional Loan Center.
Remaining Entitlement: Veterans that currently have a VA home loan, may request a COE to determine whether they are eligible to purchase their next home using the VA home loan benefit. Remaining entitlement available to those who have previously used their VA home loan benefit, is 25% of the county loan limit reduced by the amount of entitlement previously used and not restored. Just as the first use of the VA loan, veterans are required to make this home their residence when purchasing a home with remaining or restored entitlement. Examples of how to calculate remaining entitlement can be found here.
Restoration of Entitlement:
Veterans could have a previously-used entitlement restored to purchase another home with a VA Home Loan if the property purchased with the prior VA loan has been sold and the loan paid in full, or a qualified veteran buyer agrees to assume the VA loan and substitute their entitlement for the same amount originally used by the veteran seller. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full, but has not disposed of the property purchased with that loan. Remaining entitlement and restoration of entitlement can be requested through the VA Eligibility Center by completing VA Form 26-1880.
For more information, please visit the VA Home Loans website maintained by the Department of Veterans Affairs:
VA Home Loan Limits:
Summary of VA Home Loan Guaranty Benefits:
VA Home Loan Buyer's Guide: