Because VA guarantees part of the loan, private lenders can offer eligible borrowers a mortgage with no down payment and no monthly mortgage insurance. Most borrowers pay a
Who qualifies for a VA loan?
Eligibility comes from military service: veterans, active-duty service members, National Guard and Reserve members who meet the service requirements, and some surviving spouses. You show it with a Certificate of Eligibility, which your lender can usually
You have to plan to live in the home as your primary residence, and you still need to meet the lender’s standards for credit, income and debt. VA’s underwriting rules set 41% as the standard debt-to-income ratio and weigh it alongside residual income, the money left each month after major expenses. Missing one standard doesn’t
Do you need a down payment?
Usually not. VA says you can buy with no down payment as long as the price isn’t higher than the appraised value. If you have full entitlement, VA sets no loan limit: you can borrow what a lender will approve and the appraisal supports.
If part of your entitlement is still tied up in another VA loan, a limit based on your county applies, and you may need a down payment to
What does the VA funding fee cost?
Instead of monthly mortgage insurance, most borrowers pay a one-time VA funding fee. On a purchase, a first-time user pays 2.15% of the loan with less than 5% down, 1.5% with 5% to under 10% down, and 1.25% with 10% or more. After the first use, the under-5% rate rises to 3.3%; the others
You can pay the fee at closing or add it to the loan. Veterans who receive VA compensation for a service-connected disability don’t pay it, and neither do some surviving spouses or active-duty
What else is different about VA loans?
VA says borrowers face fewer closing costs, and the seller may pay some of them. A VA loan has no private mortgage insurance. The home gets a VA appraisal, which also checks that it meets VA’s
VA loans can be taken over by a qualified buyer as an assumable mortgage, which can matter when rates have risen. Rates and lender fees still vary, so collect more than one Loan Estimate.
The funding fee on a $400,000 home with no down payment
| Purchase price | $400,000 |
|---|---|
| Down payment | $0 |
| Base loan amount | $400,000 |
| Funding fee, first use (2.15%) | $8,600 |
| Loan with the fee added | $408,600 |
| Funding fee, later use (3.3%) | $13,200 |
| Funding fee with VA disability compensation | $0 |
With 10% down ($40,000), the first-use fee would be 1.25% of a $360,000
Common mistakes
- Assuming there’s a VA loan limit when you
have full entitlement. - Thinking the benefit can be
used only once. - Not checking whether you’re exempt from the funding
fee before closing. - Assuming every lender has the same credit requirements
for VA loans.
Questions
Can you use a VA loan more than once?
Yes. Eligibility can be restored after you pay off a VA loan, and you may have entitlement left even while one is open. The funding fee is usually higher after
Do VA loans have PMI?
No. VA loans have no private mortgage insurance or monthly mortgage insurance premium. Most borrowers pay the one-time
Is there a minimum credit score for a VA loan?
Lenders set their own credit standards for VA loans, so the minimum depends on the lender. Ask several,
Sources
- VA: Funding fee and closing costs
- VA: Purchase loan
- VA: Loan limits
- 38 CFR 36.4340: VA underwriting standards
- CFPB: What is a VA loan?
Written and checked by the Broker & Agent team on October 2, 2026. General information, not legal, tax or lending advice. Something out of date? Tell us.