What is a VA Loan?

What is a VA Loan? – Overview

The US Department of Veterans Affairs (VA) provides a range of services for veterans, though not all veteran needs are addressed by this single organization.

The VA handles everything extremely efficiently, from providing affordable healthcare and rehabilitation to helping veterans cope with challenges in civilian life.

The department also offers loans to ex-service members for various purposes, including loans to buy or refurbish their homes to be more disabled-friendly.

Service members and veterans alike can apply for the VA home loan. This loan often does not require a down payment, though credit score can influence the terms offered.

Thousands of qualified service members and veterans use VA loans each year to buy a home for themselves and their families.

Let’s look at some of the major factors you need to know about VA loans.

How does the VA Loan work?

The VA guarantees a portion of the loan, but it does not collaborate with private insurance companies for this purpose.

The Department of Veterans Affairs assures a portion of every VA loan, so the borrower does not need to make a down payment or pay for private mortgage insurance.

The VA home loan is useful if you plan to buy a house that you will use as your primary residence. The VA home loan is intended for primary residences, not for buying second homes or investment properties.

The loan is solely for the borrower to pay for buying a new home, remodeling an existing home, or making their home more disabled-friendly.

Veterans and service members can receive more than one VA loan during their lifetime.

What is the difference between a VA Loan and a Conventional Loan?

Usually, mortgage companies do not approve home loans for applicants with a credit score of less than 620. However, you can get a VA loan regardless of your credit score.

Besides, a VA loan does not require you to make any down payment. VA loan borrowers must make monthly payments, often referred to as EMIs. The lender also foregoes the miscellaneous additional charges that conventional lenders usually charge to borrowers, along with the minimum down payment.

However, it is a common misconception that VA loan interest rates are usually lower than those of conventional loans. To find the actual cost of the VA loan, you should focus on the annual percentage rather than the stated interest rate.

What are the Eligibility Requirements for a VA Loan?

VA loans are available to members of the Army, Navy, Air Force, Marine Corps, Coast Guard, and certain reservists and National Guard members. Your service tenure should be more than 181 continuous days during peacetime or at least 90 days of service during wartime.

Service members dishonorably discharged are not eligible for a VA loan; eligibility for others depends on the length and type of service.

In addition, if you have been a member of the National Guard and a Reserve and served actively for at least 90 days, or if a service member has been discharged due to service-related injuries, then you can also qualify for the VA loan.

You must submit a certificate of eligibility to apply for the VA loan. To do this, you can either apply for the certificate of eligibility online, by mail or request your VA lender to post it to you.

VA loans are also offered to surviving spouses of service members who died in the line of duty or from service-related disabilities.

Apart from being a service member, you must also ensure that you fulfill the minimum financial requirements, such as the ability to repay the mortgage. Even if you filed for bankruptcy two years ago, you can still apply for a VA loan.

How to apply for a VA Loan?

The Veteran Affairs Department does not issue the loan directly. Instead, you must approach a mortgage lender, credit union or bank.

Not all lenders offer VA loans, but many do, including some that specialize in these loans. There are even lenders who specialize in offering VA loans.

What is the maximum amount loaned through VA Loans?

There are no set limits on the amount you can borrow with a VA loan, but the available entitlement and other lending criteria limit it. However, based on your VA entitlements, the department or lender restricts how much you can borrow without a down payment.

In addition, your specific total loan amount from the VA will depend on the amount you can afford to repay, determined by your income and debts.

What are the benefits of VA Loans?

These are the express benefits you get when you receive a VA home loan:

  • No PMI
  • No maximum loan amount limit
  • No down payment needed
  • No minimum credit score is required
  • Easy refinancing
  • Loan modifications are available.


The VA loan is incredibly helpful for active and former service members to buy their dream homes. This is an easy and affordable way to finance a new home, remodel the existing one or make your residence more disabled-friendly.

To determine if you qualify for a VA loan, we advise you to consult with the nearest VA lender or contact your local VA office.

See Also

Dental Implants for Veterans

Medical Grants for Veterans

What is HVRP

Best Medical School Loans

Current Version
September 21, 2021
Written By
Shubham Grover
April 13, 2024
Updated By
Andrea Morales G.

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