FAQ: What Are the VA Home Loan Requirements?

This article was originally published on May 7, 2021 and updated on August 22, 2024.

Do you qualify for a VA home loan? Are you fully aware of the benefits available to you as a veteran or active duty service member? 

And most importantly: Are you equipped with the information you need to make the best decision for your financial future?

Veterans Affairs (VA) mortgages are designed to honor and support those who have served our country by making homeownership more accessible and affordable. These unique home loans come with a range of powerful benefits, from no down payment requirements to lower interest rates, making them one of the most valuable perks available to those who qualify.

In this comprehensive guide, we'll walk you through everything you need to know about VA home loan requirements, including:

• Who qualifies, 
• How these loans work, and 
• The many benefits they offer. 

Whether you're looking to purchase your first home, refinance an existing mortgage, or simply exploring your options, this article will help you determine if a VA loan is the right choice for your next move.

What Is A VA Mortgage Loan?

A VA mortgage loan is a home financing option backed by the U.S. Department of Veterans Affairs, designed to honor and serve those who have served our country. 

This exclusive benefit is available to eligible active-duty service members, veterans, members of the National Guard, reservists, and, in some cases, their surviving spouses. For many, it represents one of the most valuable and impactful perks of military service, providing an opportunity to achieve the dream of homeownership with significant financial advantages.

What makes VA loans stand out is their exceptional benefits that go beyond the typical mortgage:

•  VA loan requirements are often easier to meet. 
• There’s no down payment required, which means you can finance 100% of the home’s value without the burden of saving for a large upfront cost. 
• These loans often come with lower interest rates compared to conventional loans, saving you money over the life of the loan.
•  Unlike other mortgage options, VA loans don’t require private mortgage insurance (PMI), which can result in substantial monthly savings.

VA loans are also versatile and can be used for a variety of purposes, including buying, building, refinancing, or even improving a home. 

Whether you're interested in purchasing a new home, refinancing an existing mortgage to take advantage of better rates, or funding home improvements, a VA mortgage can be tailored to meet your needs. These loans can be used to finance one to four-family residences, offering flexibility in the type of property you wish to own, as well.

These loans are more accessible as they often have more lenient credit requirements than traditional mortgages, making them accessible to a broader range of veterans and service members. 

Even if your credit isn’t perfect, this program has a lower minimum credit score which is designed to help you secure a mortgage, reflecting the government’s commitment to supporting those who have served.

VA loans are a testament to the value placed on military service. 

By offering favorable terms, flexible usage, and significant cost savings, VA home loans provide an unparalleled opportunity for eligible service members and their families to build a secure and stable future through homeownership.

The Benefits of a VA Mortgage

As mentioned above, choosing a VA home loan comes with a host of benefits and advantages that make it one of the most appealing home financing options available. 

Here’s why a VA loan is the preferred option for those who qualify:

No Down Payment Required

One of the standout features of the VA mortgage is that it offers 100% financing. That’s right—there’s no need for a down payment, allowing you to purchase a home without having to save up for a large upfront cost.

Lower Interest Rates

By reducing the risk for lenders, the VA encourages them to offer some of the lowest interest rates available. 

For those looking to reduce monthly payments through refinancing, VA Interest Rate Reduction Refinance Loan (IRRRL) are also available. This means you can enjoy more affordable monthly payments and save thousands over the life of your loan.

Simplified Underwriting

The VA loan program is crafted to make homeownership accessible. 

Both the VA and lenders work to streamline the qualification process, ensuring it’s as easy as possible for you to secure a loan, while still maintaining responsible lending practices.

Investment Opportunities While Financing Your Home

VA loans can be used to finance not just single-family homes, but also duplexes, triplexes, and fourplexes.

This means you can live in one unit and rent out the others, allowing your tenants to cover your mortgage—and potentially even provide extra income—while you live virtually rent-free.

Higher Loan Limits

One of the more recent advantages introduced to VA loans is the removal of maximum loan limits. 

Unlike other loan programs that cap the amount you can borrow well below the average home price— in areas like Seattle—this loan option allows you to borrow more, making it easier to purchase your dream home.

Lower Credit Score Requirements

Even if your credit isn’t perfect, VA loans are still within reach. 

The program is designed to accommodate lower credit scores, often down to the low 600s, giving you the opportunity to qualify even if your credit history is less than stellar. However, it’s important to note that credit requirements can evolve over time.

