For those who have served our country, the VA home loan is one of the most powerful benefits available after service. Backed by the U.S. Department of Veterans Affairs, VA loans make homeownership more accessible by offering no down payment, no monthly mortgage insurance, and competitive interest rates.

This guide walks you through VA loans from start to finish: what they are, who qualifies, how they compare to conventional loans, and exactly how to apply. Whether you are buying your first home, relocating, or upgrading to your next one, a VA loan can be a game-changing tool in building long-term financial security.

What Is a VA Loan?

A VA loan is a mortgage issued by a private lender, such as a mortgage company, bank, or credit union, and partially guaranteed by the Department of Veterans Affairs. The VA does not lend the money directly. Instead, it provides a guaranty to the lender, which reduces risk and allows more favorable terms for eligible borrowers.

Key features of VA loans include:

• No required down payment in most cases

• No ongoing mortgage insurance

• Flexible credit and debt guidelines

VA loans are intended for primary residences only. Eligible properties include single-family homes, VA-approved condominiums, townhomes, and multi-family properties up to four units, as long as the veteran occupies one of the units. VA loans cannot be used for vacation homes or investment-only properties.

Because the VA backs a portion of the loan, lenders can extend benefits that are typically unavailable through conventional financing. This program exists to honor military service by removing common financial barriers to homeownership.

Who Is Eligible for a VA Loan?

VA loan eligibility is based on military service history. You may qualify under one or more of the following categories:

Veterans
Most veterans qualify after meeting minimum service requirements, which often include at least 24 months of continuous active duty or completion of the period for which they were called to service. Veterans discharged due to service-connected disabilities may qualify with less time. Discharge must be under conditions other than dishonorable.

Active-Duty Service Members
Current service members are typically eligible after 90 days of continuous service during wartime or about 181 days during peacetime.

National Guard and Reserve Members
Eligibility generally requires six years of honorable service, unless the member was activated under federal orders, in which case active-duty rules may apply.

Surviving Spouses
Unremarried surviving spouses of service members who died in service or from a service-connected disability may be eligible. Certain spouses of POW or MIA service members may also qualify.

To confirm eligibility, borrowers obtain a Certificate of Eligibility (COE). This document verifies entitlement and is required by the lender. In most cases, lenders can retrieve the COE electronically, or borrowers may apply through the VA directly using proof of service such as a DD-214 or Statement of Service.

Eligibility confirms access to the VA benefit, but final loan approval still depends on income, credit, and overall financial stability. VA loans are not a one-time benefit and can be used multiple times throughout your life, depending on entitlement.

VA Loan Types and Basic Requirements

VA loans are flexible and designed to meet a variety of housing needs. Common VA loan options include:

• Purchase loans for buying a primary residence

• Interest Rate Reduction Refinance Loans (IRRRLs) to lower your rate

• Cash-out refinances to access home equity

While the VA sets service eligibility rules, lenders establish credit and income requirements. Many VA lenders approve borrowers with credit scores down to the 500's, and the standard debt-to-income guideline is around 41 percent, though higher ratios are often approved with strong compensating factors.

VA loans can be used for:

• Single-family homes

• Townhomes

• VA-approved condominiums

• Multi-family homes up to four units, owner-occupied

Benefits of VA Loans

VA loans are widely regarded as one of the most borrower-friendly mortgage programs available.

No Down Payment
Eligible borrowers can finance 100 percent of the home’s value, allowing you to buy without years of saving for a down payment.

No Monthly Mortgage Insurance
Unlike FHA or conventional loans with low down payments, VA loans do not require monthly mortgage insurance. This can result in significant monthly savings.

Competitive Interest Rates
VA loans often carry lower interest rates than comparable conventional loans due to the government guaranty.

Flexible Credit Guidelines
The VA does not set a minimum credit score, giving lenders flexibility to approve borrowers with less-than-perfect credit histories.

Higher Allowable Debt Ratios
VA underwriting considers both debt-to-income ratio and residual income, allowing approvals at higher DTIs when overall financial strength is demonstrated.

No Prepayment Penalties
Borrowers can pay off their loan early or make extra principal payments without penalty.

Support During Financial Hardship
The VA offers borrower assistance programs and works with lenders to help veterans avoid foreclosure when challenges arise.

VA Funding Fee and Loan Terms

VA loans include a one-time funding fee, which helps sustain the program. The fee typically ranges from 1.25 percent to 3.3 percent of the loan amount and depends on factors such as prior VA loan usage and down payment amount. The fee may be financed into the loan.

Veterans receiving compensation for service-connected disabilities are often exempt from the funding fee, which can save thousands at closing.

VA loans are available in 15-year, 30-year, and adjustable-rate options, with fixed-rate loans being the most common.

