Ellie Mortgage

VA Loans

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If you’re an eligible service member, veteran or qualifying military spouse, you can get a VA loan to buy a home with no down payment — and you don’t have to pay monthly mortgage insurance. It’s also easy to qualify for a VA loan, even if your credit isn’t perfect. But you’ll pay a funding fee in most cases, which can add to the cost.

What is a VA Loan?

A VA loan is a mortgage that’s insured by the Department of Veterans Affairs and is designed to help active-duty service members, eligible veterans and qualifying spouses buy property. They can be used to:

  • Buy a home
  • Buy a Cond in a VA approved building
  • Build a home
  • Purchase and improve a home
  • Make energy-efficiency improvements to your existing home
  • Buy a lot and/or a manufactured home
  • Refinance an existing loan

If you’re eligible, VA loans are easy to qualify for, since there’s no down payment required, no minimum credit scores, and no maximum limit on how much you can borrow relative to income.

Who can qualify?

Meet Service Requirements:

Find out how long you’d have to serve via the VA website.

Spousal Rights

You’re an unremarried spouse of a service member who died from a service-connected disability, who died in service. Or if you are an eligible spouse who is receiving Dependency and Indemnity Compensation Benefits. Or you are the spouse of a service member who is missing in action or is a prisoner of war.

Steady Income and Proof of Employment

You must verify two years of employment. If your monthly debt, including housing costs, will exceed 41% of your monthly gross income, you may need better credit or a down payment.

Your credit is satisfactory

Past foreclosures or bankruptcies won’t necessarily prevent you from qualifying.

Are you ready to apply?

Apply Now

Frequently Ask Questions

The VA doesn’t make loans, so borrowers must find a private lender that is part of the VA loan program and willing to offer affordable financing.

Different lenders have different qualifying criteria. But the VA encourages lenders to make VA loans available to all qualified veterans that apply. The government guarantees a portion of the loan to pave the way to easier approval. But that government guarantee doesn’t protect you, the borrower, if you don’t pay your mortgage. You can still lose your home to foreclosure if you don’t repay your loan. If you do run into trouble as a VA mortgage holder, there’s a dedicated VA staff to help.
VA loans differ from conventional mortgages in many important ways:
  • VA loans have different down-payment requirements: If you’re eligible for a VA loan, there’s a good chance you won’t need a down payment. However, the VA does require one if the home purchase price is more than the property’s appraised value. Further, lenders may require a down payment in some situations. Most conventional loans require at least a small down payment. If you’re considering a VA loan, you should check into down payment requirements with a loan specialist at your regional VA office and with your lender.
  • You can qualify for a VA loan with lower credit scores: There is no minimum-credit-score requirement for VA loans. Lenders offering conventional loans, on the other hand, typically have credit-score requirements.
  • VA loans have different insurance requirements: You don’t have to pay for private mortgage insurance to protect your lender if you get a VA loan, no matter how low your down payment. When you obtain a conventional loan, you’re typically required to pay for private mortgage insurance if you put less than 20% down
  • There’s a one-time VA funding fee: You must pay the fee unless you fall into an exception. This fee, which isn’t charged on conventional mortgages, can be the biggest downside to a VA loan. While the fee can be added to the loan amount, this means paying it back over many years.
  • The VA limits the closing costs you’ll pay: Sellers can also pay closing costs, although a seller’s contribution can’t exceed 4% of the loan. Many conventional lenders limit a seller’s contribution to the closing costs to 3% to 6%.
  • There’s no maximum debt-to-income limit: A debt-to-income limit caps the total costs of your debt, including housing costs. With conventional lenders, it’s typically capped at 43%. The VA doesn’t impose a limit, but you may have to provide more proof of your ability to pay if your debt with the loan will exceed 41% of your gross income on a monthly basis.
There’s no limit set by the VA on how much you’re allowed to borrow for a home. But the VA does cap the amount of insurance provided to the lender, and most lenders limit the loan amount as a result. You can find out the limit in any U.S. County through the VA website.
Applying for a VA loan is different from applying for a conventional mortgage, and this affects the home-buying process.

The VA recommends working with a real estate agent who’s familiar with VA loans and getting prequalified with a lender before making an offer.

There are several steps to applying for a VA loan, including:
  • Obtaining a certificate of eligibility, which verifies to the lender that you meet minimum eligibility requirements.
  • Comparing offers from different VA lenders to find the best interest rate and most affordable fees for you.
  • Submitting a loan application and providing financial information, including pay stubs and bank statements.
  • Obtaining a VA appraisal, which is ordered by the lender.
Your credit information, income and the value of the home will be reviewed, and then the lender will either approve or deny your loan. Make sure your purchase agreement has a clause called a “VA option clause,” which allows you to avoid financial penalties if the home doesn’t appraise high enough.

When your loan is approved, the lender will choose a representative to conduct a closing, during which the money can be released, and the property transferred to you.