VA Home Loans

VA home loans provide veterans with a federally guaranteed home loan which requires no down payment. This program was designed to provide housing and assistance to veterans and their families from VA lenders.

VA Loans

What is a VA Loan?

A VA loan is a type of mortgage loan provided by lenders and guaranteed by the U.S. Department of Veterans Affairs (VA). It was established in 1944 through the original Servicemen’s Readjustment Act, also known as the GI Bill. The main purpose of the VA loan is to provide Veterans with a federally-guaranteed home loan with no down payment.

Types of VA Loans

There are several different types of VA loans including:

VA Purchase Loan. Veterans and service members can use a VA loan to purchase a primary residence with 0 down payment and no mortgage insurance. In addition, sellers can pay up to 4% of the closing costs helping to further reduce the amount veterans need to bring to closing.

VA Interest Rate Reduction Refinance Loan (IRRRL). Also known as a VA Streamline Refinance, the IRRRL is a refinance option designed to lower the interest rate on an existing VA home loan. The primary purpose of the IRRRL is to reduce monthly mortgage payments through a lower interest rate. Typically, IRRRLs do not require an appraisal and the costs of the refinance can be included in the new loan.

VA Cash Out Refinance. This loan type allows veterans to refinance their non-VA loan into a VA loan and take cash out form the equity built in their home. Borrowers can use the cash taken out from home equity to pay off high-interest debts like credit cards and personal loans, potentially lowering their overall monthly payments. Funds can also be used for home improvements that may increase the value of the home or enhance the livability of the property. In addition to debt payments and home renovations, the cash can also be used for expenses such as educational costs or medical bills. Unlike other refinancing options, some lenders may allow veterans to borrow up to 100% of their home's value, though this can vary based on lender criteria and individual circumstances.

These three types of VA loans provide flexible, cost-effective options tailored to the needs of America's veterans, allowing them to purchase, refinance, and utilize their home's equity to improve their financial situation. Whether buying a first home, reducing monthly payments on a current home, or accessing needed cash, VA loans offer significant advantages to those who have served.

VA Loan Requirements

Eligibility for a VA loan is based on service duration and nature, as well as other financial factors.

Service Requirements. Eligibility is determined by the length and circumstances of service, such as 90 consecutive days of active duty during wartime or 181 during peacetime. Members of the National Guard or Reserves need at least six years of service. For more information, see the VA's Eligibility Guidelines. To confirm eligibility, a veteran will need to obtain a Certificate of Eligibility (COE) from the VA. This certificate is essential and verifies the applicant meets military service requirements to qualify for a VA-backed loan. You can request a COE from the VA's web site.

Credit and Income Criteria. Applicants must have satisfactory credit and enough income to cover their mortgage payments and other obligations.

Primary Residence. The property must be occupied as the borrower’s primary place of residence within 60 days of purchase. You can't finance a vacation or investment property with a VA loan.

Property Types. A VA loan can be used to finance single family homes, multi-family homes up to 4 units and condos.

VA Loan Limits

While the VA does not set a maximum loan amount, it does limit the amount it will guarantee. This limit is known as the VA loan limit, which varies by county and is based on the conforming loan limits set by the Federal Housing Finance Agency (FHFA).

In 2024, the standard VA loan limit is $766,500 for most counties, but it can be higher in high-cost areas. If you need to borrow more than the VA loan limit, you may need to make a down payment to cover the difference.

Benefits of a VA Loan

VA home loans provide several unparalleled benefits:

No Down Payment Required. One of the most significant advantages is that VA loans do not typically require a down payment.

No Private Mortgage Insurance (PMI). Unlike conventional loan borrowers, VA loan recipients do not need to pay PMI, which can lead to substantial monthly savings.

Competitive Interest Rates. VA loans typically feature lower interest rates compared to traditional mortgage options, reducing monthly payments and overall loan cost.

No Prepayment Penalties. VA loans allow for early loan repayment without financial penalties, offering flexibility for borrowers.

How to Get Pre-approved for a VA Loan

Getting pre-approved for a VA home loan is quick and easy with our online Loan Application. After completing the application, you will receive instructions on how to upload your documents. For a list of the documents you will need to upload, see our Pre-approval Document Checklist.

The VA Loan Process

The VA loan process involves several steps, from determining eligibility to closing on the loan. Here is an overview of the process:

  • Determine Eligibility: Obtain a Certificate of Eligibility (COE) from the VA. This document verifies that you meet the service requirements for a VA loan. You can apply for a COE through the VA's Benefits portal, by mail, or through your lender.
  • Pre-Approval: Once you have your COE, you can seek pre-approval from a VA-approved lender. Pre-approval involves a preliminary review of your credit and financial information to determine how much you can borrow.
  • Find a Home: Work with a real estate agent to find a home that meets your needs and VA property requirements. Make an offer on the home and negotiate the terms of the sale.
  • VA Appraisal: After your offer is accepted, your lender will order a VA appraisal to ensure the home meets the VA's property requirements and is worth the purchase price. The appraisal also includes a basic inspection of the property's condition.
  • Underwriting: The lender's underwriting team will review your loan application, credit history, income, and the VA appraisal to determine if you meet their lending criteria. This step may involve providing additional documentation.
  • Closing: If your loan is approved, you will proceed to closing, where you will sign the final loan documents, pay any remaining closing costs, and receive the keys to your new home.

VA Funding Fee

One of the costs associated with VA loans is the funding fee, a one-time fee that helps offset the cost of the VA loan program to taxpayers. The funding fee can be paid upfront or rolled into the loan amount. The amount of the funding fee depends on the type of loan, the borrower's military category, whether it is the borrower's first VA loan, and the amount of the down payment.

For example, as of 2024, the funding fee for a first-time VA loan borrower with no down payment is 2.15% of the loan amount, while subsequent use borrowers pay 3.3%. Borrowers making a down payment of 5% to 9.9% pay a reduced fee of 1.50%, and those making a down payment of 10% or more pay 1.25%.

Certain borrowers, such as those receiving VA disability compensation, surviving spouses of veterans who died in service or from a service-connected disability, and Purple Heart recipients on active duty, are exempt from the funding fee.

For more information about the VA Funding Fee, see our VA Funding Fee Rates.

VA loans offer an incredible opportunity for veterans and service members to achieve the American dream of homeownership. With no down payment requirements, competitive interest rates, and more lenient credit standards, VA loans make it easier for eligible borrowers to purchase a home. By understanding the benefits, requirements, and process of VA loans, you can take advantage of this valuable program and secure a brighter financial future for you and your family.

Alpine Mortgage provides VA loans in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Texas. Call us today at (800) 876-5626 to speak with one of our VA home loan specialists or click here to have one of our VA loan specialists contact you. 

VA Loans FAQs

You can view our current 30 Year Fixed VA Loan Rates

While the US Department of Veteral Affairs doesn't set a sepcific credit score requirement, most lenders require at least a 620 credit score to qualify for a VA loan.

Yes, you can reuse your VA loan benefits multiple times, provided the previous loan is paid off.

While there are no down payment and no PMI requirements, there is a VA funding fee, which varies based on the loan type, the borrower's military service, whether it is a first-time use, and down payment amount, if any. Some may be exempt from this fee, such as veterans with service-related disabilities.

VA Loan Resources