VA Home Loans: A Valuable Benefit You’ve Earned

Making Homeownership More Accessible for Those Who Serve

A VA home loan can be one of the most valuable benefits available to eligible service members, Veterans, and certain surviving spouses. It may help you purchase a home with no down payment, no monthly private mortgage insurance, and competitive loan terms.

As a Military Relocation Professional and Florida Military Specialist, I understand that military buyers often have unique timelines, PCS requirements, and questions. I’m here to help you understand the process, find the right property, and work with an experienced VA lender from the beginning through closing.

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What Does “VA Loan” Mean?

“VA” stands for the United States Department of Veterans Affairs.

A VA loan is a mortgage made by a private lender, such as a bank, credit union, or mortgage company. The Department of Veterans Affairs guarantees a portion of the loan, which reduces the lender’s risk and allows the lender to offer eligible borrowers favorable terms.

The VA does not typically lend the money directly. It provides the guaranty that supports the loan.

Who May Qualify for a VA Home Loan?

You may qualify if you fall into one of these categories:

Active-Duty Service Members

You may meet the basic service requirement after serving at least 90 continuous days on active duty.

Veterans

Eligibility depends on when you served, how long you served, and the character of your discharge. Veterans who served during wartime and peacetime periods may have different minimum service requirements.

National Guard Members

You may qualify based on certain periods of qualifying active-duty service or after completing six creditable years in the National Guard and meeting the applicable service or discharge requirements.

Reserve Members

You may qualify after certain periods of non-training active-duty service or after completing six creditable years in the Selected Reserve and meeting the applicable requirements.

Certain Surviving Spouses

Some surviving spouses may qualify, including certain spouses receiving—or eligible to receive—Dependency and Indemnity Compensation. A spouse of a service member who is missing in action or being held as a prisoner of war may also qualify.

Even if you are unsure whether your service meets the requirements, it is worth checking. Certain service-connected disabilities and qualifying discharge circumstances may affect eligibility.

Your Certificate of Eligibility

A Certificate of Eligibility, commonly called a COE, confirms to a lender that you meet the VA’s military-service eligibility requirements.

You can request a COE directly through the Department of Veterans Affairs, or a VA-approved lender can often obtain it for you.

A COE establishes your eligibility for the benefit, but it does not automatically approve you for a mortgage. You must also meet the lender’s requirements for income, credit, debts, and ability to repay the loan.

Important Benefits of a VA Loan

No Down Payment May Be Required

Qualified buyers may be able to finance 100% of the home’s purchase price, provided the property appraises for at least the agreed-upon price and the buyer meets the lender’s requirements.

No Monthly PMI

VA loans do not require private mortgage insurance or FHA-style monthly mortgage insurance. This can help reduce the monthly payment compared with some other low-down-payment loan programs.

Competitive Interest Rates

Because the VA guarantees a portion of the loan, lenders may offer competitive interest rates and terms. Rates and fees vary, so buyers should compare lenders.

Limited Closing Costs

The VA limits certain fees that may be charged to the borrower. Buyers and sellers may also negotiate for the seller to pay some allowable closing costs.

No Prepayment Penalty

A VA loan may be paid off early without a VA prepayment penalty.

The Benefit May Be Used More Than Once

A VA home loan is not necessarily a one-time benefit. Eligible borrowers may be able to restore and reuse their entitlement after selling or refinancing a property and paying off the previous VA loan.

In some circumstances, a borrower may even have remaining entitlement available while another VA loan is still outstanding.

Is There a VA Loan Limit?

Borrowers with full VA entitlement generally do not have a VA-imposed loan limit. However, this does not mean they can borrow an unlimited amount.

The lender must still confirm that:

• The borrower can afford the payment
• The borrower meets the lender’s credit and income requirements
• The property’s appraised value supports the purchase price
• The property meets applicable VA requirements

Borrowers with remaining or partial entitlement may be affected by county conforming loan limits and could need a down payment.

What Is the VA Funding Fee?

Most VA borrowers pay a one-time VA funding fee. The fee helps support the loan program and allows it to continue offering benefits such as no required down payment and no monthly mortgage insurance.

The amount may depend on:

• Whether this is your first or a subsequent use of the benefit
• The amount of your down payment
• The type of VA loan
• Whether you qualify for an exemption

The funding fee can usually be paid at closing or financed into the loan.

Some borrowers are exempt, including many Veterans receiving compensation for a service-connected disability, certain eligible surviving spouses, and qualifying Purple Heart recipients on active duty.

Your lender should verify your funding-fee status before closing.

What Types of Homes Can You Purchase?

Depending on the property and lender, a VA purchase loan may be used for:

• A single-family home
• A property with up to four residential units, when the borrower occupies one unit
• A condominium in a VA-approved project
• Certain manufactured homes and lots
• New construction
• A home that includes approved improvements or energy-efficient features

The home must generally be used as the borrower’s primary residence. A VA loan is not intended solely for purchasing a vacation home or investment property.

VA Appraisal vs. Home Inspection

These are two different services, and buyers should understand the distinction.

VA Appraisal

The VA appraisal helps determine the property’s reasonable value and whether the home appears to meet the VA’s Minimum Property Requirements for safety, sanitation, and structural soundness.

Home Inspection

A professional home inspection is a more detailed examination of the home’s condition, including its major systems and components.

A VA appraisal is not a substitute for an independent home inspection. I strongly recommend that buyers obtain the appropriate inspections during the contract inspection period.

Depending on the home and its location, buyers may also consider inspections for wood-destroying organisms, septic systems, wells, roofs, HVAC equipment, plumbing, electrical systems, wind mitigation, and insurance eligibility.

