What is a VA Home Loan? A Guide to Benefits, Eligibility, and How to Apply
Discover how the VA Home Loan Guaranty program helps eligible Veterans, Service members, and surviving spouses obtain, retain, and adapt homes with favorable loan terms and no down payment required.
The VA Home Loan Guaranty program is one of the most valuable benefits available to Veterans, active-duty Service members, certain surviving spouses, and members of the Reserves and National Guard. This program assists eligible individuals to obtain, retain, and adapt homes in recognition of their service to the nation, often with no down payment required and no private mortgage insurance (PMI).
A VA loan guaranty helps protect lenders from loss if the borrower fails to repay the loan. This guaranty enables lenders to offer more favorable terms to Veterans and Service members.
VA Loan Guaranty Uses
A VA loan guaranty can be used to:
- Buy an existing dwelling or build a home
- Buy a residential condominium unit
- Repair, alter, or improve a residence owned and occupied by the Veteran
- Refinance an existing home loan
- Buy a manufactured home and/or lot
- Install a solar heating or cooling system or other energy efficient improvements
Eligibility applications can be submitted electronically through your lender using the Automated Certificate of Eligibility system, or Veterans can apply directly through www.va.gov.
✅ Preferred Method: Electronic Application
Most requests submitted electronically are approved instantaneously. Visit www.va.gov to apply online.
Manual Application (If Needed)
If you cannot establish eligibility automatically, you can apply manually using:
- VA Form 26-1880 - Request for Certificate of Eligibility
- VA Form 26-1817 - Request for Determination of Loan Guaranty Eligibility (Unmarried Surviving Spouses)
Required Documentation for Manual Applications
- Veterans: Copy of DD Form 214 (Certificate of Release or Discharge from Active Duty)
- Active-Duty Service Members: Statement of service signed by appropriate military official
For More Information:
Visit www.benefits.va.gov/homeloans or call 877-827-3702 or 1-800-MyVA411 (800-698-2411), option 5
In addition to eligibility and service requirements, applicants must meet the following criteria to be approved by a lender:
- Have sufficient income to cover monthly mortgage payments and other expenses
- Have acceptable credit history
- Agree to live in the property as their primary residence
Some spouses of Veterans may have home loan eligibility, including:
Eligible Surviving Spouses
- The unmarried surviving spouse of a Veteran who died as a result of service or service-connected causes
- The surviving spouse of a Veteran who died on active duty or from service-connected causes, who remarries on or after attaining age 57 and on or after December 16, 2003
- The spouse of an active-duty Service member who is listed as missing in action (MIA) or POW for at least 90 days
⚠ Important: Eligibility under the MIA/POW provision is limited to a one-time use only.
Non-Service-Connected Death Eligibility
Surviving spouses of Veterans who died from non-service-connected causes may also be eligible if any of the following conditions are met:
- The Veteran was rated totally service-connected disabled for 10 years or more immediately preceding death
- The Veteran was rated totally disabled for not less than five years from date of discharge or release from active duty to date of death
- The Veteran was a former POW who died after September 30, 1999, and was rated totally service-connected disabled for not less than one year immediately preceding death
For More Information:
Visit www.benefits.va.gov/homeloans or call 877-827-3702 or 1-800-MyVA411 (800-698-2411), option 5
Important: VA Does Not Make Loans
VA does not make guaranteed loans to Veterans and Service members; VA guarantees loans made by private-sector lenders. The guaranty amount is what VA could pay a lender should the loan go to foreclosure or terminate due to a deed in lieu of foreclosure or short sale.
Loan Amount Limits
- Purchase Loans: VA limits loan amounts to the lesser of the purchase price or reasonable value as determined by a VA home loan guaranty appraisal plus the VA funding fee
- Cash-Out Refinanced Loans: VA limits the loan amount to the reasonable value as determined by a VA home loan guaranty appraisal
- No Cap on Borrowing: VA does not set a cap on how much an individual can borrow to obtain or refinance a home
A lender will evaluate a borrower's credit and income to determine how much they qualify for. In some cases, there are limits on the amount of VA guaranty available due to a current or prior VA-guaranteed home loan, which could affect the amount of money an institution will lend.
For Information on Loan Limits:
Visit www.va.gov/housing-assistance/home-loans/loan-limits
Interest Rate Reduction Refinancing Loan (IRRRL)
An eligible borrower can use a VA-guaranteed Interest Rate Reduction Refinancing Loan to refinance an existing VA loan and lower the interest rate and payment.
Home Loan Guaranty Appraisals
In most cases, a home loan cannot be guaranteed by VA without first being appraised by a VA-assigned fee appraiser. A home appraisal is required for purchase and certain refinance loans guaranteed by VA.
