Loan Programs

VA Loan Complete Guide

The definitive guide to VA home loans for veterans, active-duty service members, and eligible surviving spouses.

NMHL Team2026-01-1213 min read

VA Loan Overview

VA loans are mortgage loans guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans, active-duty service members, National Guard members, reservists, and certain surviving spouses. The VA loan program was created in 1944 as part of the GI Bill to help returning service members purchase homes. Today, VA loans remain one of the most powerful homebuying tools available, offering zero down payment, no private mortgage insurance, competitive interest rates, and flexible qualification standards. VA loans can be used to purchase a home, refinance an existing mortgage, or build a new home.

VA loans consistently offer the lowest average interest rates of any major mortgage type, often 0.25-0.5% lower than comparable conventional loans.

Eligibility and Certificate of Eligibility

To qualify for a VA loan, you must meet minimum service requirements. Active-duty members need 90 consecutive days of service during wartime or 181 days during peacetime. National Guard and reserve members need 6 years of service or 90 days of active-duty service during wartime. Surviving spouses of service members who died in the line of duty or from a service-connected disability may also be eligible. You will need a Certificate of Eligibility (COE) which your lender can obtain for you through the VA's automated system. Your COE confirms your eligibility and shows your remaining entitlement for loan guaranty purposes.

Key Tips

  • Your lender can usually obtain your COE in seconds through the VA's Web LGY system
  • If you have used a VA loan before, you may be able to restore your entitlement for a new purchase
  • Discharged veterans should have their DD-214 form ready when applying

VA Loan Benefits

VA loans offer exceptional benefits that set them apart from other mortgage programs. The zero down payment requirement means you can purchase a home with no money down, preserving your savings for other needs. There is no private mortgage insurance, which saves $100-$300 or more per month compared to conventional loans with less than 20% down. VA loans have no prepayment penalties, so you can pay off your loan early without fees. Interest rates are typically lower than conventional and FHA loans. VA loans also offer more lenient credit requirements and higher allowable debt-to-income ratios, making them accessible to more borrowers.

The savings from no PMI alone can total $30,000-$80,000 over the life of a 30-year mortgage compared to a conventional loan with less than 20% down.

VA Funding Fee Explained

The VA funding fee is a one-time payment that helps offset the cost of the VA loan program to taxpayers. For first-time VA loan users with no down payment, the funding fee is 2.15% of the loan amount. This fee decreases to 1.25% with a 5% down payment and 1% with 10% or more down. Subsequent use of VA loans carries a higher funding fee of 3.3% with no down payment. The funding fee can be financed into the loan amount so you do not need to pay it upfront. Veterans receiving VA disability compensation are exempt from the funding fee, which can save thousands of dollars.

Key Tips

  • If you have a service-connected disability rating, you are exempt from the funding fee entirely
  • Surviving spouses receiving dependency and indemnity compensation are also exempt
  • Making even a 5% down payment significantly reduces the funding fee

How to Apply for a VA Loan

The VA loan application process begins with finding a VA-approved lender like NMHL. Gather your documentation including your DD-214, recent pay stubs, W-2s, tax returns, and bank statements. Your lender will obtain your Certificate of Eligibility and pull your credit report. After pre-approval, you can begin your home search. Once you have an accepted offer, the lender will order a VA appraisal which ensures the property meets VA minimum property requirements. The VA appraiser evaluates both the value and the condition of the home. After underwriting approval, you will proceed to closing where you sign your documents and receive your keys.

Key Tips

  • Start the pre-approval process while you are still on active duty if you are transitioning out of service
  • The VA appraisal protects you by ensuring you do not overpay for a property
  • VA loans can be used to purchase a home, condo, manufactured home, or to build a new home
Couple holding their new home key

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Frequently Asked Questions

No, VA loans offer 100% financing with zero down payment required. This is one of the most significant benefits of the VA loan program. However, making a down payment can reduce your VA funding fee and lower your monthly payment.

The VA does not set a minimum credit score requirement, but most lenders require a score of at least 580-620. Some lenders may accept lower scores with compensating factors. NMHL works with VA-approved lenders across a range of credit profiles.

Yes, VA loan benefits can be reused. If you have paid off a previous VA loan or sold the property, your entitlement can be restored. You can even have two VA loans at the same time if you have sufficient remaining entitlement.

No, VA loans can be used for first-time purchases, subsequent home purchases, refinancing, and even construction loans. There is no limit on how many times you can use your VA loan benefit as long as you have available entitlement.

Related Resources

First-Time Homebuyer Guide

Complete guide for all first-time buyers.

Home Appraisal Guide

What to expect during the appraisal process.

Closing Costs Explained

Understand all the costs involved in closing on your home.

VA Loans

VA loans are a benefit earned by veterans, active-duty service members, and eligible surviving spouses. Backed by the Department of Veterans Affairs, these loans offer unmatched benefits including no down payment, no mortgage insurance, and competitive rates.

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