With these benefits, a VA mortgage isn’t just a loan—it’s a powerful opportunity to help you achieve homeownership with ease and confidence.

VA Loan Eligibility: Who Qualifies?

To fully benefit from all of the impressive qualities of this loan option, it’s important to have a clear understanding of the VA loan eligibility requirements.

VA loans are available to military service members and others connected to the military who have met minimum service requirements. The best way to check your eligibility is to clearly identify which category you fall into based on your experience and role.

To qualify for the a VA loan, you generally need to belong to one of the following categories:

• Have been and are currently on active duty for at least 90 continuous days.
• Have served 90 days to 24 months continuously (depending on the period and if it was during war time).
• Were discharged for a service connected disability.
• Have served 6 creditable years in the National Guard or Selected Reserve.
• Be the surviving spouse of a veteran, POW or MIA.

You may also qualify if:

• You were a member of a military academy.
• Have been a public health service officer.
• Were an officer at the NOAA.

You may not qualify if you received a bad conduct, dishonorable discharge, or anything other than honorable discharge. However, there are many exceptions, including applying for a discharge review or upgrade. If you are unsure, inquire about your eligibility for the loan program through the US Department of Veteran Affairs.

Where To Get A VA Home Mortgage Loan

Now that you've identified that you're eligible for a VA loan, it's time to get started with the process. 

Unlike conventional loans, VA loans are guaranteed by the U.S. Department of Veterans Affairs, but they are still issued by private lenders. This guarantee significantly reduces the lender’s risk, as the VA provides a safety net if you are unable to make your mortgage payments and face foreclosure. This is referred to as a VA-backed purchase loan.

With this backing, lenders will offer more favorable terms, such as no down payment, competitive interest rates, and no private mortgage insurance (PMI) requirements. 

The goal of the VA loan options is to provide a substantial benefit to those who have served in the military and their families, while also promoting the advantages of homeownership. 

To secure a VA home mortgage loan, you have some options: 

1. You can work with a VA-approved direct lender.
2. You can reach out to a knowledgeable mortgage broker who can guide you through the process. 
3. You can obtain a VA loan through a VA Regional Loan Center.

By choosing a VA-approved lender or an experienced mortgage broker, you can take full advantage of these benefits and find the right loan to fit your needs. Many find that partnering with a trusted mortgage broker offers a more personalized experience.

Getting Started: The VA Loan Process

That custom experience can make all the difference. With the right guidance,  getting your VA loan can be a smooth and rewarding process. 

Here’s a step-by-step overview to help you get started:

1. Determine Your Eligibility

The first step to getting a VA loan is to determine your loan guarantee eligibility. 

To confirm your eligibility for the program, you’ll need to obtain a Certificate of Eligibility (COE), which serves as proof that you meet the necessary service requirements to qualify for a VA loan. This certificate is essential for moving forward with the loan process.

2. Gather Your Documents

Before you apply for your loan, gather all necessary documents. 

These typically include your COE, proof of military service, pay stubs, tax returns, and bank statements. These documents can take time to procure, so get started with this process as soon as possible. Having these documents ready will speed up the application process.

3. Choose a VA-Approved Lender

Not all lenders offer VA loans, so it’s important to choose a VA-approved lender or a knowledgeable mortgage broker who specializes in VA options. 

These professionals understand the unique aspects of the process and can guide you through each step.

4. Pre-Approval

Once you’ve selected a lender, the next step is to get pre-approved for a loan. 

Pre-approval involves a review of your financial situation, including your income, credit score, and debt-to-income ratio. This step will give you a clear idea of how much home you can afford and will strengthen your offer when you find the right property.

5. Find Your Home

With pre-approval in hand, you can begin your home search. 

It's in your best interest to work with a real estate agent who has experience with those working with VA options, as they will be familiar with properties that meet VA loan property requirements. 

These requirements are designed to ensure that the home is safe, sound, and sanitary. Your agent will help you identify homes that comply with the VA's minimum property requirements, which include aspects like adequate roofing, proper ventilation, and reliable heating systems.

6. Make an Offer

Once you’ve found the perfect home, your agent will help you make an offer. 

If your offer is accepted, you’ll move on to the next steps, including inspections, appraisals, and finalizing your loan application.

7. VA Appraisal

To comply with all VA home loan requirements, the property must be evaluated by a VA-approved appraiser. 

