A VA loan is a mortgage that is insured or backed by the Department of Veterans Affairs and made available to eligible servicemembers, veterans, or their surviving spouses.

Created by the G.I. Bill of 1944, VA loan programs offer lower down payment options, more lenient credit qualifying guidelines, and often interest rates that are better than most other loan programs.

While the VA does not have a specific credit score requirement, they do require that we take your entire financial picture into consideration, including your debt-to-income ratio and residual income calculation.

In addition to the income, asset, and credit qualifying criteria for a VA loan, U.S. military servicemembers must also meet one of following requirements:

• 181 days of active-duty service during peacetime.
• 90 consecutive days of active-duty service during wartime.
• 6+ years of service in the National Guard or Reserves.
• Or if you are the surviving spouse of a servicemember who lost their life in the line of duty or as the result of a service-related disability.

We will help you to request your Certificate of Eligibility (which can be obtained directly from the VA e-benefits site as well) and let you know your current eligibility and entitlement amount.

VA vs. Conventional

VA Loans, which are backed by the Department of Veterans Affairs, typically require a Funding Fee of between 1.4% and 3.6% with exceptions for those receiving VA disability benefits, surviving spouses, and active-duty Purple Heart recipients. VA loans also feature a 100% financing option for both purchases and refinances of primary homes without requiring mortgage insurance. 

Conventional loans require Private Mortgage Insurance (PMI) if your down payment is less than 20%, but they do provide financing for second homes and investment properties not available with VA loans. Learn more about Conventional Loans here.

VA vs. FHA

While FHA loans are available to anyone who meets the qualifying criteria, VA Loans are reserved for active-duty military personnel, veterans, and their surviving spouses. 

FHA loans require a minimum down payment of 3.5% and carry both an up-front fee and monthly Mortgage Insurance Premium (MIP). VA loans can only be used to purchase a new primary home or refinance a current primary home and allow for 100% financing - meaning no down payment or existing home equity is required and there are no Mortgage Insurance Premiums to pay. Learn more about FHA Loans here.

VA vs. USDA

VA loans are available on any VA approved property across the country. USDA Rural Development loans are specifically for use in qualifying rural areas and have household income limits based on the area. 

USDA loans allow for up to 100% financing without requiring Private Mortgage Insurance (PMI) but do require a 1% guarantee fee which can be paid upfront or set up on a monthly basis.

VA loans allow you to purchase single-family existing homes as well as new construction, including condominiums and townhouses in VA approved complexes.

While VA loans can be used to purchase mobile, manufactured, or modular homes as well, they must meet current safety and habitability guidelines.

You can also use a VA loan to purchase a multi-family property (up to 4-units) as long as you occupy one of the units as your primary home.

The VA Funding Fee is a percentage of your loan amount, paid directly to the VA and used to offset the costs of the program to taxpayers. How much this will cost you depends on the type of loan, if you are a first-time or subsequent VA loan borrower, and for purchase loans - how much of a down payment you are planning on making. 

While most veterans must pay the Funding Fee for using their VA loan benefit, there are certain cases where you may be exempt from paying this fee.