What Is a VA Home Loan?
VA home loans are mortgage loans uniquely offered to members of the military community, including active duty, National Guard, Reserves and Veterans.
Benefits of VA home loans may include:
- No down payment
- No minimum credit requirements set by VA (however, some lenders may require a minimum FICO score)
- No monthly mortgage insurance*
- Lower cash reserves
- Easier refinancing with an Interest Rate Reduction Refinance Loan (IRRRL)–as no appraisal and no income verification are required
VA home loans can be used to purchase a home as well as to finance new construction. VA Home Loans for new construction allow qualified borrowers to use their VA entitlement toward both the mortgage phase of the loan as well as the initial construction phase financing of the new build.
Read more about construction loans here.
*While borrowers are exempt from having to pay monthly mortgage insurance (usually required on most mortgages when you have less than 20% down on the home), VA Home Loans do require a funding fee. However, disabled Veterans may qualify to get a reduced or no funding fee with a VA mortgage.
VA Home Loan Requirements
To qualify for a VA Home Loan, you must meet one of the following eligibility requirements:
- You have served 90 consecutive days of active service during wartime
- You have served 181 days of active service during peacetime
- You have 6 years of service in the National Guard or Reserves
- You are the surviving spouse of a servicemember who has died in the line of duty or as a result of a service-related disability
It is helpful to have a VA Loan Certificate of Eligibility (COE) on hand when applying for a VA Home Loan. Your COE provides mortgage lenders with confirmation that you qualify for VA benefits.
To obtain your VA Loan COE, you can:
- Apply through a VA approved lender
- Apply online through the VA’s eBenefits portal
- Apply by mail with VA Form 26-1880
VA Home Loan Rates
VA Home Loans are backed by the US federal government, which means that mortgage lenders can charge competitively low interest rates—typically much lower than that of conventional mortgages.
With AAFMAA Mortgage Services LLC (AMS), our licensed Military Mortgage Advisors will help you determine the rate on your VA Home Loan based on your individual financial situation.
Rates may vary depending on the following factors:
- Credit score
- Loan Type
- IRRRL (also known as a streamline refinance)
- Cash-Out Refinance
- Loan Term
- Market conditions
Read more: VA Loan Update: Larger Loans (Still with No Down Payment)