A good fit if
- You're an eligible veteran, service member, or surviving spouse
- You're buying or refinancing the home you live in
- You want to avoid monthly mortgage insurance
Probably not if
- You don't have VA eligibility
- It's an investment property
- You've used your full entitlement and haven't restored it
How VA Loans Work
The Department of Veterans Affairs guarantees part of the loan, which lowers the lender's risk. That's why VA loans can offer strong terms with no monthly mortgage insurance, and why eligible borrowers with full entitlement can buy with no down payment. Most borrowers pay a one-time VA funding fee, which can be rolled into the loan. Veterans receiving VA disability compensation, and some others, are exempt.
VA Loan Eligibility
Eligibility depends on your length and type of service. Veterans, active-duty service members, many National Guard and Reserve members, and some surviving spouses can qualify. You'll need a Certificate of Eligibility (COE), which I can usually request for you online in minutes.
VA Loan Requirements
- Credit score: the VA doesn't set a minimum, but lenders do, commonly around 580–620.
- Debt-to-income: 41% is the VA's benchmark, and higher ratios are allowed when residual income is strong.
- Residual income: the VA checks how much money is left each month after your major expenses, based on family size and region. This is a key test unique to VA loans.
- Occupancy: you must live in the home as your primary residence, generally within 60 days of closing. Deployment exceptions exist.
- Property: the VA appraisal confirms value and that the home meets minimum property requirements.
- Entitlement: with full entitlement, there's no VA loan limit. If part of your entitlement is tied up in another VA loan, county limits can apply to the remaining amount.
VA Funding Fee
The funding fee helps keep the VA program running. The amount depends on your down payment, whether it's your first VA loan, and the loan type. A larger down payment lowers the fee. It's exempt for veterans receiving compensation for a service-connected disability, Purple Heart recipients on active duty, and eligible surviving spouses.
Example: a veteran with full entitlement buys a $650,000 home. The VA allows the purchase with no down payment, and the funding fee can be financed into the loan amount. The seller agrees to cover some closing costs, within VA limits, so the buyer's cash needed at closing is low. Figures are illustrative only.
VA Refinance Options
- IRRRL (VA streamline): lowers the rate on an existing VA loan with less paperwork, and often no appraisal.
- VA cash-out: refinance any loan type into a VA loan and take cash out, for eligible borrowers. Lenders commonly cap it around 90% of the home's value.
See refinancing options and when refinancing makes sense.
How to Qualify for a VA Loan
- Get your Certificate of Eligibility. I can request it for you.
- Review your credit and debts, and estimate your residual income.
- Get pre-approved so you know your budget. See pre-qualification vs. pre-approval.
- Ask the seller for concessions, since VA allows them to help with closing costs.
- Plan for the VA appraisal and any repairs it requires.
VA Loans in High-Cost Areas
Because borrowers with full entitlement don't face a VA loan limit, VA loans can work well in high-cost markets like Los Angeles. Lenders still apply their own credit and residual income guidelines, and the VA appraisal must support the price. If you have reduced entitlement because another VA loan is still active, a down payment may be needed above the county limit.
Documents You'll Need
- DD-214 for veterans, or a statement of service for active-duty borrowers
- Pay stubs and two years of W-2s, or tax returns if self-employed
- VA benefit award letter, if you receive disability compensation
- Two months of bank statements
- Photo ID
VA vs. FHA and Conventional Loans
For eligible borrowers, a VA loan is often the strongest option for a primary home: no required down payment with full entitlement, no monthly mortgage insurance, and flexible credit guidelines. FHA and conventional loans make more sense if you're not eligible, want to preserve entitlement, or are buying a second home or rental, which VA doesn't allow.
VA Loan FAQ
Do VA loans require a down payment?
Not for eligible borrowers with full entitlement, as long as the price doesn't exceed the appraised value. Putting money down is optional and lowers the funding fee.
Can I use my VA benefit more than once?
Yes. Entitlement can be restored after you sell and pay off a VA loan, and in some cases you can have more than one VA loan at a time.
Is there a VA loan limit?
Borrowers with full entitlement generally don't face a VA loan limit, though lender guidelines still apply. If part of your entitlement is in use, limits can apply.
Can I buy a multi-unit property?
Yes, up to four units, as long as you live in one of them.
What credit score do I need for a VA loan?
The VA has no official minimum. Most lenders look for around 580–620, and residual income matters as much as the score.
Can a surviving spouse get a VA loan?
Some surviving spouses are eligible, including spouses of service members who died in service or from a service-connected disability. They're usually also exempt from the funding fee.
Available for properties in California. VA loans are subject to VA and lender guidelines and eligibility. Not all applicants will qualify. NoDocNation is not affiliated with or endorsed by the Department of Veterans Affairs. Not a commitment to lend.