The VA home loan benefit, from service record to front door
Chapter 1: how the benefit works
Bottom line
A VA-approved private lender makes the loan, and VA guarantees part of it. Because of that guarantee, lenders can offer terms such as no required down payment in many cases and no monthly mortgage insurance. You still qualify with the lender on credit and income, and there is usually a one-time VA funding fee unless you are exempt.
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Three parties
You bring the service record and entitlement. The lender underwrites your credit and income. VA backs part of the loan through its guarantee and sets the program rules, published on the VA home loans pages.
Down payment and the funding fee
With full entitlement VA does not require a down payment, though a lender may set its own rules. Most borrowers pay a one-time funding fee; veterans receiving VA disability compensation are generally exempt.
How long approval takes
It varies with the lender, the appraisal and how quickly documents arrive. A Certificate of Eligibility is often available online quickly; the VA appraisal and underwriting take longer.
What can disqualify you
- Service that does not meet the eligibility rules, or a discharge that bars benefits.
- Credit or income that the lender cannot approve.
- A home that will not be your primary residence.
- A property that fails the minimum property requirements.
What veterans and families ask
Do VA loans require a down payment?
VA does not require one for buyers with full entitlement, though lenders may set their own rules and a down payment can be needed when entitlement is partly used.
How long does it take to get approved for a VA home loan?
It depends on the lender, the appraisal and your paperwork. The Certificate of Eligibility can be quick; appraisal and underwriting take longer.
What disqualifies you from a VA home loan?
Not meeting service requirements, a discharge that bars benefits, credit or income the lender cannot approve, a non-primary residence, or a property that fails VA's minimum requirements.
What is a 10 percent VA disability rating?
It is a VA rating for a service-connected condition. Veterans receiving disability compensation at any rating are generally exempt from the VA funding fee.