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VA Loan

What Is a VA Loan?

A VA loan is a mortgage loan that is backed by the U.S. Department of Veterans Affairs, or VA. It is available to military service members, veterans, and their immediate family members. The VA loan program is the most powerful home loan option on the market for veterans, service members, and military families. These flexible, government-backed loans come with significant benefits that open the doors of homeownership to veterans who might otherwise struggle to obtain financing.

VA Loan Qualifications

To qualify for a VA loan, you must have one of the following:

  • 90 consecutive days of active military service during wartime
  • 181 days of active military service during peacetime
  • Six years of service in the National Guard or Reserves

Spouses of deceased service members who died in the line of duty are also eligible to apply for a VA loan.

Who Should Get a VA Loan?

VA loans are designed only for military members, veterans, and their families. If you fall into one of these categories, the VA loan should be your first choice, as it often comes with lower interest rates and fewer up-front costs.

Pros and Cons of VA loans
Pros:
  • No down payment required as long as the sales price doesn’t exceed the appraised value
  • No private mortgage insurance required
  • VA rules limit the amount a borrower can be charged for closing costs
  • A borrower does not have to be a first-time homebuyer
  • No prepayment penalties
  • Benefit is reusable
  • Low interest rates
Cons:
  • VA home loans require a funding fee
  • Cannot be used for an income property
  • Must meet certain service requirements