The VA home loan program under 38 USC Chapter 37 is one of the strongest homebuying benefits in the U.S. — zero down payment, no private mortgage insurance, and competitive interest rates (usually 0.25-0.50% below conventional). Veterans receiving VA disability compensation get a complete funding-fee exemption worth ~$8,600 on a $400k home. Eligibility verified by Certificate of Eligibility (COE).
Eligibility runs under 38 CFR § 36.4301 and depends on service history:
Wartime service: 90 consecutive days of active duty during a wartime period.
Peacetime service: 181 continuous days of active duty during peacetime.
National Guard / Reserves: 6 years in the Selected Reserve or National Guard, or 90 days of active duty under Title 10 orders.
Current active duty: 90 continuous days served.
Surviving spouses: un-remarried spouses of veterans who died from service-connected disabilities, or spouses of MIA/POW service members.
Before using a VA loan, you need a COE proving to the lender that you qualify.
A one-time charge that sustains the VA loan program. Can be paid upfront at closing or rolled into the loan. Amount depends on service type, down payment, and whether you have used a VA loan before.
Completely exempt if any of the following apply:
You receive VA disability compensation.
You are rated as eligible to receive VA disability compensation but receive retirement or active-duty pay instead.
You are a surviving spouse receiving DIC.
You are a service member with a proposed or memorandum rating prior to discharge.
You are a Purple Heart recipient currently serving on active duty.
1. Get pre-approved. Work with a VA-approved lender to review finances and get a pre-approval letter.
2. Find a home. Work with a real estate agent (ideally one experienced with VA loans).
3. Make an offer. Submit with the pre-approval letter. VA loans let sellers pay up to 4% of the loan amount in seller concessions toward closing costs.
4. VA appraisal. The VA orders an independent appraisal to confirm the home meets Minimum Property Requirements (MPRs) and is worth the purchase price.
5. Underwriting. Lender reviews all documentation and issues final approval.
6. Closing. Sign documents and receive keys. The VA guaranty covers ~25% of the loan — which is why zero-down financing is possible.
You can use a VA loan more than once. Not a one-time benefit. Reusable; you can even have two VA loans simultaneously in some situations with remaining entitlement.
VA loans are not just for first-time buyers. No first-time-buyer requirement.
Sellers cannot legally refuse a VA offer solely because of VA financing. Some sellers historically resisted due to longer appraisal timelines; the VA has accelerated appraisals significantly, and refusal solely on financing source can raise fair-housing concerns.
Under 38 CFR § 36.4301: 90 consecutive days of active duty during wartime; 181 days during peacetime; 6 years in the Selected Reserve or National Guard or 90 days under Title 10; 90 continuous days for current active-duty service members; un-remarried surviving spouses of veterans who died from service-connected disability, or spouses of MIA/POW service members.
Yes — completely exempt. The funding fee is also waived if you are rated as eligible to receive VA disability compensation but receive retirement or active-duty pay instead, if you are a surviving spouse receiving DIC, if you are a service member with a proposed or memorandum rating prior to discharge, or if you are a Purple Heart recipient currently serving on active duty. On a $400k home, the exemption saves ~$8,600 on first use.
Three methods: (1) Online via VA.gov / eBenefits — usually instant. (2) Through your lender via the VA's Web LGY system. (3) By mail via VA Form 26-1880 plus DD-214 — 4-6 weeks.
No down payment is required (for veterans with full entitlement, there is no VA-imposed loan limit). The VA funding fee is 2.15% of the loan amount for first-time use with no down payment, lower with down payment, higher for subsequent use. Closing costs apply but sellers can pay up to 4% in concessions.
Yes. The VA loan entitlement is reusable. You can even hold two VA loans simultaneously in some situations if you have remaining entitlement (e.g., when relocating for service before the prior home sells).
The VA guaranty covers roughly 25% of the loan, which reduces lender risk. The lower risk profile gets passed to the borrower as a lower rate — typically 0.25% to 0.50% below conventional 30-year fixed rates.