VA Loans vs. Conventional Loans

When comparing VA and conventional loans, VA financing often provides a clear advantage for eligible borrowers.

Down Payment
VA loans generally require no down payment, while conventional loans typically require 3 to 20 percent.

Mortgage Insurance
Conventional loans require PMI when putting less than 20 percent down. VA loans never require PMI.

Interest Rates
VA loans often offer lower rates due to reduced lender risk.

Credit and DTI Flexibility
Conventional loans usually demand higher credit scores and stricter DTIs. VA loans are more forgiving.

Fees and Protections
The VA limits certain fees and allows sellers to contribute toward closing costs, protections not always available with conventional loans.

In most cases, if you are eligible for a VA loan, it provides superior value compared to conventional financing.

VA Loan Limits and the VA Guaranty

VA loan limits are set by the FHFA and vary by county. In most areas, borrowers with full entitlement can finance up to the local loan limit without a down payment. Higher loan amounts may still be possible with a down payment.

The VA guaranty typically covers up to 25 percent of the loan amount, giving lenders the confidence to offer favorable terms.

Additional Benefits for Disabled Veterans

Veterans with service-connected disabilities may qualify for:

• Funding fee exemptions

• More favorable loan terms

• Specialized housing grants such as SAH, SHA, and TRA

These programs help veterans purchase, build, or modify homes to meet accessibility needs.

How to Apply for a VA Loan: Step by Step

1. Confirm eligibility based on service history

2. Obtain your Certificate of Eligibility

3. Get pre-approved with an experienced VA lender

4. Shop for a VA-eligible primary residence

5. Make an offer and negotiate seller concessions if applicable

6. Complete the VA appraisal and underwriting process

7. Review final loan terms and close

8. Move in and enjoy your new home

Final Thoughts

VA loans offer one of the strongest home financing options available, combining zero down payment, no monthly insurance, flexible guidelines, and competitive rates. This benefit reflects the nation’s commitment to those who served and provides a powerful path to homeownership and wealth-building.

At The Nelson Group, we are proud to serve veterans and active-duty service members. Our team is experienced with VA loans and committed to guiding you through the process with clarity and confidence.

Ready to take the next step?
Contact us today or get pre-approved with our VA loan experts. We will help you maximize your benefits and move into your new home with confidence. Your service earned this opportunity, and we would be honored to help you use it.

For those who have served our country, the VA home loan is one of the most powerful benefits available after service. Backed by the U.S. Department of Veterans Affairs, VA loans make homeownership more accessible by offering no down payment, no monthly mortgage insurance, and competitive interest rates.

This guide walks you through VA loans from start to finish: what they are, who qualifies, how they compare to conventional loans, and exactly how to apply. Whether you are buying your first home, relocating, or upgrading to your next one, a VA loan can be a game-changing tool in building long-term financial security.

What Is a VA Loan?

A VA loan is a mortgage issued by a private lender, such as a mortgage company, bank, or credit union, and partially guaranteed by the Department of Veterans Affairs. The VA does not lend the money directly. Instead, it provides a guaranty to the lender, which reduces risk and allows more favorable terms for eligible borrowers.

Key features of VA loans include:

• No required down payment in most cases

• No ongoing mortgage insurance

• Flexible credit and debt guidelines

VA loans are intended for primary residences only. Eligible properties include single-family homes, VA-approved condominiums, townhomes, and multi-family properties up to four units, as long as the veteran occupies one of the units. VA loans cannot be used for vacation homes or investment-only properties.

Because the VA backs a portion of the loan, lenders can extend benefits that are typically unavailable through conventional financing. This program exists to honor military service by removing common financial barriers to homeownership.

Who Is Eligible for a VA Loan?

VA loan eligibility is based on military service history. You may qualify under one or more of the following categories:

Veterans
Most veterans qualify after meeting minimum service requirements, which often include at least 24 months of continuous active duty or completion of the period for which they were called to service. Veterans discharged due to service-connected disabilities may qualify with less time. Discharge must be under conditions other than dishonorable.

Active-Duty Service Members
Current service members are typically eligible after 90 days of continuous service during wartime or about 181 days during peacetime.

National Guard and Reserve Members
Eligibility generally requires six years of honorable service, unless the member was activated under federal orders, in which case active-duty rules may apply.

Surviving Spouses
Un -remarried surviving spouses of service members who died in service or from a service-connected disability may be eligible. Certain spouses of POW or MIA service members may also qualify.

To confirm eligibility, borrowers obtain a Certificate of Eligibility (COE). This document verifies entitlement and is required by the lender. In most cases, lenders can retrieve the COE electronically, or borrowers may apply through the VA directly using proof of service such as a DD-214 or Statement of Service.