This appraisal ensures that the home meets the VA's minimum property requirements and confirms that its value aligns with the agreed-upon purchase price. If the property passes the appraisal, you’ll be one step closer to closing on your loan.

8. Close on Your Loan

The final step is closing. 

During the closing process, you’ll sign the necessary paperwork to finalize your loan and officially take ownership of your new home. Be sure to review the loan terms, including the interest rate, loan amount, and any fees, before signing.

By following these steps and working with experienced professionals, you can successfully navigate purchasing your home and take full advantage of the benefits this program offers.

VA Funding Fees and Closing Costs

To keep the VA loan program sustainable and ensure benefits remain available for future service members, veterans, and their families, you may be required to pay a VA funding fee at closing.

This fee typically ranges from 0.5% to 3.6% of the loan amount, depending on factors such as the type of loan, whether a down payment is made, and the total loan amount.

However, there are exceptions that may qualify you for a waiver or refund of the VA funding fee. These exceptions include:

• Earning a Purple Heart.
• Receiving service connected disability compensation.
• Being the surviving spouse of a veteran.

It’s important to ask about these and other potential exceptions to see if you qualify. 

If you are required to pay the VA funding fee, you also have the option to finance it into your loan, allowing you to spread the cost over the life of the mortgage.

FAQ: Can I Get A Second VA Home Loan?

The VA home loan is a lifetime benefit for eligible members of the military, offering the flexibility to purchase additional properties—under certain conditions. 

While your total VA loan entitlement can only be used across the outstanding balance of any VA-financed homes, there are several ways to leverage your Certificate of Eligibility for new purchases.

Sell Your Home & Buy Another

If you sell your current home and pay off the existing VA loan balance, you can restore your full VA loan entitlement. 

To do this, simply file VA Form 26-1880 to have your eligibility reinstated. With your new COE, you can then apply for a VA loan to purchase your next home.

Refinance or Pay Off Your Home

If you wish to keep your current property and buy another, you can either refinance your existing VA loan with a non-VA mortgage or pay off the remaining balance. 

This allows you to free up your VA entitlement for a new loan.

Have Another Veteran Assume Your Loan

One lesser-known feature of VA home loans is that they are assumable. This means you can sell your home and have the buyer take over your existing VA mortgage, making the sale easier. 

If a veteran or another qualified individual assumes your loan, you can then reinstate your eligibility and use it to purchase a new property with a VA loan.

Get a Second VA Home Loan

If you haven’t used the full amount of your VA entitlement, you may be able to obtain a second VA loan simultaneously. This only applies to certain circumstances like military reassignment.

 For instance, if you’re reassigned to a new location and have $400,000 in VA loan eligibility, but only owe $150,000 on your current VA loan, you could rent out the current property and use the remaining $250,000 of your entitlement to purchase a new home.

By understanding these options, you can effectively use your VA loan benefits to acquire additional properties as your needs change.​

The Most Popular VA Home Loan Products

At Seattle's Mortgage Broker, we're proud to work with those who have bravely served in the Armed Forces. Here are some of our loan products available to veterans.

VA Elite

With SMB's Elite Washington VA home loan, you’ll find industry-leading government rates and pricing.

Program highlights include:

• 640+ FICO.
• $175,000 minimum loan limit.
• Maximum loan amount can exceed county limits.
• All fixed term mortgages.
• Single family primary residences.

VA IRRL

The VA Interest Rate Reduction Loan offers the simplest refinancing option. 

This may be the perfect choice if you’re looking to keep your balance low and only restructure the term or rate. This loan allows you to take full advantage of your VA benefits by streamlining your current VA loan into a lower interest rate.

• LTVs available up to 150%, unlimited CLTV.
• No appraisal.
• Maximum loan amount can exceed county loan limits.
• AVM run prior to submission, no surprises on calculated value.
• Elite pricing available to those who qualify.

Secure Your VA Loan with Seattle's Mortgage Broker

Navigating the VA loan process can be complex, but you don’t have to do it alone. 

Whether you’re purchasing your first home, refinancing for better terms, or exploring the possibility of a second VA loan, Seattle’s Mortgage Broker is here to help you every step of the way. 

With our deep understanding of VA loans and an unwavering commitment to serving those who have served, we’ll ensure you maximize your benefits and make the best financial decisions for your future.

Don’t leave your VA loan to chance. Work with a trusted expert who has your best interests at heart. Contact Seattle’s Mortgage Broker today to get started.