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VA Loan
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs, available to eligible veterans and active-duty service members. VA loans require zero down payment and have no monthly mortgage insurance.
How It Works
VA loans are widely considered the best mortgage product available — for those who qualify. Backed by the Department of Veterans Affairs, these loans offer zero down payment, no monthly mortgage insurance, competitive interest rates (typically 0.25-0.5% below conventional), and no loan limits for borrowers with full entitlement. Instead of monthly MI, VA loans charge a one-time funding fee (1.25-3.3% of the loan amount) that can be rolled into the loan. The funding fee is waived entirely for veterans with service-connected disabilities. VA loans are available to veterans, active-duty service members, National Guard and Reserve members (with qualifying service), and surviving spouses of veterans who died in service or from a service-connected disability. VA loans can only be used for primary residences.
Key Facts
Zero down payment required
No monthly mortgage insurance
Interest rates typically 0.25-0.5% below conventional
No loan limits with full entitlement
VA funding fee: 1.25-3.3% (waived for disabled veterans)
Loan is assumable — a major benefit in high-rate environments
Can be used multiple times (entitlement is reusable)
Example
Home price: $400,000. VA loan: $0 down. Funding fee (first use, 0% down): 2.15% = $8,600 (rolled into loan). Loan balance: $408,600. No PMI. At 6.25% rate, monthly payment: $2,517 (vs. conventional with PMI: ~$2,750).
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Frequently Asked Questions
Veterans with 90+ days of wartime service or 181+ days of peacetime service, active-duty members with 90+ days of service, National Guard/Reserve with 6+ years of service (or 90 days of active duty), and surviving spouses of veterans who died in service or from service-connected causes.
Yes. VA entitlement is reusable. You can use it again after selling a previous VA-financed home and restoring your entitlement. Some veterans can even have two VA loans simultaneously with remaining entitlement.