VA Loans are offered through private lenders, mortgage companies, or banks. The Department of Veterans Affairs supports servicemembers, veterans, and qualifying surviving spouses by helping them access affordable mortgage loans.
The Department of Veterans Affairs states, “As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy.”
How Do You Qualify for a VA Loan?
VA Loan candidates are evaluated based on length of service, duty status, and character of service.
The following VA Loan subcategories are available for consideration—each offering different benefits and options depending on the borrower’s unique needs and circumstances:
- Adapted Housing Grants: These loans assist veterans with a permanent and total service-connected disability in purchasing, constructing, or modifying an adapted home to accommodate their disability.
- Native American Direct Loan (NADL) Program: Eligible Native American veterans can finance the purchase, construction, or improvement of homes on Federal Trust Land, or lower the interest rate on an existing VA loan.
- Interest Rate Reduction Refinance Loan (IRRRL): This loan allows borrowers to refinance an existing VA loan at a lower interest rate.
- Purchase Loans: These loans offer competitive interest rates, typically without the need for a down payment or private mortgage insurance.
- Cash-Out Refinance: Borrowers can access cash from their home equity to pay for expenses like school, debt elimination, or home improvements.
VA Loan Advantages
Veterans United says, “For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. These flexible, $0-down payment mortgages have helped more than 24 million service members become homeowners since 1944.”
Get Started with a VA Loan
VA Loans follow similar steps as traditional loans. First, you’ll need to find a VA lender and begin the prequalification process. Prequalification helps borrowers estimate how much they can afford by reviewing income, credit, assets, veteran entitlement, and other financial indicators.
Next is loan preapproval, which leads to a preapproval letter. This letter validates your borrowing power to real estate agents and sellers.
When you’re ready to make an offer, find an agent experienced with VA loans to assist with negotiations and contracts.
Once you are “under contract,” the lender will order a VA appraisal of the property. A VA appraisal ensures that the property meets “fair market value” and the VA’s minimum property requirements.
While the appraisal is being completed, underwriters will review your financial statements and appraisal to move your loan toward closing. At closing, you will sign the necessary legal documents before officially receiving the keys to your new home.
What You May Not Know About VA Loans
- VA Entitlements: These can be used for multiple home purchases, as long as the previous loan is paid off before reapplying.
- VA Loans: These loans are only for primary residences.
- No mortgage insurance: The VA’s backing means borrowers don’t need to buy mortgage insurance, though there is a VA Funding Fee.
- No prepayment penalty: You can pay off your loan early without penalty.
Use our VA loan calculator to determine if this loan product is the right fit for your needs.