Eligibility confirms access to the VA benefit, but final loan approval still depends on income, credit, and overall financial stability. VA loans are not a one-time benefit and can be used multiple times throughout your life, depending on entitlement.

VA Loan Types and Basic Requirements

VA loans are flexible and designed to meet a variety of housing needs. Common VA loan options include:

• Purchase loans for buying a primary residence

• Interest Rate Reduction Refinance Loans (IRRRLs) to lower your rate

• Cash-out refinances to access home equity

While the VA sets service eligibility rules, lenders establish credit and income requirements. Many VA lenders approve borrowers with credit scores in the low-to-mid 600s, and the standard debt-to-income guideline is around 41 percent, though higher ratios are often approved with strong compensating factors.

VA loans can be used for:

• Single-family homes

• Townhomes

• VA-approved condominiums

• Multi-family homes up to four units, owner-occupied

Benefits of VA Loans

VA loans are widely regarded as one of the most borrower-friendly mortgage programs available.

No Down Payment
Eligible borrowers can finance 100 percent of the home’s value, allowing you to buy without years of saving for a down payment.

No Monthly Mortgage Insurance
Unlike FHA or conventional loans with low down payments, VA loans do not require monthly mortgage insurance. This can result in significant monthly savings.

Competitive Interest Rates
VA loans often carry lower interest rates than comparable conventional loans due to the government guaranty.

Flexible Credit Guidelines
The VA does not set a minimum credit score, giving lenders flexibility to approve borrowers with less-than-perfect credit histories.

Higher Allowable Debt Ratios
VA underwriting considers both debt-to-income ratio and residual income, allowing approvals at higher DTIs when overall financial strength is demonstrated.

No Prepayment Penalties
Borrowers can pay off their loan early or make extra principal payments without penalty.

Support During Financial Hardship
The VA offers borrower assistance programs and works with lenders to help veterans avoid foreclosure when challenges arise.

VA Funding Fee and Loan Terms

VA loans include a one-time funding fee, which helps sustain the program. The fee typically ranges from 1.25 percent to 3.3 percent of the loan amount and depends on factors such as prior VA loan usage and down payment amount. The fee may be financed into the loan.

Veterans receiving compensation for service-connected disabilities are often exempt from the funding fee, which can save thousands at closing.

VA loans are available in 15-year, 30-year, and adjustable-rate options, with fixed-rate loans being the most common.

VA Loans vs. Conventional Loans

When comparing VA and conventional loans, VA financing often provides a clear advantage for eligible borrowers.

Down Payment
VA loans generally require no down payment, while conventional loans typically require 3 to 20 percent.

Mortgage Insurance
Conventional loans require PMI when putting less than 20 percent down. VA loans never require PMI.

Interest Rates
VA loans often offer lower rates due to reduced lender risk.

Credit and DTI Flexibility
Conventional loans usually demand higher credit scores and stricter DTIs. VA loans are more forgiving.

Fees and Protections
The VA limits certain fees and allows sellers to contribute toward closing costs, protections not always available with conventional loans.

In most cases, if you are eligible for a VA loan, it provides superior value compared to conventional financing.

VA Loan Limits and the VA Guaranty

VA loan limits are set by the FHFA and vary by county. In most areas, borrowers with full entitlement can finance up to the local loan limit without a down payment. Higher loan amounts may still be possible with a down payment.

The VA guaranty typically covers up to 25 percent of the loan amount, giving lenders the confidence to offer favorable terms.

Additional Benefits for Disabled Veterans

Veterans with service-connected disabilities may qualify for:

• Funding fee exemptions

• More favorable loan terms

• Specialized housing grants such as SAH, SHA, and TRA

These programs help veterans purchase, build, or modify homes to meet accessibility needs.

How to Apply for a VA Loan: Step by Step

1. Confirm eligibility based on service history

2. Obtain your Certificate of Eligibility

3. Get pre-approved with an experienced VA lender

4. Shop for a VA-eligible primary residence

5. Make an offer and negotiate seller concessions if applicable

6. Complete the VA appraisal and underwriting process

7. Review final loan terms and close

8. Move in and enjoy your new home

Final Thoughts

VA loans offer one of the strongest home financing options available, combining zero down payment, no monthly insurance, flexible guidelines, and competitive rates. This benefit reflects the nation’s commitment to those who served and provides a powerful path to homeownership and wealth-building.

At The Nelson Group, we are proud to serve veterans and active-duty service members. Our team is experienced with VA loans and committed to guiding you through the process with clarity and confidence.

Ready to take the next step?
Contact us today or get pre-approved with our VA loan experts. We will help you maximize your benefits and move into your new home with confidence. Your service earned this opportunity, and we would be honored to help you use it.