- A lender can request a VA appraisal through VA systems
- The Veteran borrower typically pays for the appraisal upon completion
- The VA appraisal estimates the value of the property
⚠ Important: Appraisal vs. Inspection
An appraisal is not an inspection and does not guarantee the house is free of defects. VA guarantees the loan, not the condition of the property.
A thorough inspection of the property by a reputable inspection firm may help minimize any problems that could arise after loan closing. In an existing home, attention should be given to plumbing, heating, electrical, roofing, and structural components. In addition, VA strongly recommends testing for radon, a known carcinogen.
Home Loan Guaranty Closing Costs
- Purchase Home Loans: Payment in cash is required on all closing costs, including title search, recording fees, hazard insurance premiums, and prepaid taxes
- Refinancing Loans: All such costs may be included in the loan, if the total loan does not exceed the reasonable value of the property
- Interest Rate Reduction Loans: May include closing costs, including a maximum of two discount points
Home Loan Guaranty Funding Fees
The funding fee is a percentage of the loan amount collected to offset future anticipated costs associated with the loan. A funding fee must be paid to VA unless the Veteran is exempt from such a fee.
Funding Fee Exemptions
Currently, exemptions from the funding fee are provided for:
- Veterans and Service members receiving VA service-connected disability compensation
- Those rated by VA as eligible to receive compensation as a result of pre-discharge disability examination and rating
- Those who would be in receipt of compensation, but were recalled to active duty or reenlisted and are receiving active duty pay in lieu of compensation
- Active-duty Service members who have earned a Purple Heart still serving on active duty
- Unmarried surviving spouses in receipt of Dependency and Indemnity Compensation
The fee may be paid in cash or included in the loan. For all types of loans, the loan amount may include the VA funding fee and energy efficient improvements up to $3,000 based solely on the documented costs, or up to $6,000, provided the increase in monthly mortgage payments does not exceed the likely reduction in monthly utility costs.
Required Occupancy
To qualify for a VA home loan, a Veteran, or the spouse of an active-duty Service member must certify that they intend to occupy the home. A dependent child of an active-duty Service member also satisfies the occupancy requirement.
When refinancing a VA-guaranteed loan solely to reduce the interest rate, a Veteran only needs to certify prior occupancy.
Financing, Interest Rates and Terms
Veterans obtain VA-guaranteed loans through external lending institutions, including banks, credit unions, and mortgage brokers.
Loan Types Available
- Fixed Interest Rate: Interest rate remains the same throughout the life of the loan
- Adjustable Rate (ARM): Interest rate may adjust up to 1% annually and up to 5% over the life of the loan
- Hybrid ARM: Initial interest rate remains fixed for 3-10 years, then adjusts
VA does not set the interest rate. Interest rates and loan terms are negotiable between the lender and borrower on all loan types. The term of the loan may be for as long as 30 years and 32 days.
Assumption Requirements and Liability
VA loans made on or after March 1, 1988, are not assumable without the prior approval of VA, the holder, or its authorized agent (usually the servicer collecting the monthly payments).
Assumption Approval Process
To approve the assumption, the holder or servicer must ensure that:
- The purchaser is a satisfactory credit risk
- The purchaser will assume all of the Veteran's liability to the loan
- The purchaser will pay a funding fee (unless exempt)
- The Veteran will be released from liability to the federal government
⚠ Important Notes on Assumptions
- A VA-guaranteed loan may be assumed by anyone, including non-Veterans
- Loans made prior to March 1, 1988, are generally freely assumable, but Veterans should still request the lender's approval to be released of liability
- A release of liability does not mean that a Veteran's guaranty entitlement is restored
- If the Veteran allows assumptions without prior approval, the lender may demand immediate and full payment of the loan
- The VA Home Loan Guaranty program helps eligible Veterans, Service members, and surviving spouses obtain homes with no down payment required and no private mortgage insurance (PMI).
- VA loans can be used to buy, build, repair, refinance, or improve a home, as well as install energy-efficient improvements.
- Apply electronically through www.va.gov or through your lender for instant approval in most cases.
- Surviving spouses may be eligible under specific conditions, including MIA/POW status or service-connected death of the Veteran.
- VA does not make loans directly; VA guarantees loans made by private lenders, which enables favorable terms.
- Veterans with service-connected disabilities and Purple Heart recipients are exempt from the VA funding fee.
- A VA appraisal is required but is not an inspection—VA strongly recommends a thorough property inspection and radon testing.
- VA loans made after March 1, 1988, require prior approval for assumption, and a release of liability does not automatically restore entitlement.
- Interest rates and loan terms are negotiable with lenders—VA does not set interest rates.
- For more information, visit www.benefits.va.gov/homeloans or call 877-827-3702.
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