VA Loans - Mr. Mortgage

What a VA loan is

A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs. That guarantee protects the lender, which is why eligible borrowers can buy with no down payment and no monthly mortgage insurance.

You still get the loan through a mortgage professional, not from the VA. It works for buying a home or refinancing one you own, and the benefit does not expire.

Who qualifies

Veterans who meet the minimum service requirements.
Active duty service members.
National Guard and Reserve members who meet the service requirements.
Certain surviving spouses of service members.

The basic requirements

Requirement	What VA asks for
Eligibility	A Certificate of Eligibility based on your service, or on your spouse’s service for certain surviving spouses.
Down payment	None required with full entitlement. The VA sets no loan limit for borrowers with full entitlement, though lenders have their own maximums.
Credit score	The VA sets no minimum. Many lenders look for about 620, and some go lower.
Income	Debt-to-income, often around 41%, plus residual income: what is left each month after major expenses.
Occupancy	The home must be your primary residence, usually moving in within 60 days.
Property	1 to 4 units that meet VA property standards, checked by a VA appraisal. A condo needs to be in a VA-approved complex.

These are VA guidelines. Lenders can add their own on top.

The VA funding fee

Instead of monthly mortgage insurance, most VA loans carry a one-time funding fee paid to the VA. It keeps the program running for the next borrower.

It is usually financed, added into the loan instead of paid in cash at closing.
The amount depends on your down payment and whether you have used the benefit before. Putting money down lowers it.
Some borrowers pay nothing, including veterans who receive VA disability compensation.

VA or FHA?

Both are built for buyers with less saved, but if you are eligible for VA, it usually comes out ahead.

	VA	FHA
Minimum down	None with full entitlement	3.5% with a 580 score
Monthly mortgage insurance	None	Yes, often for the life of the loan
Upfront cost	Funding fee, waived for some	1.75% upfront mortgage insurance
Seller help	Closing costs plus up to 4% in concessions	Up to 6% toward closing costs
Who can use it	Eligible veterans, service members and certain surviving spouses	Anyone buying a home to live in

Not eligible, or buying a second home? The FHA and conventional program pages cover those options.

Refinancing later

A VA streamline refinance, also called an IRRRL, can lower the rate on an existing VA loan with less paperwork. A VA cash-out refinance lets you tap your equity, and it can also move a non-VA loan into the VA program.

VA home loans.