Does the Home Have to Be in Perfect Condition?

No. A VA-financed home does not have to be brand new or cosmetically perfect.

However, the property must meet applicable VA Minimum Property Requirements. Issues affecting safety, sanitation, or structural soundness may need to be repaired before closing.

Examples could include:

• Active roof leaks
• Unsafe electrical conditions
• Broken windows
• Peeling paint in certain older homes
• Inadequate heating
• Certain wood-destroying organism concerns
• Unsafe access or structural problems

Every property and appraisal is different. The VA appraiser identifies required repairs—not the real estate agent, seller, or buyer.

Does the VA Require a Minimum Credit Score?

The Department of Veterans Affairs does not establish one universal minimum credit score for all VA-backed loans. Individual lenders may set their own credit requirements.

A lender will also review factors such as:

• Income and employment
• Monthly debts
• Credit history
• Residual income
• Available funds for closing
• Overall ability to repay the loan

A lower credit score does not automatically mean you cannot qualify. Speaking with an experienced VA lender is the best way to understand your available options.

Will You Need Money at Closing?

“No down payment” does not always mean “no money needed.”

A buyer may still need funds for items such as:

• Earnest money deposit
• Home inspection
• VA appraisal
• Closing costs
• Prepaid property taxes and homeowners insurance
• Insurance inspections
• Any difference between the purchase price and appraised value
• Optional down payment
• Expenses not covered by negotiated seller credits

Some deposits or advance payments may be credited back to the buyer at closing, depending on the transaction and final settlement statement.

Can the Seller Pay the Buyer’s Closing Costs?

Yes. The buyer may negotiate for the seller to pay allowable closing costs.

The VA does not limit seller credits applied to ordinary loan closing costs, but certain items classified as seller concessions are generally limited to 4% of the home’s reasonable value. The contract, appraisal, lender approval, and the seller’s willingness all affect what may be negotiated.

Seller-paid costs are not automatic and should be discussed before making an offer.

Common VA Loan Myths

“VA loans take much longer to close.”

Not necessarily. A knowledgeable lender, real estate professional, and closing team can often complete a VA transaction within a timeline similar to other financed purchases.

“Sellers have to pay all of the buyer’s closing costs.”

No. Some costs may be negotiated, but the seller is not automatically required to pay all of them.

“A VA loan can only be used once.”

No. Eligible borrowers may be able to restore and reuse their benefit.

“VA buyers cannot compete with conventional or cash buyers.”

VA financing can be a strong offer when the buyer is properly preapproved and the transaction is presented clearly.

“The VA guarantees that the home has no defects.”

No. The VA loan guaranty protects the lender against a portion of the loss if the borrower defaults. It is not a warranty covering the condition of the home.

A Simple VA Home-Buying Roadmap

1. Confirm Your Eligibility

Obtain your Certificate of Eligibility or ask a qualified lender to retrieve it.

2. Speak With a VA-Experienced Lender

The lender reviews your income, debts, credit, entitlement, estimated payment, and available funds.

3. Get Preapproved

A preapproval helps establish a realistic price range and strengthens your offer.

4. Hire a Real Estate Professional Who Understands VA Transactions

Your agent should understand VA financing, military relocation timelines, appraisal requirements, inspections, and how to communicate the strength of your offer.

5. Find the Right Home

Consider the location, commute, insurance costs, property taxes, resale value, condition, and whether the property is suitable for VA financing.

6. Make an Offer

Your offer may include financing, appraisal, inspection, closing-cost, and occupancy terms tailored to your situation.

7. Complete Inspections and the VA Appraisal

Use the inspection period to learn about the home’s condition. The lender orders the VA appraisal.

8. Complete Underwriting

Continue providing documents promptly and avoid making major financial changes before closing.

9. Review Your Final Loan Documents

Carefully review your interest rate, payment, cash needed to close, funding fee, closing costs, taxes, and insurance.

10. Close and Receive the Keys

Once the loan is approved, documents are signed, and funds are received, ownership can transfer to you.

Before You Apply: Helpful Tips

• Avoid opening new credit accounts without speaking with your lender.
• Do not finance a vehicle, furniture, or appliances before closing without lender approval.
• Continue making all payments on time.
• Keep your lender informed about changes in employment, income, debts, or marital status.
• Save bank statements, pay statements, tax documents, military orders, and other requested records.
• Compare the complete loan terms—not only the advertised interest rate.
• Ask for estimates of property taxes, homeowners insurance, flood insurance, and HOA or condominium fees.
• Do not waive important inspections simply to make an offer more attractive without fully understanding the risks.

Ready to Explore Your VA Home-Buying Options?

You do not need to know every answer before getting started. I can help you connect with an experienced local VA lender, understand the home-buying process, and search for properties that fit your needs.

Whether you are active duty, a Veteran, transitioning out of the military, relocating through a PCS, or a qualifying surviving spouse, you deserve clear answers and professional guidance.

Susan De Leon, Realtor® and Broker Associate

Military Relocation Professional (MRP)
Florida Military Specialist (FMS)
Down to Earth Trusted Advisor Since 2004

Serving Navarre, Navarre Beach, Gulf Breeze, Mary Esther, Fort Walton Beach, Destin, Pace, Milton, Pensacola, and Florida’s Emerald Coast.

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Important Information

This information is provided for general educational purposes and is not a commitment to lend, a determination of eligibility, or legal, tax, insurance, or financial advice. VA eligibility and mortgage approval are determined by the Department of Veterans Affairs and the participating lender. Loan programs, fees, rates, property requirements, and eligibility guidelines may change. Buyers should consult a qualified VA-approved lender and other appropriate professionals regarding their individual circumstances.