Rate Direct

A VA loan is a mortgage guaranteed by the US Department of Veterans Affairs, available to eligible veterans, active-duty service members, and surviving spouses. VA loans offer the most favorable terms of any mortgage product: zero down payment, no private mortgage insurance, competitive interest rates, and flexible qualification requirements. For eligible borrowers, there is often no better financing option.

Eligibility Requirements

VA loans are available to veterans who served at least 90 consecutive days during wartime or 181 days during peacetime, active-duty service members who have served at least 90 days, National Guard and Reserve members with at least 6 years of service (or 90 days of active duty), and surviving spouses of veterans who died in service or from a service-connected disability. You will need a Certificate of Eligibility (COE) to prove your eligibility, which your lender can obtain electronically.

Zero Down Payment

The single biggest advantage of a VA loan is 100% financing — no down payment required. This alone can save tens of thousands of dollars compared to conventional or FHA financing. There are no maximum loan limits for borrowers with full entitlement. For those with reduced entitlement (partial entitlement already in use), county-based limits apply.

No Mortgage Insurance

VA loans do not require private mortgage insurance (PMI) or any equivalent monthly insurance payment, regardless of LTV. This saves borrowers hundreds of dollars per month compared to conventional loans with less than 20% down or FHA loans with their permanent MIP. The only upfront cost is the VA Funding Fee.

VA Funding Fee

The VA Funding Fee is a one-time payment that helps sustain the VA loan program. For first-time VA loan users with no down payment, the fee is 2.15% of the loan amount. Subsequent users pay 3.3%. The fee decreases with larger down payments: 1.5% with 5% down, 1.25% with 10% or more down. Veterans with service-connected disabilities are exempt from the funding fee entirely. The fee can be financed into the loan.

Interest Rates

VA loan rates are consistently among the lowest available for any mortgage product. Because the VA guaranty protects lenders against loss, they can offer lower rates than conventional or FHA loans. VA rates are typically 0.25% to 0.5% lower than comparable conventional rates. Combined with no PMI, the effective monthly savings can be significant.

Credit and DTI Requirements

The VA does not set a minimum credit score, but most lenders require at least 620. The VA uses residual income (money left over after all debts and expenses) rather than DTI ratio as the primary qualifier. While 41% DTI is the benchmark, higher ratios are approved regularly when residual income requirements are met. This makes VA loans more flexible than conventional financing for borrowers with higher debt loads.

Property Requirements

VA loans are for primary residences only. Eligible property types include single-family homes, condos (VA-approved), townhomes, and 2-4 unit properties (you must occupy one unit). The property must meet VA Minimum Property Requirements (MPRs), which are similar to FHA standards — the home must be safe, structurally sound, and sanitary. VA appraisals are assigned through a regional center and may take longer than conventional appraisals.