VA home loans: who qualifies and what do they cost?

Who qualifies for a VA home loan?

VA-backed loans come from private lenders, but the Department of Veterans Affairs guarantees part of each loan. To use one, you must meet VA's service requirements, plus the credit, income and occupancy standards set by VA and your lender.

VA's minimum service rules include:

• Active-duty service members: at least 90 continuous days of active duty.
• Veterans who served on or after August 2, 1990: 24 continuous months, or the full period you were called to active duty (at least 90 days). Shorter service can qualify if you were discharged for a service-connected disability or certain other reasons.
• National Guard and Reserve members: 6 creditable years, or 90 days of non-training active-duty service. Guard members can also qualify with 90 days of active duty that includes 30 consecutive days under certain orders.
• Surviving spouses: may qualify if eligible for or receiving certain Dependency and Indemnity Compensation, or if the spouse is missing in action or a prisoner of war.

Earlier service eras have different day counts, so check VA's eligibility page if you served before 1990. Discharge type matters too. If your discharge was other than honorable, VA can review your records.

How do you get a Certificate of Eligibility?

The Certificate of Eligibility (COE) shows the lender you meet VA's service rules. You can request it three ways:

• Online through VA.gov.
• Through your lender, which can often pull it using VA's Web LGY system.
• By mail with VA Form 26-1880, which may take longer.

Veterans usually need their DD214. Active-duty members need a signed statement of service from their command. Guard and Reserve members and surviving spouses have their own document lists on VA's site.

A COE is not a loan approval. Your lender still reviews your credit, income and the VA appraisal before you can close.

Do you really need no down payment?

VA says there is no down payment if the sales price is not higher than the appraised value. How much you can borrow with nothing down depends on your entitlement, the amount VA will guarantee.

• Full entitlement: VA says you have no loan limit. Your lender still decides how much to lend based on your credit, income, debts and assets. The maximum loan is the lower of the appraised value or the purchase price.
• Remaining entitlement: if you have a VA loan already, your county's conforming loan limit sets how much you can borrow with no money down. Most lenders want your entitlement, down payment, or both to cover at least 25% of the loan.

A down payment may be optional with full entitlement and sufficient appraised value. Funding-fee reductions begin at 5% down and increase at 10%, as the table below shows.

Is there PMI on a VA loan?

No. VA loans do not require private mortgage insurance or monthly mortgage insurance premiums, even with zero down. VA charges a one-time funding fee instead.

VA also notes there is no prepayment penalty, and that sellers may sometimes pay some closing costs. You will still pay normal closing costs such as the appraisal, title and lender fees unless the seller or a lender credit covers them.

How much is the VA funding fee?

The funding fee is a percentage of the loan amount. You can pay it at closing or finance it into the loan. These rates have been in effect since April 7, 2023, and VA's page confirmed them as of October 2026.

Other VA loans: cash-out refinance is 2.15% for first use and 3.3% after; an Interest Rate Reduction Refinance Loan (IRRRL) is 0.5%; a loan assumption is 0.5%.

You do not pay the funding fee if you:

• Receive VA compensation for a service-connected disability.
• Are eligible for that compensation but receive retirement or active-duty pay instead.
• Are a surviving spouse receiving Dependency and Indemnity Compensation.
• Are a service member with a proposed or memorandum rating, issued before closing, showing eligibility for compensation from a pre-discharge claim.
• Are an active-duty service member who shows evidence of a Purple Heart on or before closing.

What is residual income on a VA loan?

VA underwriting looks at two numbers. The first is your debt-to-income ratio. VA's regulation sets a standard of 41% or less, though a higher ratio can be approved with compensating factors.

The second is residual income: the money left each month after your housing payment, taxes, insurance and other debts. VA compares it with a guideline amount that varies by region, family size and loan amount. The goal is to make sure you have enough left for food, transportation and other living costs.

If your debt ratio is above 41% but your residual income beats the guideline by at least 20%, VA's rule drops the extra justification step. Lenders apply these tables, and some add their own requirements.

Can you use a VA loan more than once?

Yes. The VA home loan benefit is not a one-time benefit. The funding fee table itself has a separate column for loans after your first use.

If you still have an active VA loan, you may have remaining entitlement for another purchase, subject to the county limit math above. If a past VA loan ended in foreclosure, short sale or deed in lieu, VA says you need to repay VA's loss to restore that part of your benefit. Ask a lender or VA's Regional Loan Center to review your COE before you shop.