VA Loans: A Complete Guide

Key Features of VA Loans

• No down payment required

• No private mortgage insurance (PMI)

• Competitive interest rates

• Limited closing costs

• Flexible credit and income requirements

Minimum Qualifications

Eligibility is determined by military service and a Certificate of Eligibility (COE) from the VA. Most lenders also require:

• Credit Score: 580–620 minimum (lender dependent)

• DTI Ratio: Generally up to 41%, but can go higher with compensating factors

• Stable Income: Consistent, verifiable income for the past two years

• Primary Residence: Must be the borrower’s primary home

Required Documents

You’ll typically need:

• Certificate of Eligibility (COE) from the VA

• DD-214 (for veterans) or Statement of Service (active duty)

• Recent 30 days of pay stubs

• Last 2 years of W-2s or full tax returns

• 2+ months of bank statements

• Government-issued photo ID

• Credit authorization form

VA Funding Fee

Instead of PMI, VA loans require a one-time VA funding fee, which helps keep the program running for future borrowers. The fee varies:

• First-time use with no down payment: 2.15% of the loan amount

• Subsequent use: 3.3% (if no down payment)

• Exemptions: Veterans with service-connected disabilities may be exempt

The funding fee can be rolled into the loan.

Seller Concessions

VA allows sellers to pay up to 4% of the purchase price toward closing costs and other prepaids. This can include:

• Prepaid taxes and insurance

• VA funding fee

• Discount points or lender fees

Property Requirements

• Must be a primary residence

• VA appraisals ensure the home meets Minimum Property Requirements (MPRs)

• Homes must be safe, sanitary, and structurally sound

Loan Limits

As of 2025, VA borrowers with full entitlement are not subject to loan limits, meaning they can borrow above conforming limits without a down payment—if they qualify.

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However, borrowers with partial entitlement (usually due to having an active VA loan or defaulting on a previous one) may still be subject to loan limits. In these cases, the loan cap aligns with the conforming loan limit set by the Federal Housing Finance Agency (FHFA).

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For 2025, that conforming limit is $766,550 in most counties. Borrowers exceeding that limit with partial entitlement may be required to make a down payment equal to 25% of the difference between the home price and the county loan limit.

Pros and Cons

Pros:

• Zero down payment

• No monthly mortgage insurance

• Competitive rates

• Lower closing costs

• Flexible underwriting

Cons:

• Only for eligible military borrowers

• VA appraisal is more stringent

• VA funding fee (unless exempt)

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Helpful Resources

For more information and official VA loan guidance, visit:

• VA Home Loans Overview – U.S. Department of Veterans Affairs

• VA Loan Eligibility Requirements

• VA Funding Fee and Closing Costs

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Should You Apply for a VA Loan?

If you’re eligible for VA financing, it’s often the best deal available in the mortgage market. With no PMI and no down payment, VA loans offer a low-cost path to homeownership.

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Confident you're ready to move forward? Start your VA loan application now and put your earned benefits to work.